Session initiation protocol (SIP) and voice-over-internet protocol (VoIP) are great communication solutions, as they increase portability, integrate advanced features, and lower expenses. SIP handles multimedia data packets for voice, video, and messaging. VoIP is a phone system enabling voice calls over the internet. When comparing SIP vs VoIP phone systems, both are internet-based but very distinct.
Knowing the nuances lets you choose the best option for your business. Read our SIP vs VoIP guide for more information on each protocol’s pros and cons and how they work.
- SIP: Better for businesses with an existing IP private branch exchange (PBX) system needing multimedia communication support
- VoIP: Better for companies without an IP PBX system looking for voice-only internet-based solutions
When comparing SIP vs VoIP, factor in your business operations and workflow, call volume, budget, available resources, and existing equipment. The cost advantage would vary for each business.
SIP vs VoIP at a Glance
Monthly Starting Price
$10 to $30 per user
$10 to $40 per user
Ease of Setup
Requires some IT knowledge or experience
Requires some IT knowledge or experience
No experience required
The Difference Between SIP vs VoIP
One frequently hears about SIP trunking and VoIP as more businesses explore using the internet for small business telephony services. VoIP refers to a family of technologies allowing voice signals to be sent over the internet. SIP is a protocol used within VoIP technology for transferring and managing multimedia communications through your internet subscription. However, it’s important to note that not all VoIP systems use SIP protocols.
The difference between SIP trunking vs VoIP lies in its use—SIP falls under the VoIP umbrella. VoIP uses SIP to deliver other communication mediums, such as instant messaging, video calls, and more.
How SIPs Work
Now that we can differentiate between VoIP vs SIP, let’s focus on how SIP works. SIP is a signaling protocol for sending and receiving communications over the internet through PBX equipment. It uses VoIP technology to connect on-premise phone systems to the public switched telephone network (PSTN). It initiates communication between two endpoints and enables video, messaging, voice calls, and fax communications.
SIP trunks connect your current IP-enabled PBX or media gateway to the internet. The PBX system handles the routing of calls, while the SIP trunk connects the PBX to the internet through VoIP. To use a SIP trunk, you’ll need to work with a SIP trunk provider, which provides the software and hardware to connect the PBX system to the internet. Once the trunk is established, you can begin making and receiving calls over the internet.
SIP providers often charge a monthly service fee based on the number of channels and concurrent calls your business needs. It’s a cost-effective solution for businesses with a high volume of calls. It bridges the gap between local IP-PBX calling and non-local PSTN calling.
Pros & Cons of SIP
|Customizable with a scalable pricing structure
|Requires IT or PBX experts for on-premise management and troubleshooting
|Accommodates multiple users
|Trickier setup process than VoIP
|Multiple communication channels like voice, video, and SMS texting
|Outdated or older devices may have compatibility issues with SIP trunks
How VoIP Works
VoIP lets users place calls over the internet through “packet switching,” a method that converts voice signals into data packets. Packets are sent through the internet via a router. Codecs convert the voice signals into data packets, which are decoded and decompressed back into audio signals for the recipient to hear.
VoIP allows calls to be made over the internet, bypassing traditional landlines, which use PSTN to make calls over wired landlines. It differs from earlier landline technology, which used copper wires, by using the internet to make calls.
Pros & Cons of VoIP
|Low initial investment cost
|Network and connectivity dependency
|Highly scalable with advanced features
|Voice-only service lacking multimedia communications support
|Improves mobility and phone functionality
|Emergency calling limitations
When to Use SIP
SIP technology is used to communicate over the internet using different devices like computers and mobile phones. It’s a game-changer for teams with on-premise PBX phone systems needing communication functionality without investing in new hardware. SIP trunking upgrades your dial tone system with cloud features, such as custom caller ID and virtual conferencing. Here are some examples if you’re wondering when SIP trunking solutions are used.
Use SIP trunk connections for greater savings when making overseas calls. By connecting your existing PBX to the public network over the internet, you’ll be able to make calls at reduced rates. SIP bypasses your local phone company phone charges, and you’ll still pay fees because you’re using an internet connection. Still, rates are typically much lower than those of a local phone company.
