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VoIP is all the rage and hype in the telecommunications business, but VoIP can mean many things and its fitness for a specific purpose varies greatly. When it comes to replacing traditional phone (PSTN) lines with SIP trunks I always hesitate because its not right for every small business.
SIP trunks often are delivered two different ways - some companies bring in their own T1 and run SIP across their private network, which if done right ensures good quality calls. Some companies sell SIP trunks which go across the public internet, which is risky as call quality now depends on an uncontrolled network.
Needless to say if SIP trunks will be depended upon, it makes sense to deliver them over a T1 on a dedicated network. This leads to the first decision point if SIP trunking is right for your business - the T1 alone costs $350-400 per month. For many small businesses this means an increase in cost over PSTN lines and DSL internet access.
Once you have a T1 in place, SIP trunks are often charged two ways - metered or flat rate. Metered calls mean any call - inbound, outbound, toll free, local, or US long distance will be charged per minute. This has upsides and downsides. Local calls on SIP cost more than with PSTN lines, long distance less, inbound calls to a local number cost more, but toll free usually less. In other terms this kind of plan works great for companies that market a toll free number and mostly call long distance, but not for companies that market a local number and mostly call locally.
Flat rate SIP trunks are also very tempting for small businesses which have consistent high utilization of toll free inbound and outbound long distance calls.
Bottom line - though rates vary, a SIP trunking T1 with 8 unlimited lines from one carrier is $729 per month. For comparison a dynamic integrated T1 with 8 local lines from another carrier is $499 per month. Assuming a moderate price of $.04 per minute for long distance, a business needing a T1 would need to spend nearly 6000 minutes to make up the difference. But many small businesses don’t need a T1, so 8 local PSTN lines and a 6Mb DSL can be as little as $180 per month, a difference of over 13000 minutes of long distance.
SIP trunking makes sense for some small businesses, but it depends heavily on calling patterns and desired phone system features. A telecom consultant is a great way to understand what the options really cost and which will make the most sense for a given business.
The Author: Kevin Selkowitz
About: Kevin Selkowitz is the founder and lead consultant for Selkowitz Technology, a Seattle-area small business systems consulting company. We focus on the four major technology needs of small businesses - phone systems, phone and internet service, servers/network infrastructure, and business applications.
This entry was posted by Kevin Selkowitz, on Thursday, March 6th, 2008 at 3:38 pm and is filed under Phone and Internet Services. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response on the right, or trackback from your own site.
