SIP trunking (Session Initiation Protocol) and PRIs (Primary Rate Interfaces) are both methods used to connect a Business phone system to the Public Switched Telephone Network (PSTN).
First a quick re-cap on this terminology. PRIs have been used by large businesses for many years as a means of connecting their internal PBX (Private Branch eXchange) to the PSTN. In the U.S the PRIs consist of 24 circuit switched digital channels running at 1.544Mb/s, often referred to as a T-1 line. In Europe it is referred to as an E-1 line which consists of 32 timeslots rather than 24 and a line rate of 2.048Mb/s. Each channel (or DS0) can carry a phone call (or indeed any data connection) though one (or two for Europe) of the channels is used for control only.
SIP Trunks on the other hand are packed based rather than circuit switched and designed to be sent over the Internet rather than to the PSTN. These packets will usually be sent to a service provider who has the responsibility of routing those packets to their destination across the Internet or to the PSTN or even to a cellular provider. The limit here in terms of number of calls that can be initiated is a function of the overall bandwidth available rather than the fixed number of timeslots.
To summarize, SIP is a packet based system geared completely towards communicating over the Internet and PRIs are circuit switched and used primarily to connect to the PSTN.
PRIs, because of the circuit switched nature, require physical terminations for each line and each timeslot channel. This can be expensive. SIP trunks are essentially virtual and as stated above the number of trunks is a function of the overall system bandwidth and for this reason less hardware is typically required for a packet based system.
T-1 lines give you 23 available channels for communication. If you have 23 today and then need one more typically you require another T-1 line and 23 channels. This becomes very expensive to scale due to the increments of 23 channels. SIP Trunks are packet based so scalability is easy, providing you have enough bandwidth in your system. One note to make here is regarding fractional T1 lines. This would allow you to scale in smaller increments with PRI but in reality the cost model for this rarely works out in your favor.
The actual hardware termination is more expensive with PRIs, as discussed above, and the cost of a T-1 line is significant - usually several hundred dollars per month. Scaling in increments of 23 channels makes PRIs a costly proposition. SIP Trunks on the other hand are essentially virtual channels and all you need is a reliable Internet connection with enough bandwidth for all your data needs. Note that this connection could actually be a T-1 (or T-3) line though this is usually an expensive option these days and better options are available to businesses.
SIP providers have highly competitive rates these days, often as low as $20 per trunk. The savings for a large business can end up running into several thousand dollars per month. Usually the larger business or enterprise will connect their internal PBX (usually an IP-PBX or a legacy PBX with a trunking gateway) to the Internet and the trunk provider will handle all traffic routing. Internal calls can be configured inside the IP-PBX so they are essentially free since they are routed across the internal network.
For smaller businesses (say 200 phone lines or less), a more cost effective option is usually a hosted VoIP PBX as all of the PBX functionality resides in the cloud and all the business needs is Internet and some phones. It is a simpler way to reduce your phone bills and no training or maintenance is required. The only disadvantage here is that all internal calls use up minutes as they have to be routed by the hosted provider even if it is your colleague in the next cubicle.
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Author: Mike Bragg