Analysts Frost & Sullivan in their survey “North American VoIP access and SIP trunking services market” forecast growth of 22.5 percent from 2012 to 2019 as SIP trunking becomes the standard for connectivity between VoIP premises systems and service providers’ networks. Revenue from SIP trunking was strongest in the small and medium business sector at more than 67 percent, with the remaining 33 percent coming from enterprise customers, according to the survey.
A 2013 study by research firm Infonetics Research – SIP Trunking and SBC Strategies: North American Enterprise Survey – found that deployment of SIP trunking was set to grow from 38 percent of companies surveyed in 2013 to 51 percent in 2015. The numbers using TI lines was expected to fall from 71 to 55 percent in the same period.
What’s driving SIP adoption?
A number of factors are driving SIP trunking adoption. It is seen as the standard interface to the PSTN for companies deploying on-premise VoIP and Unified Communication solutions and growing trust in the quality of SIP trunking is taking it into the mainstream. As more companies adopt technologies such as videoconferencing and other multimedia solutions, SIP trunking provides a cost-effective multi-channel circuit for communications.
However, long-term contracts that lock companies into legacy providers, as well as competition from hosted Unified Communications and hosted PBX services act as a restraint on further growth. To overcome competition from hosted solutions, Frost & Sullivan suggest that higher levels of customer education are needed.
Strong revenue opportunities
Wholesale SIP trunking providers can take advantage of strong market conditions to grow their business by offering customers the opportunity to open new revenue streams by cross-selling other products such as additional lines, calls, access, equipment, apps and professional services. Many providers offer wholesale customers attractive margins, with competitive call rates and flexible licenses, creating opportunities for a growing, profitable business.
Simple deployment
Providers make it easy for wholesale customers to deploy SIP trunking. Self-service facilities enable wholesale customers to set up services for their customers quickly and easily through a web-based portal. Wholesale customers can also scale the SIP trunking service in line with their own market needs by obtaining additional licenses. This enables wholesale customers to operate a flexible business model and take immediate advantage of new business opportunities.
Security and reliability
Research firm Software Advice in its study “Top Considerations for Selecting and Implementing a SIP Provider – UserView 2015” found that decision makers in both small and medium businesses and enterprises who responded to the survey put security, quality of support and pricing model as their top concerns.
To enable their customers to offer a reliable service, wholesale providers deliver SIP trunking over resilient, highly-secure next-generation networks backed by stringent Service Level Agreements. These digital networks provide higher levels of reliability than legacy circuits and they incorporate Quality of Service and failover options. Some providers offer an end-to-end digital solution that takes in the “last mile” which retains its legacy status on many networks.
To enhance security, providers incorporate Session Border Controllers, secure VoIP interconnects and separate network access routers to protect networks, privacy and data. The top providers run their connections over private Internet circuits to bypass any of the threats on the public Internet.
Attractive customer benefits
For wholesale customers, SIP trunking offers attractive benefits to their business customers. Software Advice found that lower total cost of ownership (TCO) was one of the main reasons for deploying SIP trunking.
This was backed by Gartner’s findings that TCO can be as much as 50 percent lower for businesses that replace legacy systems with SIP trunking. However, business customers can also benefit from access to cloud-based VoIP features such as call forwarding, recording and voicemail when they deploy SIP trunking.
Long-term business opportunities
Wholesale customers can offer SIP trunking as an important building block in the evolution form legacy systems to IP-based communications and Unified Communications. SIP trunking enables businesses to retain their PBXs and phones, while enjoying some of the benefits of cloud-based communications. Service providers can then upsell other services on the same SIP-based platform, giving them long-term revenue opportunities.
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