Hard to Make a Business Case for SIP

SIP trunks are touted as a better alternative to PRI circuits. That might be the case in certain situations but don’t expect to see businesses rushing to make the change. MPLS was a true improvement over Frame Relay, and worth the added expense. SIP trunks are scalable, faster to deploy and can utilize your company’s existing IP network. SIP service offers the use of remote DID telephone numbers, so a company could have phone numbers, from area codes across the United States, ring to a central location. But, despite what the carriers claim, don’t expect to see a cost savings with SIP.

One of the main arguments for SIP is that you don’t have to order SIP trunks in groups of 23, like PRI’s. So say you need 30 call paths, with SIP, you order 30. With PRI’s you would need two PRI’s, providing you with forty six call paths, which might seem like over kill. But let’s do the math. The typical SIP trunk cost $30 per month. In this example, 30 would cost a company $900 a month. Then there is the cost of bandwidth. Let’s say a company is going to order a separate internet circuit to support the SIP trunks. In this example, we’ll say that the carrier is using G.729 so a single T1 could support the 30 SIP trunks. If we use $450 a month for price of the T1, the total with SIP is $1,350 a month. Compare that to average cost of two PRI’s, which would be about $1,000.

There are cheaper versions of SIP. Typically they ride on a customer’s provided internet access. The problem here is that there can’t be true Quality of Service (QoS) with this set up. The only way to achieve that is to order internet access and SIP trunks from the same provider. Doing so would keep the voice traffic on the carrier’s private network, where your voice traffic can be assigned priority over your data traffic and your voice traffic never hits the public internet. To accomplish this, you need to pay carrier pricing.

Even then the savings aren’t significant. With our 30 call path example. The cheapest price I’ve seen for call paths are $10 per month, per path. That equals a total of $750 per month (30 x $10 + $450). That’s a savings of $250 a month for a significant reduction in call quality. And that’s overlooking that most of the providers pricing SIP at this level limit the amount of included minutes and charge per minute when you exceed those minutes.

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