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Enterprises are migrating from TDM to SIP trunks for PSTN/ISDN access. I&O leaders
responsible for networking should use this research to support their gathering of
requirements and evaluate them against vendors in the market, balancing agility, resilience and
price.
Overview
Key Findings
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■ The SIP trunking market competitive landscape is composed of several provider types:
communications service providers (CSPs), unified communications as a service (UCaaS),
communications platform as a service (cPaaS) and pure-play Session Initiation Protocol (SIP)
service providers.
■ Historically, the main driver for migrating to SIP has been cost savings vis-à-vis time division
multiplexing (TDM). But as providers in some countries begin to turn off their TDM networks,
this also compels enterprises to transition to SIP trunks. Other aspects include centralization
initiatives and higher availability requirements (such as alternative routing on failures) from
being Internet Protocol (IP)-based. The increased phasing out of TDM, or the impending
unavailability of TDM, has an impact.
■ SIP trunking services are rapidly evolving, and there are notable differences between providers’
services, including features, deployment options, pricing models, geographic coverage and
service-level agreements.
Recommendations
■ Ensure a SIP environment that’s fit for purpose by taking inventory of critical used features on
existing TDM trunks, and confirm that SIP offers have these features. Be mindful that the
competitive landscape is wider than that of TDM voice services. Run a competitive tender and
invite different types of providers.
■ Guarantee availability where it is a critical priority by using a network service provider that can
deliver a highly resilient access data network service along with the SIP trunking service, which
can be provided with an E2E SLA.
■ Achieve lower costs by prepurchasing of minutes of use (60% to 70% of expected monthly
consumption), and do not accept installation/deployment charges exceeding 5% of the three-
year total cost of ownership (TCO).
■ Ensure a robust service delivery by using a managed enterprise session border controller (eSBC)
from the provider instead of operating an SBC in-house when in-house voice over IP (VoIP)
expertise is scarce.
■ Avoid cost surprises for U.S. deployments by obtaining a good-faith estimate of expected taxes
before signing an agreement, since IP communications may be taxed differently than TDM.
By 2022, all network service providers in North America and Western Europe will announce the end
of support of ISDN PRI service.
Market Definition
SIP trunks are IP-based trunks for voice-band calls to/from the public switched telephone network
(PSTN), and, potentially, video calls to and from the enterprise. They typically replace analog phone
lines and/or ISDN voice lines.
Market Description
This market has evolved from basic voice functionality to feature-rich voice offerings with several
options to ensure services are optimized — to the user base size, the distribution of users, the
required level of redundancy or consumption pattern. The service is composed of three main
components:
■ A PBX (an IP-PBX, PBX with a SIP trunk-enabled interface or, if a legacy PBX is used, gateways
to connect to SIP trunks)
■ “Traditional” CSPs that may also provide access network services and bundle service elements
■ UCaaS providers
■ cPaaS
There are several attributes of SIP trunking services, as shown in Figure 1, and these are frequently
applied in service provider evaluations and addressed in more detail in the Market Analysis section.
Market Direction
Enterprises are moving to SIP trunking for several specific and strong reasons — one is that TDM
services are being decommissioned in many places around the world. The exact timetables are not
fully known, but most providers in North America and Europe have already put a stop-sell on TDM
services. By 2025, there will likely only be very few providers left in Europe still supporting the
service. With end-of-sale milestones a few years before them, enterprises must strategize around
the future requirement for fixed voice services.
Another driver toward moving to SIP trunking is the potential for cost reductions that SIP trunking
services offer. The basic chargeable elements associated with trunking of any kind (digital, analog
or SIP) include:
■ Facility charges
A third reason is greater flexibility. SIP trunking offers the ability to purchase a service that is a
better fit for organizations with changing requirements (for example, temporary increases in call
volumes). A fourth is the added resiliency of SIP trunking, which reduces the risk of a complete
outage at any one site.