One of SIP’s advantages lies in its flexibility. Businesses with seasonal or fluctuating call volumes use SIP and scale their phone systems up and down as needed. Users can add and remove SIP trunks to align with the changing requirements of its operation. Capitalize on this technology by enabling remote workers to connect with your communication system through an internet connection.
SIP’s capabilities extend beyond essential telephony tools. SIP phones are ideal for organizations with a large headcount thanks to their direct inward dialing (DID) feature. DID allows businesses to have multiple phone numbers. Best of all, each number rings a specific SIP phone and does not go through an auto-attendant or call queue tool. Businesses have one phone line—incoming calls are sent to your PBX through the SIP, connecting the caller to the specific recipient.
SIP trunk connections facilitate voice and video calls and messaging, which is ideal for companies looking for multiple communication channels besides standard phone solutions. Organizations communicating through different channels can use SIP trunks for more meaningful conversations and greater levels of user presence.
When to Use VoIP
Traditional telephony systems can no longer cater to business communication needs. With the unique requirements of remote working and expanded communication mediums, real-time collaboration, big data analytics, and mobility, teams require robust technology like VoIP. These best use cases give a better idea of VoIP’s business applications.
Use VoIP to ensure real-time and constant connectivity with remote workers. Employees gain geographic freedom by turning their office phones into IP phones as long as they are connected to the internet. VoIP technology lets teams make and receive phone calls from anywhere if they have the necessary software on the smartphone, computer, or tablet.
Individuals involved in professional services and small businesses use VoIP services to increase workflow and create cost-effective operations. VoIP reduces startup costs because it requires little to no equipment and hardware investments. Most of the time, you only need an internet-compatible device, a softphone, and an internet connection. Hosted VoIP services provide the tools solopreneurs and freelancers need to scale up their businesses.
Ecommerce is one of the industries that has benefited the most from VoIP phone systems. Integrating VoIP into your system enables you to tap advanced calling features like call recording for claim verification and auto-attendant for efficient call routing. The technology also integrates with customer relationship management (CRM), allowing agents to instantly extract data from your prospect and client database for invoicing, orders, and shipping.
Companies with complex call queueing and routing needs can use cloud-hosted VoIP solutions to direct inbound calls based on a set of rules. Many providers offer VoIP services with auto-attendant or interactive voice response (IVR) tools, making call management a breeze.
SIP & VoIP Providers
VoIP is the backbone of modern communication stacks, and adding VoIP and SIP trunks creates a scalable and customizable solution for your business. With several SIP and VoIP providers available, pay close attention to the pricing plans, included features, and the user-friendliness of their interface, as these vary significantly between different solutions. Here are some options for you to consider.
Frequently Asked Questions (FAQs)
PBX has been around for decades, first appearing around the 1970s. It’s still a popular technology, upgraded to work with VoIP. SIP and VoIP took off in the early 1990s with rapid internet adoption because of their affordability. Speak Freely was launched in 1991 as the first VoIP service and consumer-ready application. SIP was developed in the mid-1990s to improve IP-based communication interoperability, mobility, and multimedia support.
Experts estimate that users save a monthly average of $20 to $30 per user using VoIP instead of traditional analog phone systems. You can expect to spend less on installation, maintenance, and equipment fees.
Yes, most VoIP service providers offer free number porting. Before selecting a platform, ask the provider about using your current number on your VoIP phone.
After looking into SIP vs VoIP and what they bring to the table, we found that both protocols offer several competitive advantages for small businesses. SIP adds multimedia capabilities to improve the communication experience, while VoIP is a versatile and affordable alternative for voice communication. Traditional phone systems have pricey installation and maintenance costs, while VoIP and SIP trunking rely on existing internet infrastructure.
SIP and VoIP are the dynamic duo of business communications, and even though both protocols have their advantages, pairing them together gives you a powerful communications solution. When choosing a provider, opt for a platform offering both protocols. It’s not really a matter of VoIP vs SIP, but rather combining the protocols to gain a single unified communications (UC) platform with voice, video, and messaging services, simplifying communication and enhancing productivity.