Reduce Telecommunications Cost with SIP Trunks

Scott Lowe is considering a switch to SIP trunks to replace his organization's T1 circuit. Saving money is a considerable benefit, but what are the drawbacks?

Between T1 costs, a "billing charge" and local and long distance usage, Westminster College spends quite a bit of money on communications costs each month. The billing charge is a several-hundred-dollars charge that we incur for the privilege of receiving an itemized statement at the end of each month. We're a relatively small place, so we have just a single T1, which is dedicated for outgoing calls. For incoming calls, we have a pair of PRI circuits in place and, because of rather strict contract termination terms, will stay in place for the next couple of years. Our outgoing T1, however, is up for grabs.

In order to reduce costs, we're considering the use of SIP trunks to replace our T1 circuit. The company we're considering sells an "unlimited" SIP trunk for $30 per month. This price includes all local and long distance calling. The only charges incurred are for international and incoming toll free calls. Now, you might notice that the T1 I mentioned handles just our outgoing traffic and you might be wondering how our incoming 800 calls fit. Our 800 calls are currently handled on our incoming PRI circuits, but these toll free lines would be moved to the new SIP service.

Moving to SIP trunks will eliminate 95% of our usage charges, but does introduce some questions. First off, T1 circuits have proven their resilience over decades of use. As a point-to-point circuit, quality of service on a T1 circuit can be guaranteed. With SIP trunks, there two connectivity options, only one of which can be guaranteed by a SIP provider. First, a SIP provider can install a secondary Internet connection into a facility which they control exclusively. As a result, quality and uptime can be better guaranteed. More commonly, however, and at much less cost, SIP trunks can be brought in over an organization's existing connection to the Internet. Although this is less expensive, SIP providers won't guarantee the availability of your third party connection and network congestion may become an issue.

On the upside, I've already mentioned that a SIP trunk over an existing connection can save money. But also consider this: When your SIP trunks aren't in use, the bandwidth is still available for other uses. When compared to an existing T1 or PRI line, which sits unused when no calls are in progress, it's a bit more efficient.

A SIP trunk can be connected to any IP-PBX that supports them. We're currently exploring the Avaya IP Office PBX, which supports external SIP trunks. Moreover, if you're using T1 or PRI circuits, you have to add them 23 at a time. SIP trunks can be added one at a time so it's easier to buy just what you need.

Another downside to SIP trunks lies in standards. Although there are dozens upon dozens of SIP vendors popping up all over the map, not every SIP vendor is supported by every IP-PBX manufacturer. Instead, providers and manufacturers are going through a certification process to help ease interoperability. Further, some legacy telephony services require special consideration when making the translation to the IP world. In particular, if you decide to go down the SIP road, make sure that fax and DTMF are well supported by your SIP vendor.

Also bear in mind quality issues, particularly if you're using your own Internet connection. As long as you have sufficient bandwidth and your Internet provider has a reasonable peering arrangement, quality shouldn't be a huge problem. However, since SIP rides on IP, you are more susceptible to echoing or dropped calls than you would be with traditional circuits.

As I mentioned there are a ton of vendors in the marketplace now. We're looking at's unlimited trunks. and the Avaya IP Office PBX are not yet certified for interoperability, but provides a gateway device that enables this capability.

Have you gone or are you considering going the SIP route? Share your experiences in the comments section. I look forward to learning more about this technology as I take the plunge at Westminster College.


Since 1994, Scott Lowe has been providing technology solutions to a variety of organizations. After spending 10 years in multiple CIO roles, Scott is now an independent consultant, blogger, author, owner of The 1610 Group, and a Senior IT Executive w...

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