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November 8, 2023

SIP Trunking vs. Hosted VoIP: Understanding the Key Differences



If you’re looking to revamp your business communications for greater efficiency and productivity, and you’d like to be able to adopt newer technologies for your customers, like intelligent call routing and automated attendants, you may be considering SIP Trunking or Hosted VoIP systems for your organization. But what are they, how do they differ and which is best for your business? 

In this article, we examine what SIP Trunking and Hosted VoIP are, how they work, and how to determine if either (or both) are right for your company.  

What is SIP Trunking and how does it work?

Session Initiation Protocol (SIP) is an application protocol that enables an internet-based phone system without the use of phone lines. SIP trunking is the backbone that connects multiple users to the network.  

Using SIP Trunking, your phone system can establish a call, maintain a connection to transmit voice and data, and then close the connection when the call has ended. SIP trunking is a system of virtual phone lines that lets you make internet phone calls that can include voice, fax, messaging services and video. 

What is Hosted VoIP and how does it work?

Hosted Voice over Internet Protocol (VoIP) is a way to make a phone call using an internet connection. A VoIP network uses packet switching, which converts audio to data packets, transmits them over a digital network and then converts them back to audio.  

How are SIP Trunking and Hosted VoIP different?

Hosted VoIP allows voice communications and inbound fax, while SIP trunking supports voice, inbound fax, messaging, and video. The SIP protocol establishes, maintains and disconnects VoIP calls, but SIP trunking goes further, allowing flexibility and integration with advanced technologies. 

What are the benefits of SIP Trunking and Hosted VoIP?

SIP trunking and Hosted VoIP offer cost savings from physical phone lines, call quality, reliability, flexibility, scalability, security, a centrally managed phone system and the ability to perform real-time analytics for business intelligence and insight.  

Why is Hosted VoIP and SIP Trunking Popular Among Businesses?

You’ve probably heard a lot about businesses moving to Hosted VoIP systems—and, increasingly, SIP trunking. This is because there is an enormous broadband internet infrastructure with which to enable this technology—and because it’s just a matter of time before the Public Switched Telephone Network (PSTN) is phased out. 

PSTN is the telephone network that uses physical phone lines to connect calls. Many countries around the world have decided to decommission their PSTN systems by 2030, and some have already started. What this will mean is that landline telephones will eventually go out of service. This reality has prompted businesses that are still dependent on landlines to look for other communication solutions. The traditional phone system, also known as Plain Old Telephone Service (POTS), is just as it sounds—good for making and receiving voice calls, but nothing else. Unlike SIP trunking, it doesn’t support features that are considered essential in today’s business world, such as intelligent call routing, video conference calls, call recording and data analytics. 

How can SIP Trunking and Hosted VoIP be used in business?

Hosted VoIP can be used to contact customers and employees, to track customer communications, and for analytics and reporting. SIP trunking can be used for internal messaging and video conferencing, chat applications and a call center.  

What are some common use cases for SIP Trunking and Hosted VoIP? 

Use cases for these technologies include: 

  • Automatic attendant – greets and routes callers to the right place 

  • Voicemail to email – access your calls from anywhere 

  • Call manager – forwards calls to optimize the system for you and your customers 

Additional use cases for SIP trunking include video conference calls with screen-sharing capability for company meetings and client presentations, team collaboration applications that can be accessed anywhere, and sophisticated call analytics. With real-time data, businesses can learn how efficient their communications system is and make fast adjustments. 

How do I choose between SIP Trunking and Hosted VoIP for my organization?

Hosted VoIP is for companies that want features like voice and fax to email, auto attendant and call management without a large upfront capital investment. SIP trunking is for larger enterprises with an IP PBX or PBX system, heavy call volumes, or multiple locations. 

Digging deeper into Hosted VoIP and SIP Trunking

By now, you should have an idea of which service is best for your business, but here is some additional information about the two types of VoIP, benefits of Hosted VoIP and SIP trunking systems and features you should look for when comparing Hosted VoIP and SIP trunk providers. 

The benefits of Hosted VoIP and SIP Trunking

If you’re considering the cost-effectiveness of switching your company’s telephone service, the benefits of Hosted VoIP include: 

  • Enhanced productivity for team members who frequently travel or who work remotely. 

  • The power to manage both internal and external business communications. 

  • The ability of small- to medium-sized businesses to compete with larger companies, with a highly efficient communications system. 

  • A large selection of calling features, from auto-attendant menus and conference calling to call transfer, forwarding and call hunt. 

  • The ease with which you can add or remove users. 

Benefits of SIP trunking include: 

  • Improved reliability over traditional phone lines. 

  • Enhanced call quality, due to the system ensuring that you have enough bandwidth capacity. 

  • Greater security since SIP providers monitor calls for any suspicious activity.  

  • Real-time call analytics to understand how your system is used. 

  • Centrally managed business communications, where all phone calls, messaging and video conferences are handled from a single platform. 

You can see the many benefits of choosing these advanced communication systems for your organization. 

Hosted VoIP features you should look for

Look for a provider that offers both basic and advanced plans with different agreement lengths, so that you don’t pay for more than you need but are able to choose a shorter-term plan if you think your company will experience significant growth within the next few years. Look for a robust portal that includes features like call, fax and voicemail management; a configurable auto-attendant; call hunting and visual voicemail. Above all, make sure that any Hosted VoIP is built on a reliable, powerful network. 

SIP Trunking features you should look for

If you’re considering different SIP trunking providers, make sure that the one you choose offers—in addition to the VoIP features—automatic failover routing for the trunk group, dynamic load balancing and sophisticated data analytics, so you can take full advantage of all that SIP trunking for large enterprises offers. 

Why Choose WOW! Business for SIP Trunking and Hosted VoIP?

WOW! Business offers reliable, scalable Hosted VoIP and SIP trunking services for your company’s communications needs. Both solutions provide the ability to personalize your phone system to cater to your customers and make your internal communications more productive.  

Our Hosted VoIP solution is installed on our own network, which guarantees crystal-clear connections. We provide you with regularly upgraded Poly™ phones, employee training and a powerful web-based CommPortal, letting you manage all your advanced calling features—up to 39 of them! This is all backed by our award-winning service and always-available tech support. 

WOW! SIP Trunking lets you optimize your organization’s IP PBX system by taking advantage of full customization and our secure network. Transmit text and video along with voice. We offer simplified pricing plans and predictable costs, and our SIP trunking service seamlessly integrates with your current infrastructure. This service supports phones across multiple sites while delivering optimal bandwidth and many advanced features, including custom call flow, on-the-fly call routing and a robust portal for optimal flexibility and control of your services. 

Our state-of-the-art network delivers secure, reliable connectivity, with 24/7 monitoring and management for your peace of mind so you can focus on your business. This includes enhanced 911 services and automatic rerouting in the event of a power outage or any issue with your IP PBX system—and you’re in control, through the WOW! portal. 

To learn more about our Hosted VoIP and SIP Trunking options and pricing, speak to an expert at WOW! today!