SIP Trunk Pricing Guide 2021: Rate Comparisons & Cost Reduction Tips

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There are few simple things in telecommunications, and SIP trunk pricing is no exception. But for telecom cost control, it's worth the research! SIP trunk rate and service cost optimization is the fast, effective way to save huge amounts of money on telecom services. Learn how to acquire reliable, high-quality SIP trunking at affordable prices with this informational article.

SIP Trunk Pricing Guide

For companies, controlling telecom costs can be a challenge. Voice network costs vary based on geographical location and provider. Telecom billing is seldom centralized among enterprises and midmarket companies, voice network costs are spread across many providers and geographies, and invoice charges are almost impossible to understand. Despite most voice services being commoditized, most enterprises still overspend by 30% or more!

Your top tool for controlling telecom costs is SIP trunking. No matter which type of PBX you use - virtual, traditional, or a hybrid - optimizing SIP trunks will give you the most significant reductions in your telecom costs.

Nevertheless, if you're looking for SIP trunk pricing for your needs, you've already discovered the first rule of telecom: it's never easy! Fortunately, we can help.

Providing you with the best SIP trunk prices for the services you require is our goal. As an open disclosure, AVOXI provides global SIP trunking services. While we take pride in our affordable, high-quality service, no SIP trunk carrier is perfect for every customer in every case. Our objective is to equip you with the knowledge you need in order to locate and negotiate affordable SIP trunk rates and reduce your telecom costs effectively, even if that means pointing you to a different service.

How Much Can SIP Trunking Cut Telecom Costs?

Considering the data, SIP trunks are critical to most enterprises and will continue to grow in importance in global communications. In addition to an increase in adoption rates and improved service reliability, companies with optimized SIP trunking cost structures and pricing details enjoy massive savings. Here are a few examples.

Using SIP Trunks to Control Telecom Costs

How much can SIP trunks actually reduce your telecom spending if they are so effective at optimizing telecom spend? Here are some numbers.

  • Over half of the 600+ companies surveyed by Nemertes had already adopted SIP trunking. The primary reason for adoption, according to 41% of those companies, was cost savings.
  • In the same study, SIP trunking reduced PSTN costs by an average of 16.1%. Moreover, unified communications costs dropped by 39% on average.
  • In a summary of several Nemertes Research studies, participants reported average telecom cost reductions of 20%-60%. One company's audio conferencing costs were reduced by 90% with SIP trunking!
  • A Gartner analysis concluded that SIP trunks save companies up to 50% in telecom costs and significant, albeit hard-to-measure, savings from simplified billing. Billing accounts for as much as 40% of telecom spend.
  • According to the same Gartner analysis, SIP trunking reduced per-minute rates by 25 percent on average. Gartner also found that competitive SIP call rates are falling on average by 5%-7% each year.
  • Tips for Telecom Cost Reduction

    When it comes to telecom cost control, there are two approaches. One is to upgrade your current environment. Simply replace everything in its current state. The cost savings can be dramatic, but this is a difficult route to go due to the level of risk and time and resources needed.

    Alternately, you can optimize your existing setup and carrier contracts. While companies can use both strategies simultaneously, those looking to control existing costs quickly and efficiently should focus on optimizing their current services and setup.

    The 4 Areas of Telecom Cost Control

    What are the best ways to optimize your existing phone system? There are 4 primary areas of cost-savings used by enterprises:

  • Compliance Monitoring: Invoice auditing for billing errors. It is also useful to check for discounts. Disputing unfamiliar fees and extra fees in general. Be sure your vendor's credits are being realized in your billing and any discounts are applied properly. Managing vendor credits is an ongoing process!
  • Demand Management: The optimization of internal policies related to service usage and device management to deter rogue spending (“Are we continuously aligning plan/service selection with actual usage?” and “What corporate policies are in place to regulate and normalize spending?”). It should be performed on a monthly basis. A quarter or every other month is a good starting point if that isn't feasible in your organization.
  • Carrier Contract Optimization: Negotiation of pricing/rates, discounts, credits and business terms. This is of particular importance for enterprises with multiple wholesale carrier partnerships. It is time to re-optimize your carrier agreements if you have not optimized them in the last 18 months, if you have grown significantly or if you have satisfied your minimum annual revenue commitment.
  • Subscription and Service Optimization: Selection of carrier and telecom solutions based on actual and forecasted usage. Cut or groom zero-use lines and services that have no forecasted demand. It's best to audit subscriptions monthly for most enterprises, rather than quarterly or semi-annually.
  • Compliance monitoring and demand management are the two most common cost-reduction techniques. According to Jeff Muscarella at NPI, these two categories yield average savings in the range of 3% to 10%. In comparison, optimization of contracts and service subscriptions yields 15% to 30% and 10% to 25% cost savings, respectively.

