ITEXPO begins in:   New Coverage :  Asterisk  |  Fax Software  |  SIP Phones  |  Small Cells

Feature Article
February 2005

Deploying IP PBXs With An ITSP

BY Brandon Weilbacher, Director of Product Management, Epygi Technologies

With Internet Telephony Service Providers (ITSPs) spending large sums of money on advertising and growing at exponential rates, they are quickly becoming household names. Businesses are also continuing to replace analog and digital PBXs with IP PBXs due to their increased functionality. The deployment of an IP PBX in combination with an ITSP is a natural combination that offers numerous benefits to businesses, ultimately increasing their efficiency and lowering costs.

The demand for IP PBXs and the services provided by ITSPs will continue to increase due to the need of businesses to minimize long-distance and operating costs, and provide their employees with communications tools to make them more productive in and out of the office. The combination of an IP PBX with an ITSP is a formula that businesses are learning helps them to achieve these goals.

Lowering Costs
The key benefit businesses will realize with an IP PBX and service from an ITSP is the reduction in costs paid to their traditional telephone carrier. Before the advent of IP PBXs, all long distance calls would be sent to a traditional carrier over dedicated circuits and through large and expensive central office switches. The number of lines a small business required was proportional to the number of employees. In addition, the cost of moves, adds, and changes on the local PBX was substantial.

Today an IP PBX gives businesses the option of managing their own system through graphical user interfaces with PC-like wizards. The same intuition used to install and operate office software on a PC can be used by common business people to manage their own moves, adds, and changes on the local IP PBX.

Traditional long-distance (LD) carriers are becoming obsolete. IP PBXs can make calls to other compatible IP PBXs and VoIP telephones free of charge. For LD calls back to the traditional PSTN, an ITSP can deliver the call at a fraction of the cost of a traditional LD carrier. The effective per-minute rates offered by ITSPs are much lower than traditional carriers.

Although they may still provide the Internet service, the traditional telephone carrier is starting to lose out on the voice lines into the business location. The number of business lines to each location can be dramatically reduced due to the ITSP’s unique ability to deliver multiple virtual lines over a single broadband pipe. In many cases, the ITSP will not limit the number of simultaneous calls allowed on a single account, effectively offering the business as many lines as they have bandwidth to handle. This, combined with burstable Internet service, completely changes the way business plan for their telecom requirements. No longer will a business need to order lines based on the number of employees, but instead will just need to ensure their broadband connection has sufficient overhead to handle peak calling periods. It is still common to have a limited number of FXO business lines connected to the local exchange carrier to provide lifeline services and to serve as an emergency backup.

How It Works
The IP PBX provides many features to end users locally ensuring local communications and feature availability no matter what is taking place in the WAN. Some of the features offered locally include voicemail, auto attendant, conferencing, forwarding, company-wide dialing plans, and advanced features such as call relay, only available on IP PBXs.

SIP Call relay is an example of a feature not available on traditional PBXs. It allows a call to originate on one network and through the use of two-stage dialing, terminate on a different type of network. For example, a traveling businessperson could call into a local IP PBX by making a local PSTN call from a cell phone and then relay onto the VoIP network to call anywhere in the world in a more cost-effective manner. In this case, the businessperson has then completed a VoIP call from their cell phone.

The IP PBX or legacy PBX equipped with an external VoIP gateway can register itself with the ITSP. In most cases a local DID PSTN number will be provided by the ITSP for incoming calls. Often this number can be an existing number ported over to the ITSP. In addition to providing multiple virtual lines for incoming calls, routing rules can be established on the IP PBX to send all outbound LD calls to the ITSP. Local outbound calls and emergency (911) calls can be sent over the LEC provided lines.

When calls come into the assigned DID number, the ITSP serves as the gateway from the PSTN and terminates the call as VoIP to the IP PBX, where the call can then be routed to a specific phone or an auto attendant. As long as the bandwidth is available, many simultaneous calls can come from the ITSP over a single broadband connection. This effectively provides multiple lines and minimizes the requirements for physical lines from the LEC.

