21 September 2017

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SIP Trunk Pricing: Understanding Cost and How to Get the Most Value

Business Phone Service by Tom Collins

Session Initiation Protocol, or SIP, Trunking, is a set of technologies that allow organizations to adopt cloud-based phones, unlocking numerous business benefits. Making the switch to SIP allows organizations to achieve many SIP benefits, including:

  • Lower costs,
  • Better security,
  • Flexible bandwidth allocation,
  • Enhanced service management,
  • Quality voice services, and
  • Potential for sophisticated interconnection.

Voice-over-IP phone service via a SIP provider isn’t just significantly less expensive than traditional public-switched telephone network (PSTN) service. It also carries the benefit of simpler billing. With SIP Trunking, your organization can generally expect to pay a predictable amount that’s largely calculated and billed by the total number of phone lines (or call instances) you use on a monthly basis.

Many organizations understand that SIP is cheaper, but demystifying pricing is rarely simple.

In this article, we'll break down SIP Trunk Pricing so you can get a better understanding of what you should expect to pay for, and what you will actually get.

How Much Does SIP Trunking Cost?

The cost of SIP Trunking depends on several factors, which primarily include your vendor, equipment, implementation fees, and the ongoing monthly service fee you pay to your vendor. In general, industry studies reveal that the average firm saves between 25-60 percent over phone service through a traditional telecommunications vendor by switching to SIP. Organizations with a high volume of long distance or international calls often have the potential for the highest percentage of costs saved.

Beginning to research pricing does little to explain SIP costs. Vendors with pricing listed often put their monthly per-line fees at anywhere between $20 and $70 per user. It’s important to understand that the lower-cost fees may not be for business-class VoIP service. In addition, this monthly pricing does not include the upfront costs associated with SIP setup. To help you develop an understanding of the full cost of switching to SIP, we’ve included a detailed pricing overview below. Not all of the factors detailed below will apply to every organization, but all can have an impact on the final price you pay for setup and ongoing monthly service.

1. SIP Setup Fees

Many business-class SIP Trunking vendors charge a fee for initiating SIP service. Others offer free setup, but may charge a higher monthly rate. The setup fee generally covers the cost of consultation, implementation, and quality testing. This can range from approximately $50 to $250, though enterprise firms with complex needs may anticipate higher fees.

2. New Phone Lines

If your organization is using the transition to SIP as an opportunity to expand to more phone lines and provide direct inward dial (DID) numbers for additional users, there is a fee associated with this. The one-time setup fee for each new DID is generally nominal, and no more than $10-25 per line.

Your organization is not required to purchase DIDs, and may not need DID for each phone user. Some employees may only need extensions, as opposed to numbers that are directly callable from an outside number.

3. Number Porting Fees

Your business has a legal right to keep your number. Per the Federal Communication Commission guidelines, your organization has a right to port over numbers and retain the same contact information if you are switching to SIP Trunking or changing business telecommunications providers, unless you are also moving geographic locations.

Porting is among the most time-consuming parts of the SIP Trunking implementation process. For large organizations, like Montgomery College, it may be a multi-day process that involves several batches of porting and quality assurance testing post-ports. While SIP Trunking vendor pricing structures can vary, your organization can expect a fee of approximately $15-30 for each number ported.

For a detailed overview of the porting process and what to expect, we recommend Number Porting to a New VoIP Phone System: What You Need to Know

4. Handsets

Each SIP Trunking user will require an IP-compatible handset. The costs of this equipment investment will vary drastically, depending on whether you select a generic phone with basic features, or a top-of-the-line brand designed for sophisticated conference room use. Name brand technologies are more expensive than generic models, and advanced features also increase the cost of the phone model. Your organization will need to evaluate whether your users need some or all of the following features when selecting the right handsets:

  • 3-Way Calling
  • Intercom
  • Automatic Callback
  • Call Transfer
  • Call Forwarding
  • Call Hold
  • Speed Dial
  • Call Waiting
  • Inside/Outside Ringing

Depending on the brands and features, your organization can expect to pay between $200 and $1000 per handset.

More details on selecting the right handsets for your users can be found in How Much Does a Phone System Cost for Small Business?

5. PBX Configuration

Organizations with existing, legacy private branch exchange (PBX) technology that has not been previously used for IP telephony may need to acquire a VoIP gateway in order to take advantage of SIP trunking with the vendor. The gateway or Integrated Access Device (IAD) connects to the PBX and enables you to unlock some of the benefits of IP-based telephony.