On a global basis, a 15% to 30% cost reduction (on a like-for-like comparison with TDM) is
achievable. In terms of maturity, the vast majority (more than 80%) of enterprises in North America
have some SIP trunking in their production environments, yet only a minority have fully completed
their migration to SIP trunking. European deployments are well underway, although less than 20%
are fully completed deployments. In other regions, the numbers are smaller.
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As enterprise PSTN connectivity has been steadily shifting from digital and analog trunking to SIP,
VoIP has simultaneously enabled a shift in the architecture of enterprise voice solutions, resulting
in a migration from traditional site-based PBXs to centralized voice solutions delivered from a
corporate data center. However, achieving the optimal balance between cost and performance
requires planning and selecting the trunk architecture that best meets environmental factors and
objectives. The choice and their respective use cases are outlined in Table 1.
■ Improves
voice
flexibility, with
phone
numbers no
longer rigidly
linked to
locations
■ Does not
require new
traffic
engineering
Although not all enterprises can realize a centralized trunk design because of constraints such as
existing infrastructure, regulation, lack of service availability and so on, the deepest savings are
There are many providers of SIP trunking services. At a domestic level, incumbents and challengers
in North America, Europe and mature Asia/Pacific have offered SIP for several years already. Many
global providers offer services across multiple countries, with the largest footprints with DID or TF
in around 100 countries and with local calling in 35 to 40 countries. However, there are differences
between Tier 1 countries — in which full PSTN replacement is offered, including emergency
services — and lower tiered countries where the services are more limited and may therefore not be
suitable to replace TDM voice. The geographic coverage varies substantially by provider. Many of
the more mature markets also have several pure-play providers that compete aggressively on price.
Consequently, the competitive landscape is significantly wider than that of the legacy voice
services, and an unexpected provider may in fact be the most appropriate. For a list of
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representative providers from all four segments, see the Representative Vendors section further in
this research.
Market Analysis
Among the attributes shown in Figure 1, there are seven that are more critical to operational
performance and that enterprises should use when evaluating SIP trunking offers:
■ Geographical coverage
■ Service-level agreements
These attributes and their associated Gartner recommendations are detailed in the sections that
follow.
■ Media-focused features, such as supported codec (e.g., G.711, G.722, G.729), media flow-
around and T.38 fax relay.
■ Business continuity features, such as alternate call routing and overflow for incoming calls.
Recommendation: Since offers vary, state functionality as specifically as possible (such as if you
need a particular length of account code),
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SIP trunking service providers will often offer customers fraud prevention, detection and protection
for outbound calls. Detection generally involves technology that can detect anomalies in outgoing
calls, such as the volume of calls, or their duration or their destination. Some detection features
notify the provider or the customer when they detect fraud. Prevention is the act of blocking
outbound calls that are believed to be fraudulent. Finally, fraud protection is a plan that providers
offer customers to limit the liability (that is, the usage charges due to the provider) if undetected
fraudulent calls are made. In the U.S., total liability limits between $2,500 and $20,000 are typically
observed.
Recommendation: Confirm with providers that they offer fraud detection, fraud prevention and
fraud protection. Also confirm what the liability cap/limit is for fraudulent calls that incur charges.
SIP trunking services implement another category of security features at the edge of their network.
This category includes topology hiding, port pin holing, rate limiting, distributed denial of service
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(DDoS) protection, and malformed packet protection. These features are almost always
implemented in the provider’s access SBC, and they protect the provider’s internal network. The
SBC terminates the SIP trunks coming from the various enterprises that the provider hosts.
Similarly, organizations using SIP trunking will almost always use an enterprise SBC at the edge of
their network to provide the same security features and to terminate the SIP trunks from the
provider.
Recommendation: All enterprises should employ an eSBC. If voice services are critical, seek an
SBC with robust redundancy features (for example, redundant power supplies, redundant Ethernet
connectivity and redundant storage), or use a pair of SBCs to achieve higher availability.
