The modern alternative to the ISDN system is SIP trunking. Like PRI, SIP trunking connects your internal PABX to the PSTN, but it does so using Internet Protocol (IP) technology.
Companies that supply this internet telephony service are termed “SIP providers.” Under the IP system, data is split up into segments that get carried across the network and the telephone system in “packets.”
The packet contains a body, where the data is carried, and a header, which contains routing and administration information. The header contents enable the data to reach its destination and then be reassembled into its original form.
Packet networks don’t require dedicated channels because the identifiers in the headers mean that the data from different customers can all be routed through to different destinations, even though they might travel in a common stream most of the way.
The only limiting factor is the bandwidth capacity of the carrying wire, cable, or fiber. As a result, it’s easier for users to expand their service in order to use more of the available capacity on the physical infrastructure.
SIP providers have to aggregate demand from many customers and ensure that there is enough capacity available for all of their traffic to travel without being queued.
Wholesale VoIP Termination Rates
A SIP trunk is a series of virtual connections, so there is no need for physical termination of each link (as there is with PRI). Using a shared infrastructure requires less hardware; therefore, SIP rates can be cheaper than the prices offered for PRI services.
As SIP is a newer technology, smaller companies entering the market have fewer non-wage labor costs accumulated from years of operations to deal with – for example, pension fund costs or extensive physical infrastructure.
In this way, taking advantage of SIP enables new, lean businesses to level the playing field with more established providers. Reducing costs is a primary goal of all businesses, and it usually proves to be the main motivator when enterprises investigate a switch to VoIP.
By switching to a SIP provider, businesses can save on the rental costs of dedicated lines, which can be several hundred dollars per month. There are also savings to be made on individual call costs.
Though these vary between providers, many offer landline calls free of charge, in addition to cost-effective rates for dialing mobile and international numbers. Some services even provide mobile apps, allowing cell phone calls to be channeled over the internet as well at almost no cost
The Cost of Switching to SIP Provider
Many recent PABX systems can work with either PRI or SIP technology, so there may well be minimal need for hardware changes. Businesses organizing office telephone systems also have the option of choosing a hosted PABX in the cloud, which removes the need to buy and maintain telephony or computing hardware on-site.
That said, quality of service (QoS) is an area of concern for many businesses that are considering switching to IP-based systems. Call quality with ISDN systems is high because it provides a dedicated channel for each call. SIP providers, on the other hand, have to ensure that there’s sufficient bandwidth on a shared line in order to ensure QoS for all IP-based telephone connections.