While costs of this gateway can vary significantly, your organization can expect to pay between $500-$2000 for this equipment investment. Organizations without a legacy PBX may not have to purchase a gateway to deploy cloud-based, IP phone service.

6. Monthly Service Fees

Generally, after the costs of initial investment, your organization will pay an ongoing monthly fee to your SIP Trunking provider. This is generally a flat fee that is billed per user, and includes a limited number of services such as e911, internal call transferring. The cost of monthly service generally ranges between $20-50.

Organizations adopting SIP Trunking for the first time should perform some research to understand the difference between business class SIP and IP phone service designed for home users and SOHO users. Truly business-class providers offer heightened attention to quality, reliability, and security to ensure your business experiences world-class IP-based communications.

More details on the differences between types of phone service and how vendor quality can affect your experience are included in Decoding Business Class Cloud-Based Phone Service (Benefits vs. Cost)

7. Add-On Features

Generally, the monthly service fee associated with SIP Trunking includes the ability to place and receive both local and long-distance phone calls. However, many organizations find they’re able to save significant money on their telecommunications by bundling add-on features for internal and external communications. Choosing optional add-ons can increase the monthly fee paid per user for one or more of the following features:

  • Conferencing
  • Mobility
  • Call center
  • Interactive Voice Response (IVR)
  • Enhanced 911 services
  • Integration with CRM, ERP or other internal systems
  • International Calling

8. Internet Connectivity

Calls routed through your SIP Trunking provider require Internet bandwidth. Depending on your organization, an effective adoption of SIP technology may require expanding your bandwidth or upgrading to fiber-optic internet connectivity.

Bandwidth calculations are complex, and a business-class SIP Trunking provider should be able to help you assess your needs for data against the guarantees and bandwidth you currently have allotted for your organization. This calculation is based on the number of calls your organization places during periods of peak demand.

While a first-time fiber-optic internet installation requires some initial investment, many firms find that the reliability gains pay dividends over time. Bundling your SIP Trunking and Internet through a single vendor can also lead to cost savings over time, and in the event of a problem, make troubleshooting much easier.

Dig deeper into the details of installing fiber in Getting High-Speed Fiber Internet Connectivity for Businesses in Rockville, MD.

SIP Trunking Costs: Choosing the Highest Value SIP Vendor

While organizations can vary drastically, a company that has never used any form of IP-based telephony before with 5 users can expect to pay approximately $2,000-$5,000 for a first-time implementation and approximately $150 - $400 in monthly costs. However, it’s important to note these figures are based on some serious assumptions, and no two companies are the same. Your organization’s cost for implementation and ongoing monthly fees can vary drastically depending on the types of equipment you purchase to switch to SIP, the types of phone handsets you need, and the add-on services you buy post-implementation.

While shopping by price is important, your organization should be wary of sacrificing the quality of your experience to go with a cut-rate SIP Trunking vendor who may not offer service-level guarantees or cuts other corners to offer the lowest prices possible. The right vendor for your organization is the one who fits your budget while still offering the quality and redundancy guarantees you need to communicate with your customers.

Ideally, your SIP Trunking vendor should be a long-term business partnership that helps your organization unlock the benefits of cloud communications and make the transition to unified communications as a service (UCaaS). By selecting a vendor with a strong record of successful implementations and quality and redundancy guarantees, you can ensure that you’re able to unlock quality and reliability in addition to significant cost savings.

Since 1995, Atlantech Online has been a leading resource for high-quality business communication technology and consulting for companies in Maryland, Washington DC, and the greater Mid-Atlantic region. With a range of services including differentiated SIP, fiber-optic Internet connectivity, and full unified communications as a service (UCaaS), Atlantech Online specializes in helping organizations find the right technology for their unique needs--whether that’s with us or a competitor.

For a no-pressure consultation and complimentary quote on SIP Trunking and VoIP phone system pricing, click here to contact us today.

Special Offer: Click Here To Download the Business Phone Service Buyer's Guide This guide explains how to find a provider to supply the features and service  you need without overpaying.  Click Here to Get Your Free Copy Now







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t-tom-collins

About the author:

Tom Collins (Twitter, LinkedIn) - is the Director of Enterprise Sales & Marketing for Atlantech Online. He has over 20 years of professional experience in the Internet Service Provider industry and is known for translating technology into positive results for business. A native of Washington, DC, a graduate from University of Maryland (degrees in Government & Politics and Secondary Education), Tom is also a five-time Ironman finisher.

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