Geographical Coverage
SIP trunking is being adopted by enterprises in developing regions around the globe, and there are
now SIP trunking services available in most countries; however, there are still no providers that can
offer a complete global service coverage. This is in part due to global providers’ rollouts of full
PSTN replacement capabilities, but also due to regulatory restrictions in several countries, which
prevents foreign operators from delivering full telephony. While a provider may be allowed to
deploy and manage an on-site IP PBX and manage voice over the enterprise WAN, the provider may
not be allowed to interconnect with the domestic PSTN and deliver national call routing.
To deliver a global SIP trunking solution, providers will need infrastructure in all relevant countries
to interact with the local PSTN providers for local number handling. Most providers have
inconsistencies in the countries they service with regard to the type of SIP trunking services they
offer — inbound, outbound, full PSTN replacement and toll-free. This means that they will rely on
their PSTN partners for more extensive PSTN carriage. This will limit or even prevent providers’
ability to offer customized number plans and routing, and it may also lead to higher call charges.
In all cases, the global providers will need to rely partly on their own WAN services and local
partners, as for any traditional global WAN service. As enterprises move their telephony onto an SIP
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trunking platform, they need to ensure that the global WAN is properly dimensioned and
configured.
Besides ensuring infrastructure in all relevant countries, enterprises should also ensure that the
provider has technical support staff in the region as well as a help desk operating during local
business hours.
Recommendation: Ensure that the providers clearly detail what services are included for each
country, as well as what partners are used for any local services.
cost of a SIP trunking solution vis-à-vis a TDM based solution can be up to 50% lower, especially
when using a centralized trunk architecture rather than a decentralized one. Since the traffic is
routed over the IP connection, significant savings come from the elimination of separate
PSTN/ISDN or similar access lines. Ethernet access plays an important role in delivering cost
savings. In the U.S., we note the following price differentials: a T1/DS1 is $150 per Mbps,
compared to 50 Mbps over Ethernet, which has dropped to $14 per Mbps. Overall price trends for
SIP trunking are also expected to decline at double-digit rates for the next few years. The edge
devices are usually also cheaper and the call rates significantly lower, if charged for at all. Scaling
is possible through buying more licenses for the edge device and/or allocating more bandwidth to
voice traffic. Moreover, the possibility for least-cost routing for nationwide outbound calling allows
for further cost optimization.
SIP trunking allows enterprises to buy the exact number of concurrent calls needed, rather than in
specific increments of 15, 23 or 30 lines. This ability to buy on a more granular basis is augmented
by features such as call bursting, which enables temporary use of further call sessions beyond
what has been bought. This is valuable when there could be instances where additional capacity
could be needed, such as in the case of an unexpected event. Call pooling is a further feature that
has an effect on overall cost. Rather than provision for peak consumption at every one location,
“pooling,” or sharing, of concurrent call sessions across the estate reduces the total number of
required trunks. This is possible because few locations are operating at peak capacity
simultaneously.
Recommendation: Use a competitive bid process and require a yearly rate review to take
advantage of the lowest rates, thereby saving an additional 10% to 20%.
However, depending on circumstances, there may not be enough validation evidence to ensure that
the desired functionality will operate on an end-to-end basis. Therefore, validate that a particular
vendor’s make, model and version number of VoIP gateway, SBC or IP PBX has met the
interoperability requirements of the SIP trunk service provider of interest. Do this for both SIP
signaling and the specific SIP features of interest.
Pay attention to the transport layer for the trunks. SIP trunks may be provisioned over transport in
three different ways:
1. Most SIP trunk providers support SIP over Ethernet access (over standard wavelength speeds or
even DOCSIS 3.1 connections), or over (unchannelized) T1/E1. Usually these are bundled with
the SIP Trunk service, but some providers allow clients to bring their own access to the SIP
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providers’ edge, over which they run the SIP service.
