What is SIP Calling, and How Does It Make Communications Easier?

Small businesses continually seek ways to make their operations more efficient and easier to manage.  But as a business grows, so do the number of communication channels organizations must manage. As a result, modern-day companies require a phone system that can quickly adapt and evolve as they expand their operations into new markets and locations.

One cost-effective solution is migrating the traditional hardware-dependent phone system to a virtual one that uses Session Initiation Protocol (SIP) over the internet. This versatile technology is steadily increasing in popularity and is expected to garner a revenue of $7,680 million by 2028. 

What is a SIP? In this article, we’ll explain a SIP and how it can decrease your phone network expenses while providing several key benefits to your business. 

What is a SIP?

In a traditional or legacy phone switching network, a Private Branch Exchange (PBX) is responsible for call management features such as voicemail and call transfer. In the PBX,  Primary Rate Interface (PRI) lines connect calls to the Public Switched Telephone Network (PSTN). PRI uses copper telephone lines to deliver voice and data. The PSTN is responsible for routing each one of the calls to its destination.

However, with SIP, there is no longer a need for a physical connection to a phone company with multiple phone lines. Instead, SIP is a protocol used in VoIP (Voice Over Internet Protocol), or internet-based calls, to virtually transmit voice and data traffic.  SIP is established when the SIP trunk (or a virtual phone line) is installed over the current internet connection. This trunk enables traffic to bypass PRI lines and connect directly to the PSTN via the internet. SIP signaling protocol initiates, maintains, and terminates real-time sessions that include voice, video and messaging applications.

SIP trunking can connect IP-enabled PBX systems, VoIP phones, and other VoIP equipment. Organizations can also use SIP trunking to connect two or more VoIP networks.

Related: SIP Trunking Basics: What is a SIP Gateway?

While VoIP can function without SIP, SIP is a versatile protocol that provides compatibility with a broader range of online calling software, making it an ideal choice for businesses needing the flexibility to integrate with third-party applications. 

What are SIP phones?

The SIP phone is an essential hardware component for communication over the VoIP phone service. While they resemble traditional office phones, SIP phones have greater functionality and higher call quality. Common features of the SIP phone include basic and advanced call forwarding, conference calling, call recording, mobile and desktop app integration, custom caller ID, auto-attendant, and HD phone calls. 

The SIP phone is a hardware component, but the term softphone describes the software that gives the phone its functionality. This software lets users download their business phone functions into their computer or mobile device. 

Benefits of SIP phone systems

There are several advantages to utilizing SIP phone systems. These are as follows: 

Recurring cost-effectiveness

The costs associated with PRI systems are often higher than those associated with SIP trunking. The higher costs are due to the maintenance and upkeep of the bundle of copper wires that PRI requires. As PRI technology becomes obsolete, the prices for maintaining these connections will continue to rise. On the other hand, SIP uses the internet to carry the signal virtually rather than relying on physical wiring connectivity. 

Businesses realize cost savings with SIP in the following ways: 

• There are no substantial upfront investments necessary for hardware and installation. Maintenance costs are eliminated since SIP uses the internet instead of expensive phone lines. 
• Subscription fees are removed with the elimination of a PSTN gateway.  It’s no longer necessary to subscribe to different services for voice and data since they are consolidated into one network.
• There are no extra charges for long-distance calls; they are all turned into local calls. Instead of being charged by the minute, a monthly fixed fee for unlimited calls is paid. 
• SIP uses one centralized network rather than multiple networks. 

More flexibility and functionality

SIP allows anyone to make calls with any internet-connected or landline device. The network can identify user locations, reroute calls, be used for video conferencing, allows 911 emergency calls, has call forwarding and recording features, and the ability to route calls to different locations or operating centers. 

Greater scalability than legacy phone networks

Adding phone lines to a legacy phone network takes a notoriously long time due to the provisioning and installation of lines and equipment. SIP networks are easily scaled by purchasing one channel or line at a time when needed. As your company grows, bandwidth and users can be easily added or modified.

A single SIP trunk holds unlimited channels or lines, so only one trunk is necessary regardless of the amount of incoming and outgoing calls. However, the more calls your business will run, the more trunk channels are needed. Since each noncompressed call requires 85-100 kbps (kilobytes per second) of bandwidth, the required bandwidth is calculated by multiplying the number of simultaneous calls during peak hours by 100 Kbps. However, businesses that have an on-premises PBX can have unlimited concurrent calls. 

The ease of scalability in SIP takes the guesswork out of planning for future growth and the need to house extra equipment for future lines. Businesses can also add additional services such as call recording and voice analytics. 

Related: SIP: Benefits for Business Communications

Ease of installation and training

SIP calling is easy to implement in the office. Maintenance is done through a simple online control panel. With the consolidation of communication needs into one device, staff only need training on one system, simplifying the process and ensuring everyone is on the same page. 

