White Paper

Using SIP Trunking with Your Companys

Phone System Can Save You a Bundle and
Improve Your Customer Service
What Is Session Initiation Protocol or SIP?
Session Initiation Protocol (SIP) is a communications protocol used for communicating between different
devices on a company network, whether on the LAN, the WAN, or across the Internet. An example of this
could be a simple two-way phone conversation, using voice over IP (VoIP) on the LAN or WAN or a SIP
trunk across the Internet to a service provider. A SIP trunk provides a new way of connecting to a service
provider for incoming and outgoing calls; it is a connection over the Internet instead of a traditional
telephone connection such as ISDN.
SIP allows you to take full advantage of applications such as video conferencing, presence, and instant
messaging. These applications, and others like them, when working together are known as unified
communications. Unified communications opens up a new world of possibilities in how you interact with
your customers and prospects, giving them a richer experience when dealing with you and your staff.
SIP provides businesses many benefits over older, proprietary telephony solutions, and best of all, it can
save you money. It offers businesses (1) the flexibility to choose from many different optional services and
applications that can be added into their unified communications solution at little cost and (2) in most
cases, significant monthly cost savings.
In the past, connections to the service provider (telephone company) were possible only using a dedicated
telephone line, such as an ISDN connection. This placed physical limitations on the number of incoming and
outgoing calls and required dedicated hardware connections on the phone system (Figure 1).
Figure 1.

ISDN Connection to a Service Provider

With SIP trunking, these dedicated interfaces are no longer necessary; instead, the connection is through
your broadband or Internet connection, which can carry many more calls, meaning that your service can
adjust up and down as needed without the need for additional physical lines (Figure 2).

2011 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public Information.

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Figure 2.

SIP Connection to a SIP Service Provider

Benefits of SIP Trunking

Reduced costs: A single connection is used for both your voice traffic and your data. SIP trunks also
eliminate the need for local public switched telephone network (PSTN) gateways and costly ISDN BRIs
(Basic Rate Interfaces) or PRIs (Primary Rate Interfaces). Costs can be reduced by 40 percent or more
in many cases.

Efficiency: A single connection dynamically allocates bandwidth between voice and data as needed.

Growth: Its easy to increase your call capacity with additional SIP trunks, as they are provisioned
quickly through the Internet, usually in minutes, using your existing broadband connection. Adding an
extra line to a traditional phone system may require the purchase of additional costly hardware and
another physical connection from the service provider, both of which will incur a service call.

Better customer service: Deliver better customer service and enhance productivity with a phone
system that is integrated with business applications and rich multimedia services such as video, instant
messaging, presence, and mobility services.

Simplicity: Manage a single network connection with SIP trunking and get one bill from a single
provider for local and long distance, as well as broadband Internet needs.

Geographic independence: Your business area code can appear to be local, but your office can be
physically located in another area of the country when using SIP trunking.

Choice of service providers: With SIP trunking, many providers can potentially service any area
because the connection is virtual (through the Internet) rather than physical, enabling alternative
service providers and competitively priced options. You are no longer tied to one local service supplier.

Moving to SIP trunking will almost always save your business money. Tables 1 and 2 demonstrate two
examples of the possible cost savings that could result with a SIP trunk connection.
Table 1.

U.S. Example of Savings with SIP Trunking

Traditional Phone Lines and Broadband Internet Service

SIP Trunking and Broadband Internet Service

3 lines for service with 1000 minutes local

and domestic long distance

SIP service with 3 concurrent call sessions and

1000 minutes local and domestic long distance

$135

250 minutes international long distance

$36

250 minutes international long distance

High-speed Internet

$90

High-speed Internet

Monthly charges

$261

Annual costs

$3,131

2011 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public Information.

$57
$8
$90

Monthly charges

$155

Annual costs

$1,860

Annual cost savings with SIP trunking

$1,272

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Table 2.

U.K. Example of Savings with SIP Trunking

Traditional Phone Lines and Broadband Internet Service

SIP Trunking and Broadband Internet Service

Recurring ISDN charges

16 SIP trunk channels

272

Traffic

2,380

144

Traffic (local, long distance, international)

1,694

Monthly charges

2,652

Monthly charges

1,738

Annual costs

$31,824

Annual costs

20,856

Annual cost savings with SIP trunking

10,968

Cisco Small Business Unified Communications solutions help businesses reduce expenses, and with
support for SIP trunking, enhances both productivity and the customer experience.
Contact your local reseller today and ask about Cisco Small Business Unified Communications or visit:
www.cisco.com/go/smb.

Printed in USA

2011 Cisco and/or its affiliates. All rights reserved. This document is Cisco Public Information.

C11-688300-00

10/11

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