For outgoing calls from the IP PBX there are many possible paths that can be configured depending on cost and reliability requirements. Calls can travel directly to a peer IP PBX without using the ITSP, they can traverse the ITSP network, or they can be delivered over the PSTN. It is generally recommended that all outbound LD traffic be sent by default to the ITSP and fall back to the PSTN in case of a network failure. Local calls and emergency calls should be sent out to the PSTN over the dedicated lines. These lines still provide network power and should serve as lifelines in the case of local power failures. Some IP PBXs are able to deliver the network power through the IP PBX to a limited number of phones at the customer premise.

Key Benefits
Less Expensive: Although LD costs have fallen over the years, they still represent a significant expense for businesses. By installing IP PBX systems, substantial savings will be realized. Not only will companies benefit from lower LD costs, but dependence on the LEC for costly lines will also be reduced. In addition, a business’ operation costs can be reduced substantially with an IP PBX. The initial cost of a traditional telephone system accounts for only about half of the cost of ownership. The other half is moves, adds, and changes, which become much simpler with an IP PBX. With traditional telephone systems, moves required a technician on site that may charge for three to five hours of labor to physically change ports in the wiring closet and/or reconfigure the extension on the PBX.

With an IP PBX, these moves are as simple as moving a computer. The phone can be unplugged by the user and plugged in at the new location without any changes on the PBX or wiring closet eliminating the cost of the technician.

Expansions will also be less costly. Most IP PBXs are designed with simple-to-use GUIs instead of the proprietary interfaces available on many traditional PBXs. With minimal training, the phone system can easily be managed by the same person managing the data network. In addition, expansions no longer require expensive and proprietary PBX line cards. Low-cost data switches, already in place for the data network, are used as the physical interface between the phone and the IP PBX switching matrix.

Virtual Local Numbers: An ITSP can establish local DID numbers in multiple markets that all terminate as VoIP to a centralized IP PBX. Of course these DID numbers can terminate as VoIP to IP PBXs at branch offices locations consistent with the area code, but they do not have to. A business can now create a virtual local presence in multiple markets and countries with local numbers that terminate to an IP PBX that may be on the other side of the world.

Free On-net Calls: Many ITSPs do not charge for calls that do not leave the ITSP’s network. For example, a business may register their IP PBXs at each of their sites with the ITSP. Since all the IP PBXs are on-net, intra-company calls are free. This can be a significant cost reduction.

Productivity Gains: One important benefit may not quantifiable. IP PBX systems offer many new features that increase the efficiency and productivity of every employee on the system. One important benefit is the dissolution of distance now possible with these modern communications systems. Whether an employee is in the office, in a car with a cell phone, or using a soft phone client on a laptop in a hotel room, features are available to simultaneously ring these non-traditional extensions, or hunt different locations to find the person. If an employee does not want to be found, they can set preferences to send calls to voicemail and send voicemails and faxes to their e-mail inbox. All this can be managed with simple GUI interfaces even the most novice computer user can manipulate. Other users can utilize features such as call relay to make international calls from wherever they are instead of waiting until they get back to the office. Communications are key to successful businesses and IP PBXs are making communications more efficient.

Both the IP PBX and the ITSP are hot trends in the Internet telephony market. Putting them together makes logical and financial sense for businesses. As this trend continues, more and more IP PBX manufacturers and ITSPs will be announcing partnerships and interoperability.

Brandon Weilbacher is the Director of Product Management at Epygi Technologies. For more information, please visit the company online at

[ Return To The February 2005 Of Contents ]

Today @ TMC
Upcoming Events
ITEXPO West 2012
October 2- 5, 2012
The Austin Convention Center
Austin, Texas
The World's Premier Managed Services and Cloud Computing Event
Click for Dates and Locations
Mobility Tech Conference & Expo
October 3- 5, 2012
The Austin Convention Center
Austin, Texas
Cloud Communications Summit
October 3- 5, 2012
The Austin Convention Center
Austin, Texas