Minimal maintenance

Without a physical infrastructure, there are no lines or equipment to maintain. Adding, monitoring, and troubleshooting channels is efficiently done online within minutes through an online control panel.  Services are quickly and easily rerouted in the event of a failure, minimizing downtime. Software updates are easily done remotely, preventing downtime and onsite service calls that would otherwise interfere with day-to-day operations. 

Improved sound quality

Today’s SIP services provide high-definition quality calls, extended frequency, and twice the sample rate of telephonic audio. This translates to a dramatic improvement in sound, enabling call participants to hear one another clearly. 

Extended calls and data available outside the office

In a traditional phone network, there is no way to receive calls outside the office using the same phone number. SIP allows calls to be routed to employee mobile devices so anyone can contact them anywhere. This is an invaluable tool for remote workers who are only reachable via the company’s phone. 

Redundancy prevents extended outages

Legacy phone systems are prone to catastrophic outages, resulting in a company-wide communications breakdown that can take several days to several weeks to restore. However, with SIP,  the service provider can reroute calls to other data centers in different locations during an outage. Calls can also be routed to mobile devices or other phones, ensuring communication continuity and reliability. 

The demand for this technology continues to increase in light of the above benefits SIP provides. Transparency Market Research forecasts the global market for SIP trunking services could grow at a 13% annual rate until 2030 and reach a market value of US$ 35.5 billion. 

How SIP calling helps customer service

Traditional phone systems discourage customers from calling due to delays in reaching representatives caused by long hold times and endless transfers. Customers want to speak with a live agent and not be greeted with a long list of menu options. 

However, businesses can better manage incoming call routing with SIP calling to cut wait times and direct calls to the appropriate agent and department. This is especially useful for call centers with heavy call traffic. A real-time software control system allows businesses to monitor call flow and make routing adjustments quickly and easily during peak times. 

Since SIP call technology uses the internet for communications via computers and mobile devices, call centers can use home-based agents. This enables the business to save money on facilities and utilities. Additionally, it allows companies to better serve their customers by connecting them with a pool of specialized agents located anywhere in the world. 

SIP calling is not just for small businesses

While small businesses and startups benefit from the savings and flexibility of SIP calling, global companies with larger systems are also reaping the rewards of this technology. 

Large businesses are migrating their legacy systems to VoIP with SIP for several reasons:

• Time management and data-gathering tools 
• Accessible and straightforward internal calling
• Better contact with international clients
• Ability to work anywhere where there is an internet connection
• Unified communications let you easily combine technologies and platforms

Factors driving the SIP call market

A recent 7-year SIP trunking global market forecast by Eastern Management reinforces the growing popularity of SIP-based networks. As businesses and government agencies invest in upgrading to 5G networks, the VoIP and SIP call market will expand as these technologies lead to higher transfer speeds for quality voice and data services. With this in play, it’s expected that the VoIP market will grow to $55 billion by 2025. 

Additional benefits that 5G will bring to the VoIP/SIP market include the following: 

• Higher definition video content with faster loading speeds and no buffering
• Improved connectivity for wearables, resulting in better performance and user experience
• A significant decrease in the number of dropped calls can boost productivity. 

The impact of COVID-19 on SIP

When the pandemic forced employees to work from home, many companies adopted IP telephony services with SIP to facilitate more efficient communications from any location. The rapid growth of remote work can continue to foster this telephony’s growth even further by 2028, with the potential to generate over $3 million in revenue. 

Additionally, VoIP services used during the pandemic resulted in the following impacts: 

• A 25-30% average increase in wireless voice minutes. 
• A 7% increase in mobile device streaming. 
• Voice and video calls tripling in 2020. 

SIP phones of the future

With ongoing digital transformation, SIP phones are evolving to meet the demands of businesses, especially with the popularity of the hybrid workforce. New applications and features on SIP phones include:

• Integration with apps such as Zoom and Microsoft Teams for project collaboration
• A smartphone-like experience on SIP phones with devices using touch-screen displays. 
• Artificial intelligence solutions that respond to voice commands: SIP phones can track usage data to help businesses make informed decisions. 
• Modern SIP phones are built with enhanced security features. 
• Features such as noise-canceling microphones, high-definition audio, and power-saving programs. 

Conclusion

SIP trunk and phone solutions are continuing to make a significant impact globally. The demand for economical, cloud-based telephony services is ever-increasing as businesses of all sizes seek to reduce operating costs. SIP trunk providers are ideally placed to meet this demand, offering high-quality, scalable services that can easily adapt to the needs of any organization. SIP technology is a game changer for businesses because it gives them freedom and flexibility to grow at the pace that works best. When you’re ready to take your office communications to the next level, partner with SIP.US. We are true leaders in the SIP phone industry and can help you implement a system that is reliable, cost-effective, and easy to use. Simply fill out our online form today, and one of our experts will be in touch to get you started.