As the VoIP and unified communications (UC) markets made a comeback in 2010, SIP trunking had a break-out year. This is according to a report by Infonetics Research, which found that the VoIP service market reached $49.8 billion in 2010, a 43 percent increase from 2008.
What’s more, Infonetics predicted that the combined business, residential and small-office/home-office market for VoIP services would skyrocket to $74.5 billion in 2015. Infonetics also noted that managed IP PBX business VoIP service revenue is expected to more than double from 2010 to 2015.
One of the report’s most startling findings was revenue growth of 143 percent in SIP trunking, making it the fastest-growing segment of the VoIP services market.
For small and mid-sized businesses, these findings lead to a natural question: What is SIP trunking?
For years, large enterprises have leveraged this technology to save on their telecommunications bills. Now, SIP trunking is available for smaller organizations, which can reap significant savings as well.
Session Initiated Protocol (SIP) allows businesses to install a PBX to use Voice-over-IP (VoIP). It essentially goes around the PSTN (Public Switched Telephone Network, or the traditional copper-and-switches telecom infrastructure) to make phone calls inexpensive. If both parties on a call are using SIP devices, the call can cost just a fraction of a cent per minute. If only one end of the call is using a SIP device, there will still be some savings, though not as much.
SIP trunks can create major cost-savings for companies, which may no longer need local PSTN gateways, ISDN BRIs (Basic Rate Interfaces) or PRIs (Primary Rate Interfaces). Most new phone systems include built in support for SIP. SIP-enabled phone systems also provide a greater feature set, such as virtual phone numbers, follow-me phone numbers, and more.
As SIP trunks continue to grow, expect a gradual decline in the use of T1 lines for voice and data. The increased affordability and reliability of high-end DSL, fiber and other high-speed services, paired with the huge cost advantages of VoIP, makes T1s and other expensive, dedicated lines less attractive to small and mid-sized companies.
