Moving to a service provider that can reduce the cost of calling by using IP communications is well worth the effort.

Channel Partners

October 4, 2012

2 Min Read
The Cost Benefits of SIP

 By David Byrd

Today I am participating in a panel discussion, “The Conversion From TDM to SIP: Evaluating the Benefits of SIP Trunking,” at the ITEXPO Austin 2012. Among the topics to be covered are the cost benefits of SIP.  

Over the last few years, there have been detractors noting that certain estimates for savings when transitioning from TDM to SIP have been overblown. Consequently, some companies have delayed or abandoned the effort entirely. For most SMBs, the transition is easily monetized. It is in the enterprise space where simple VoIP supports intracompany calling may provide enough savings and optimization to preclude the effort of adding additional equipment to support SIP trunking.

The major access savings are listed as follows:

  • Per line cost: Per line cost can be reduced by 60-80%. Most SMBs purchase some type of phone line that includes a local calling area starting at $29.99 per month for a TDM line. While plans vary between different VoIP/SIP Trunk providers, this service can be as low as $10 per line per month. That is a savings of 66% with the additional 2-5% savings due to lower taxes and fees.

  • Usage/metered services cost for local inbound/outbound calling: Savings can be up to 100% as most ITSPs do not charge for outbound or inbound local calling.

  • Toll-free inbound calling: Toll-free calling can be as low as 2¢ per minute, depending upon volume. AT&Ts quotes a low of 5.9¢ per minute or 295% more.

  • Domestic long-distance calling: Calling within the 48 contiguous United States and Canada is widely available and from an ILEC purchased for $55 per month with Canada extra. Selected ITSPs include Canada for as low as $24.99 or a 55% savings.

  • International calling: ILEC pricing is dependent upon the selected plan and the country called. In comparing certain country terminations the savings can be 90%. Given the number of countries and rates quoted an average number is difficult to determine.

Clearly, moving to a service provider that can reduce the cost of calling by using IP communications is well worth the effort. And as most ILECs evolve their networks to IP more of their customers will benefit. It is difficult for the ILECs to compete with the ITSPs since they will experience a revenue drop per customer. However, at some point the revenue drop is preferred over the loss of the customer.

David Byrd is chief marketing officer and executive vice president of channel sales for
ANPI ZONE . He previously spent five years as vice president of marketing and sales for Broadvox and before that was vice president of channels and alliances for Eftia and Telcordia.

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