What is SIP Trunking and How Does It Work?

What is SIP Trunking? A Complete Guide For Small Businesses

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The advancement of the internet has undoubtedly transformed business communication. Once tethered to physical wired networks, companies today embrace SIP Trunking for business communication over the Internet.


The shift from wired to a wireless business phone system offered a more agile and adaptable communication solution. It offers businesses a way to scale up or down easily and save money compared to traditional phone lines. Moreover, adopting SIP trunk simplifies the communication infrastructure by integrating voice, video, and data services over a single internet connection. It further opens up new possibilities for innovative communication strategies and enhanced.

What is SIP Trunking?

SIP Trunking is a technology that enables the delivery of voice and other communication services over the Internet. Its primary function is to connect a company’s private branch exchange (PBX) to the internet, enabling users to make and receive calls online. This technology uses the Session Initiation Protocol, which is a standard protocol for initiating, maintaining, and concluding different types of communication. These forms of communication can include voice, video, and messaging. 

How Does a SIP Trunking Work?

SIP trunking operates using internet technology and different communication protocols. It involves a direct connection between your PBX phone system and the Internet, facilitated by the Session Initiation Protocol.


When you make a call, the SIP protocol sends messages to the recipient, requesting a connection. If the recipient accepts the call, the system transfers voice data online in a digital format. Typically, it uses Voice over Internet Protocol (VoIP) technology to transfer these voice data in a digital format. After the call ends, it sends another message to close the connection. 


SIP trunking basically operates as a bridge between your company’s phones and the internet. As you make a call, this virtual bridge helps send your voice over the internet as data.

Benefits of SIP Trunking

SIP trunking addresses many of the limitations of traditional phone systems. It upgrades a business communication system while cutting overhead and operational costs.

Cost Effectiveness

Unlike the traditional phone system, you don’t need hefty hardware installations to use the SIP service. It significantly reduces your overhead costs. Since calls are made over the Internet, long-distance charges are also lower. Plus, most SIP trunk providers offer a pay-as-you-go model, which means you’ll only pay for the capacity and features you need. It aids further financial flexibility.

High Call Quality

High call quality, a crucial factor for business communication, is another impressive benefit of using a SIP phone system. Its robust internet connections and advanced voice compression techniques produce high call quality. Because SIP operates over the internet, it is also less vulnerable to connectivity issues due to broken lines, often familiar with traditional phone systems. 

Geographic Flexibility

With SIP technology, your business isn’t bound by geographical limitations. Your employees can make and receive calls from anywhere, as long as they have an internet connection. It allows you to facilitate remote work or establish multiple office locations. The connectivity is seamless regardless of physical location - you just need to ensure robust internet service.

Scalable Communication Solution

When your business grows, SIP technology allows you to adapt your business communication solution accordingly. You can easily add or remove lines without installing additional physical infrastructure. It’s a perfect communication tool to ensure that you don’t face any challenges when there is sudden growth or changes in call volume.

Quick and Easy Setup

SIP installation doesn’t require extensive wiring and hardware to set up. So you can implement it swiftly with a quick configuration process. The configuration simply involves inputting some settings provided by the SIP Trunk provider in your PBX system. This ease of setup saves time while ensuring minimal disruption to business operations. 

Unified Communication

SIP trunking integrates various forms of communication, such as voice, video, and messaging, into a single, cohesive system. It streamlines your communication process, allowing employees to connect and collaborate effectively and enhance customer experience. 

How Much Does SIP Trunk Cost?

The SIP trunk cost typically ranges from $15 to $25 per line monthly. But it can depend on several factors - monthly subscription rates, call rates, and add-ons. The ‘Monthly Subscription Rate’ typically includes the price per channel for voice service, and the ‘Call Rate includes the talk time charge per minute. Likewise, add-ons refer to any additional features in the plan.  

The SIP trunk service providers generally offer the plan in metered and unmetered formats. In a metered plan, businesses pay a per-minute charge for calls on the monthly subscription fee. In contrast, an unmetered plan offers unlimited calls for a set price on the monthly subscription fee. 


SIP and VoIP use the internet to aid voice calls, but they are different technologies. SIP is a set of rules that governs the communication process, particularly in initiating and ending calls and other communications over the Internet while VoIP is any voice communication transmitted over the Internet using a variety of technologies and methods.


When you use VoIP for making phone calls, it often utilizes the SIP protocol to facilitate these calls. VoIP is a broad category of internet-based communication, including various functionalities like voice and video calls, messaging, and more. SIP is a part of this larger category, specifically used to manage the setup and termination of VoIP calls.


SIP trunking emerges as an advanced communication solution in the modern business world. It offers more efficient, agile, and flexible business communication solutions. Calilio offers a SIP-powered VoIP phone system combining all management strengths of SIP trunk with the broader capabilities of Voice over Internet Protocol. It provides your business with a more comprehensive, unified communication system that caters to diverse business needs. Sign up today and transform your PBX into a cloud-based business phone system.

Frequently Asked Questions

What does SIP trunking do?

SIP trunking connect a company’s PBX system to the Internet and enables voice and other communication services online. It facilitates making and receiving calls online using Session Initiation Protocol (SIP).

Is SIP trunk a VoIP?

SIP trunk is a component of VoIP technology. It specifically refers to the use of SIP to manage and establish voice communication over an Internet Protocol (IP) network.

What is the difference between SIP trunk and SIP session?

A SIP trunk is a virtual connection for transmitting multiple SIP sessions, which can be calls or other communications. A SIP session refers to a single instance of communication, like a phone call, established using SIP.

What is the difference between IP trunking and SIP trunking?

IP trunking is a broad term for trunking techniques over an IP network, while SIP trunking specifically uses the SIP protocol for managing voice and other types of communication over an IP network.

What is the difference between SIP trunk and hosted VoIP?

SIP trunking refers to using SIP protocol for voice communication over the Internet, usually with an on-premise PBX. Hosted VoIP is a broader service where the entire phone system, including the PBX, is hosted and managed by a third-party provider over the cloud. While SIP trunking is a specific technology used within VoIP systems, hosted VoIP encompasses the complete management and hosting of a business's phone system over the Internet.

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