Jumping Aboard the SIP Trunking Bandwagon

Posted by Gary Wilson, Product Manager

February 13, 2014; 8:30 AM

Sail_wagon_edit1It’s been a year since ESI started offering SIP Trunks under the ESI Hosted Services banner. With a 45-50% increase in SIP Trunks sales in 2013 (compared to the 25-30% growth rate for SIP Trunks in the industry overall according to Infonetics Research), I’d say this venture was a great success! But will we stop here? No way! There is still a lot of room for growth, and we have much more to offer in cloud services coming up.

So where will this future growth come from? As Shawn indicated in For Whom the Bell Tolls, the FCC has changed the rules again to favor VoIP services. According to the Wall Street Journal, this has been going on a while now since the Universal Service Fund spending currently focuses more on bringing broadband to rural areas rather than phone services. Any extension by the FCC to provide VoIP services makes perfect sense once the networks needed to deliver those services have been laid. The trends here should be obvious based on the past several years of rule changes: encourage broadband growth, then encourage VoIP.

I think everyone has accepted that the old phone networks are being pushed out. Along with other major communication providers, AT&T has made it clear that this is the direction they want according to an announcement made to Reuters in late 2013. Keep in mind that most of the carriers exchange traffic via SIP between their networks today while backhauling most of their own internal traffic via SIP and not analog or TDM. The last mile is this last bastion of the old TDM-based PSTN.

Many enterprises are switching to SIP Trunking as well. Within IT departments, the Telecom and Data sides used to be separate domains requiring separate skills to manage each. However, with the dominance of data enterprise, the Telecom teams are generally folded under the Data teams, so IP technologies get the focus. The PBXs get SIP upgrades and SIP Trunks are brought in since the Data teams are more comfortable handling, well, data. And VoIP traffic is data, just with a slightly more real-time requirement to it.  

Many enterprises are also finding that their old PBXs are getting more expensive to maintain and upgrade. PRI and analog line card costs have been steadily increasing along with the costs for components, especially as volumes drop. A new PBX can sometimes be cheaper than the maintenance needed on an old one. A driving factor to this is the widespread shift to software, including what used to be done with Digital Signal Processors (DPSs). Many of the large carrier-grade switches installed in central offices are now simply racks of commercial IT-grade servers from traditional vendors like HP and Dell; these now run commercial off-the-shelf operating systems and software.

The trends are becoming increasingly more obvious. If you haven’t jumped aboard the SIP Trunking bandwagon, you will be left behind, whether by technology obsolescence or governmental mandate.