A traditional voice telephony service provider typically offers one or more T1/E1 trunks to the enterprise for fulfilling its needs for voice communication outside its own premises. The service provider is then connected to what is sometimes referred to as the world’s biggest machine: the worldwide PSTN, or public switched telephone network. Connectivity between the networks of the different service providers that constitute this machine is achieved by bilateral interconnect agreements between the various service providers. There are also wholesale service providers that aggregate the traffic from several local service providers and make the interconnect agreements for all of them collectively.
The SIP trunk offering is just another way of connecting the enterprise subscriber to the network. The interconnect and wholesale aspects remain the same. In a SIP trunk the traditional T1/E1 interface (trunk) is replaced by an Internet connection with the SIP protocol used for signaling. Nowadays, most enterprises already have such a connection to be used for their data traffic. As a SIP trunk is IP-based and virtual, it is much easier to manage remotely and therefore cheaper for the service provider to maintain than the traditional connections. It also typically does not require the service provider to deliver and take responsibility for any additional customer premises-based equipment. That, too, adds to the simplicity and cost-effectiveness of SIP trunks as a means of delivering voice communications.
Different types of SIP trunking service providers
Long gone are the days when there was only one carrier available to offer telephony services. Among the newer entrants to the voice market offering SIP trunking and other VoIP services are both facilities-based and facilities-less providers. Generally there are only a few major companies that have their own network infrastructure while others are reselling traffic that will travel on another party’s (be it a new IP wholesaler or an incumbent) network.
A SIP trunking service provider aggregates the traffic from many enterprise customers. The traffic passed to the PSTN is of much larger volume than the traffic from any individual enterprise. This means that the SIP trunking service provider can acquire the call minutes from the PSTN service providers at a lower rate than the individual enterprise. The network charge for the IP part of the call is typically not traffic-dependent so there are significant gains to be made here.
The use of the IP networks for part of the route of the call means that a service provider with several points of presence around the world, or that has agreements with other service providers to exchange traffic, can allow the call to stay on the IP network for as long as possible. The call is transferred to the PSTN at the point of presence closest to the destination of the call. This process, sometimes referred to as local breakout, allows the service provider to make maximum use of local PSTN call rates rather than paying international or long-distance charges. This contributes to making SIP trunking a very cost-effective solution for the enterprise as well as for the SIP trunking service provider.
Edited by Maurice Nagle