Session Initiation Protocol (SIP) was developed in 1996 as a method of addressing the needs of IP-based communications that evolves constantly. SIP is a signaling protocol used to initiate and terminate voice or video communications over the internet.

It can be used for two-party (unicast) or multiparty (multicast) communications via one or multiple media streams. To initiate or terminate a session, SIP puts five factors into consideration.

• Location of the user.
• User availability.
• User capabilities.
• Session setup.
• Session management.

SIP makes communication easier for businesses as it enables internet calls, video conferencing, as well as other methods of communication. In fact, when it comes to audio quality, over 90% of SIP users are satisfied.

However, to use SIP, a business must have a Private Branch Exchange (PBX). A PBX is a private telephone network that facilitates both internal and external communications for organizations via different channels.

Sip Trunking vs. Hosted PBX

When it comes to using voice over internet protocol (VoIP), organizations have to choose between an onsite PBX and a hosted private branch exchange.

With hosted phone systems, all the technical aspects of providing the service are handled by a vendor. The SIP licenses you will require to make internet calls or over Ethernet connections will also be provided by the vendor.

Institutions that elect to have a PBX within their premise have to manage all these technical aspects in house. Hosted systems and onsite PBX management enable businesses to use SIP, but each has its unique benefits.

Hosted PBX

With hosted phone systems, organizations do not need to worry about maintaining any equipment to access the functions of a private branch exchange. The offsite PBX will route all calls to extensions while your vendor will be responsible for hardware and software.

Benefits of Hosted Phone Systems

• Access to standard PBX services such as conference calls, voicemail and call recording.
• No need to buy, service or upgrade any equipment.
• The only onsite equipment needed are handsets and a gateway.
• Depending on your vendor, the degree of flexibility and scalability can be very high.
• Bundling unified business communications enable you to save on costs.

Cons of Hosted PBX

• The strength of the connection to your vendor’s service determines the quality of service (QoS).
• The features and add-on services vary with service providers.
• The vendor maintains a high degree of control.

How Much Should You Expect to Pay for Hosted PBX Services?

To begin with, institutions will have to pay a small set up fee and purchase some equipment. From this point, there will only be a monthly fee charged by the service provider. These costs will vary depending on the vendor, add-on features, and the level of investment you will have to make for equipment.

For unlimited local and long-distance calls, you can expect to pay between $20 and $40 per month.

SIP Trunking

SIP trunking uses VoIP as an intermediary between your Internet Telephone Service Provider (ITSP). It requires an onsite PBX and a gateway to connect you to your ITSP.

Pros of SIP Trunking

• Has a high potential for improving efficiency and reducing communication costs.
• It uses your IP network to turn vice into an application on the network.
• Organizations do not have to wait for additional circuits to be installed to add caller appearances.
• Offers flexibility in regard to where the phone service is being provided as call appearances can be quickly routed to other sites.

Cons of SIP Trunking

• It is essential to have effective bandwidth analysis to ensure Quality of Service due to the multimedia transmissions.
• Finding qualified personnel to handle the maintenance of the PBX is challenging as the technology is relatively new.
• Requires high initial investment to purchase and set up the equipment.

Get the Best for Your Business

Communication plays a vital role in the growth of a business. Therefore, organizations need to ensure they have a reliable and cost-effective mode of communication. With hosted phone systems and SIP trunking services, enterprises get just that. However, you have to choose the option that best suits your company.