2. An alternative approach is to employ over-the-top (OTT) SIP trunk services (such as those
offered by Twilio, Bria Solo or Bandwidth) where the service operates independently from the
lower transport and access layers (TCP/IP, MPLS).
Service-Level Agreements
SIP trunking service-level agreements are generally composed of several different elements, such
as availability, time to repair, performance and on-time provisioning. Enterprise-class SIP-trunk
providers also provide SLAs around call quality — most commonly using the mean opinion score
(MOS). Given the variation in provider infrastructure across countries, specific SLAs will vary in
metrics by geography (for example, ranging from 99.999% availability to 99.9%).
All providers will offer a “service availability” guarantee, but the scope typically only includes the
server in the provider’s data center, where the providers offer 99.9% to 99.99% availability. This
guarantee may include connectivity to the PSTN, and if any SBC is deployed in the provider’s data
center, this may be included. Any equipment deployed in the enterprise office or data center, such
as an integrated access device (IAD) or SBC, may have a separate availability guarantee if it is
managed by the provider. But no provider will offer an end-to-end service availability guarantee.
Few providers offer any type of call setup time or call success guarantee, nor any
add/move/change guarantees. Providers are, however, evolving their online portals to include not
only service reporting, but also order and fault ticketing reporting, as well as self-service
capabilities (see “How to Interconnect With Azure, AWS and Google Backbones”).
Recommendation: Ensure that the providers clearly specify what is included in any proposed SLAs,
and what is not, for each site using the service.
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Market Introduction
There are several different types of providers. Table 2 shows examples of different providers in
different geographies.
Verizon IP Trunking
The vendors listed in this Market Guide do not imply an exhaustive list. This section is intended to
provide more understanding of the market and its offerings.
Market Recommendations
Given the ongoing trend of decommissioning TDM infrastructure in many places around the world,
enterprises should now familiarize themselves with the time frame for that decommissioning of
currently used providers, and be insistent if the providers are vague. This is a good time to review
the voice strategy overall: Evaluate who needs what telephony features and for what purpose, and
where those users are. Currently, many environments are characterized by blanket rollouts for
traditional voice, mobile voice and UC in some form. That means that users have multiple access
points to the same functionality through different devices, services and applications. This may
cause user confusion and excess costs. Consequently, a SIP rollout may not need to be a complete
replication of the previous TDM infrastructure.
In the evaluation for SIP trunk service providers, review capabilities through three main segments:
■ Technical/functional — Does the provider offer the required mix of voice features, security,
geographic coverage, types of calls (local, domestic, international toll free, emergency calls,
etc.)?
■ Commercial — Is the price competitive? What does the pricing model look like? Several offers
include on-net traffic, but the definition of “on-net” varies. Are there measures to keep the price
competitive, such as through rate review clauses?
For each of these three segments, be certain to clarify what is currently offered, as well as where
and how. SIP trunk services are still evolving with regular enhancements. It is therefore important
to also have clarity as to what enhancements have been approved and are fully funded so that
they will definitely become available to clients. From Gartner inquiries, we see evidence of thorough
vendor selection taking these three aspects into perspective, though weighted differently from
enterprise to enterprise, which significantly increases the likelihood of a successful SIP trunking
service deployment.
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Evidence
This research draws from more than 100 inquiries with Gartner clients and numerous vendor
briefings.
Note 1
Representative Vendor Selection
Gartner estimates that the number of providers meeting the Gartner definition exceeds 100. The
representative providers included in this Market Guide were selected from providers headquartered
in the three major regions that Gartner clients are showing an interest for SIP trunking services in.
These are also providers that are attracting general interest (based on searches on gartner.com and
in client inquiries).
Note 2
Gartner’s Market Coverage
This Market Guide is the second Market Guide for SIP trunking by Gartner, and focuses on the
market definition, rationale for the market and market dynamics.
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