SIP vs VoIP is a common question, but it’s not going to help you during the buying process.
Voice over Internet Protocol (VoIP) is a general term for technology that facilitates voice calls over the internet. It works by converting audio signals into data packets, then converting those packets back to audio when they’re received at the other end.
Session initiation protocol (SIP), on the other hand, is one of several protocols used to run a VoIP system.
Each protocol has its own rules and standards — MGCP, H.323, IAX, and RTSP are examples of other protocols VoIP systems can use. SIP is just one way, not the only way.
You don’t actually have to choose between the two. In fact, many internet-based calls use both.
If SIP vs VoIP isn’t the right question, what is?
SIP, SIP trunking, SIP trunking services, IP, VoIP, and VoIP services are often used interchangeably, despite being very different things. It creates a lot of confusion.
The right question you should be asking is whether to use SIP trunking services or VoIP services.
To clarify, here’s what these terms actually mean:
- VoIP: Technology that lets you make calls using the internet.
- VoIP services: Providers that give you everything you need to use VoIP technology, like Skype, Zoom, Google Voice, and Nextiva.
- SIP: A protocol that allows different technologies, networks, and systems to work together for real-time communication, including phone calls, video chat, and instant messaging.
- SIP trunking: A method of delivering voice services over the internet. It allows businesses to connect their existing phone systems (like legacy PBX) to the internet, making them cheaper and easier to scale without replacing the entire system. Switching to VoIP services, on the other hand, typically replaces an existing system.
- SIP trunking services: Providers, like Nextiva, Ooma, and RingCentral, that give you everything you need to use SIP trunking.
Deciding between SIP trunking services and VoIP services determines how you move forward and whether or not you have to entirely replace your existing system.
I’ve touched on how the underlying technologies behind these services work, but there’s far more to it.
How SIP works
When you place a call, send a message, or start a video call using SIP, the system sends a request to your server to initiate communication. That’s all SIP does — it doesn’t transmit call data or manage anything beyond starting and ending communication.
Traditional landline phone systems use copper wires that physically connect to the phone company.
When you upgrade to a SIP trunk, those physical wires are replaced with a digital connection to the Public Switched Telephone Network (PSTN).
This new connection links your old system to a virtual VoIP system, allowing you to communicate over the internet.
To make this work, you need a Session Border Controller (SBC) to manage the data flow between your old system and your new virtual system. You’ll also need a SIP trunking provider, who will set you up with a SIP server and create the connection to your existing system.
When you make a call, SIP sets up the connection and transmits that to your SIP trunk.
The trunk then routes a call from your virtual phone system to the destination, allowing your call to begin.
For incoming calls, it usually looks like this:
- An incoming call comes through your virtual system.
- It’s routed to your legacy phone system.
- Then it’s sent to a computer, mobile device, or IP-enabled phone (depending how you’ve set it up).
- If no one answers, the call follows the call routing rules you’ve set. That could mean going to voicemail or ringing a colleague’s phone.
This flexibility allows you and your team to answer calls on a range of devices, which wouldn’t have been possible without the SIP trunk.
SIP trunking tends to be a lot cheaper than traditional systems because it doesn’t require physical infrastructure. Plus, long distance calls cost the same as local calls, saving you even more.
However, SIP trunking is only useful if you already have a legacy system and want to keep the infrastructure you’ve invested in.
How VoIP works
If you don’t have an existing analog system or want to get rid of the one you have, making the full switch to VoIP services is the best way to go.
VoIP technology works by converting voice into digital signals, which are compressed and set over the internet as data packets. These packets travel across IP networks to their destination.
If you’re calling a landline, VoIP converts data packets into standard signals along the way so the other person can hear you.
When making an outbound call, it typically looks like this:
- Your phone connects to your VoIP service provider.
- They act as a switchboard to route your call. They also ensure your data packets are compressed and transmitted correctly.
- These packets are divided into smaller segments and tagged with important information, like who’s calling and who’s receiving the call.
- They then travel through VoIP codecs which compress the data further. This helps maintain voice quality while reducing the size of data packets, allowing them to travel faster with minimal latency or lag at the other end.
- At their destination, they’re reassembled and converted back into sound waves using a digital-to-analog converter (DAC).
Like SIP trunking, users can make and receive calls using a range of devices, including computers, smartphones, or physical phones. Some physical phones are IP-enabled, meaning they’re connected to the internet — these work seamlessly with VoIP systems.
Analog phones require an adapter to be able to connect to the internet. Once the adapter’s in place, it’s a seamless process.
VoIP services vs. SIP Trunking services
VoIP services are very different from SIP trunking services. On top of that, no two providers are the same — everything from features and price to implementation time and monthly calling limits vary wildly between them all.
This section aims to help you make sense of all that.
What do SIP trunking services look like?
Pricing is one of the main differences between SIP trunking and VoIP services.
SIP trunking is usually priced per channel (also called a trunk). Each channel represents one call. If you have a team of 100 but only need to handle 10 concurrent calls, you would need 10 channels. Price per channel typically ranges from $15 to $25 per month.
VoIP services and traditional systems, on the other hand, charge per user, with costs ranging from $30 to $60 per user per month.
Instead of paying (at least) $3,000 per month for 100 users, SIP trunking would cost between $150 to $250 per month for 10 channels. It ends up being more cost effective if you don’t need every user to have their own line.
In terms of implementation, it can go as fast as a few hours or take as long as a few days, depending on the size of your business and the complexity of your existing system.
Your provider typically handles most of the heavy lifting, including configuring your SBC and connecting your system to the VoIP network.
Some providers may charge a one-time setup fee, running from $200 to $500.
As far as features go, it varies a lot from one provider to the next. Basic features usually include caller ID, voicemail, and call transfers. Some may offer more advanced features, like videoconferencing, CRM integration, auto attendants, IVR, call recording, instant messaging, and more. Many providers let you add these extra features for an additional cost if you need them.
What do VoIP services look like?
Unlike SIP trunking services, VoIP services are priced per user. You’ll typically pay between $30 to $60 per user, depending on the features you need. Although it’s more expensive than SIP trunking, you get a much more powerful system with customization, automation, and internal collaboration features.
They include all of the same functionality as SIP trunking services (and then some) on top of a fully cloud-based software that’ll feel just like other tools you use.
You can manage the system from your computer, users get their own logins, and you truly don’t need any hardware whatsoever (unless you want to use desk phones). Your provider handles security, maintenance, and upgrades to the software so you don’t need IT resources either.
VoIP implementation is just as easy, taking as little as a few hours to a day in most cases. Many providers handle implementation remotely, making it easy for remote teams.
There are plans for regular business communications and contact centers that need advanced tools for managing calls at a high volume. Some of those advanced capabilities include:
- Live call monitoring.
- Speech analytics.
- Queue management.
- Workforce optimization.
- Performance management.
Scalability and implementation are the same between the two types of services — comprehensiveness, flexibility, and price are the main differences.
SIP vs VoIP: Which one should you choose?
If you have a legacy phone system and want to slowly migrate to the cloud or you have long-term contracts you have to fulfill, SIP trunking services are a great solution.
However, it doesn’t make sense to buy a traditional phone system for the sake of using SIP trunking services. For one, that’ll incur a massive upfront cost to implement the infrastructure you need. Second, it’ll take a long time.
VoIP services are the easiest, fastest, and most cost effective of the two for businesses without an existing phone system.