Benefits and Risks of SIP Services: What Every Channel Partner Should Know

Learn more about the equipment and bandwidth requirements, voice usage costs and more.

Channel Partners

June 10, 2013

6 Min Read
Benefits and Risks of SIP Services: What Every Channel Partner Should Know

By Suzanne Rosato

There is an increasing trend toward enterprise clients adopting Session Initiated Protocol (SIP) services. It is likely that by the end of this year, SIP will be the most commonly deployed trunking service behind T1s. Most of the discussion in the telecom industry surrounding SIP trunking has been focused around the benefits SIP offers for enterprises. While most are focused on SIPs potential to save organizations money, SIP services also offer enterprises a number of benefits including convergence, ease of administration, enhanced end-user functionality (voice, video, presence and messaging) and integration with IP networks. So if youve been asked recently if SIP trunking is right for a company, its important to review the companys infrastructure and analyze their needs and objectives before making the decision. To help you decide, here are further details on the benefits and risks companies may encounter if they use SIP trunking.


If an organization has smaller satellite offices, there is potential to access a central PBX and eliminate the need for PBX switches in those smaller offices. If the client conceptually understands that SIP calling is free” inside of the cloud,” then the company can begin to understand how a central PBX might be shared with remote locations in an economical fashion. In addition to simplifying management and administration, this scenario provides for a homogenous end-user experience relative to features and functionality. There may also be savings associated with the SIP edge device as compared to traditional TDM trunk cards in the PBX. This is because the SIP edge device can support more simultaneous conversations.

Voice Usage Costs

When a call can be completed without accessing the PSTN, it does not incur usage costs. However, it is important to remember that if your customer is using VoIP, the potential for additional savings decreases with a migration to SIP. The exception to the rule is in cases where another SIP client with similar hardware enables the calls to be completed without accessing the PSTN. Most managed SIP services include unlimited local calling and some bundle of minutes for a monthly recurring fee. There usually is no distinction between intrastate and interstate minutes. Nevertheless, international and other types of calls (i.e., Directory Assistance), are charged at separate SIP rates,” which may be more expensive than negotiated TDM rates for similar types of calls.

Shorter haul calls may be an additional source of savings if the ITSP has an egress point close enough to the receiving party. In this case, a call is local once it transfers onto the PSTN, given that a number of SIP offerings include unlimited voice usage. This is called local breakout” and can be applied in a scenario where a call from the U.S. travels via the SIP cloud to a SIP terminating point in an international country. When the call completes via the public network in the foreign country, it appears to be an intra-country call and usage will be rated on that basis.


Another source of savings comes with the physical connection or SIP trunk. SIP equipment providers are fond of advertising the elimination of your local services lines.” While SIP trunks can replace business lines, it is important to recognize that there is a monthly recurring charge associated with SIP trunks. There may be a need to retain business lines for alarms, fax or 911 functionality. In some cases, the costs for the SIP trunk varies based on the facility. For example, fiber, cable or Internet can be used it simply needs to connect to the ITSP. In addition, a SIP trunk may not be subject to the same taxes and fees as a traditional line, although the specifics will vary by provider and state. One of the reasons for the excitement surrounding SIP trunking is the better use of bandwidth for simultaneous conversations. For example, the upper limit on a T1 (not sharing Internet traffic) is about 50 concurrent calls, while the limit for a PRI is 23. This also means that an organization can add conversation capacity” linearly rather than insert an additional PRI with 23 lines when capacity is needed for the 24th” conversation. In the SIP environment, an additional conversation is added by changing the bandwidth allocation or buying additional software licenses from the SIP managed service provider.

Additionally, SIP voice and data can share the same access. Of course at some point, all bandwidth is finite. When accessing the Internet for data concurrently, there is logically less bandwidth available for voice traffic. In an ideal situation where a retail site has 15 business lines (of which a few lines need to remain in service for fax and alarms,) there is a potential to replace an existing Internet port and most of the business lines with a single T1 SIP trunk such as Verizon Business Flexible T1 service. When customers purchase SIP services from a provider such as Verizon Business, AT&T or Sprint, there is a requirement for purchase of MPLS services for access. This is because the SIP calls are using the providers MPLS backbone for completion as opposed to the Internet. This allows the provider to manage the quality of service of the call end to end and can be considered a managed SIP service offering.

Risks Associated With SIP Trunking

These are some compelling benefits, but there are also some risks and concerns associated with installing SIP services that organizations should consider. The largest concern is security. Similar to Internet and email, a SIP connection can leave an organization vulnerable by acting as a channel for internal network attacks. Most firewalls do not account for real-time traffic and will not dynamically open and close ports. This is the primary reason firewalls do not replace edge devices. This is not to say that these concerns cannot be addressed or mitigated, however; some service providers have invested in network-based managed firewall services and other security features. At a minimum, encryption and authentication of SIP signaling are strongly recommended.

When it comes to making a decision, organizations should look at some key areas prior to contract completion. Here are some questions that will help determine what is right for your organization and should be asked of the potential provider:

  • Many ITSPs have a single data center. Is there redundancy?

  • If one of my offices moves, is there number portability?

  • What SLAs are offered?

  • Have SIP connect specifications been implemented?

  • What features are available?

  • How will you monitor whether trunks are in service?

  • What tools will be employed for identifying root cause of troubles?

  • Will we have to rely solely on packet tracing?

In summary, every enterprise user of traditional voice services should investigate, with the help of a channel partner, how SIP fits into their network strategy. There are some instances where SIP is a no-brainer,” and it may not be necessary to do a total cost analysis of the quantitative benefits of implementation before taking the plunge. For the rest of us, a careful analysis is necessary to determine whether there are sufficient benefits on top of the average cost savings of 10 percent to provide incentive for migration at this time. Many enterprise clients are adopting a wait and see” attitude toward SIP, while preserving flexibility in contractual arrangements to allow for a future migration. One thing is certain: We will be hearing more about SIP services in the future.

Suzanne Rosato is vice president at Tangoe Inc.

Read more about:

Free Newsletters for the Channel
Register for Your Free Newsletter Now

You May Also Like