    Consider a contract optimization strategy right away, followed by service and subscription optimization as soon as possible. For most companies, this one-two combo results in a savings of 25% to 55%. Mid-market companies and enterprise companies save even more. In comparison with the others, these action items require less time and don't need to be completed as frequently.

    How SIP Trunk Billing Works

    Even though SIP trunking offers simplified billing over PRI and traditional setups, it's not free of complexity. Customers can be billed in various ways by SIP providers, especially for enterprise solutions. To make it easier for you to understand, we've included several enterprise SIP trunk billing examples below. Let's start by covering some key terms you will need to be familiar with in order to proceed with SIP negotiations.

    Concurrent Calling & SIP Channels

    Concurrent calling refers to the number of calls that can be connected to a single phone number simultaneously. For example, if an agent is speaking to one customer while two more are on hold, three concurrent calls are occurring.

    SIP channels, also known as SIP trunk lines, refer to the maximum number of concurrent calls a phone number can support. For every concurrent call, there must be a SIP channel. Concurrent call capacity associated with each country's phone numbers is displayed in the AVOXI cart; unlimited concurrent calling is included in most regions at no extra charge.

    Call Origination & Termination

    Call origination refers to the phone number from which the call is initiated. With SIP trunking, origination rates are the per-minute charges for incoming calls to your phone number. The rate of an inbound call depends on the country and type of number dialed.

    Call termination rates are per-minute charges for outbound calls made to a particular area code. Competitive termination rates range from 1¢ to 1.3¢ per-minute, or about $25 per line for unlimited SIP trunking. Wholesale termination rates range from 0.6¢ to 0.9¢ per-minute. Like origination, international termination rates vary widely between countries. A provider's complete global list of outbound call rates is known as their A-to-Z termination rates.

    Last but not least, calls made to mobile numbers are subject to switched termination. There are plenty of exceptions to this rule, but switched termination rates are often higher than landline rates.

    Enterprise SIP Trunking

    The larger an organization becomes, the more complex the obstacles in front of them. Enterprise SIP trunking takes this complexity into account. Enterprise SIP trunk plans are distinguished by Quality of Service (QoS) agreements, onboarding project management, and wholesale pricing.

    Quality of Service (QoS) agreements cover uptime, call quality, and more. They include dedicated project management, particularly when a system migration or custom integration is involved. There are also certain compliance and security standards that apply to enterprise SIP trunking, as well as wholesale pricing. Wholesale SIP trunk pricing is a benefit offered to enterprises with large call volumes (usage charges) or many users across multiple locations. Discounts of up to 30% may apply to wholesale SIP trunk rates, as well as other charges such as line rentals and removal of admin fees.

    Unlimited vs. Elastic SIP Trunk Pricing

    Elastic SIP trunking is pay-as-you-go SIP trunking, also known as metered billing. Elastic SIP trunk plans scale up and down with your use of the service, with no service auditing or manual changes to your plan required to enjoy maximum savings.

    Unmetered SIP trunking refers to a service plan that includes “unlimited” minutes. In telecom, "unlimited" is code for 3,000-3,600 minutes per user or channel.

    How Much Does SIP Trunking Cost?

    There is no need to complicate the pricing of SIP trunks. However, service requirements can vary widely between businesses. This means that charges can also vary widely.

    For this reason, many enterprise carriers like AT&T, Comcast, and Verizon do not publish their pricing. Providers want to be able to explain their solution, what they charge for, and avoid covering rates and charges for services or regions you don’t care about.

    The enterprise SIP trunk carriers also want to be able to negotiate your solution pricing with you if someone else makes a better offer. They don't want you to already know about pricing differences between themselves and competitors before they speak with you.

    In addition, international telecom prices fluctuate frequently. As a reference tool, use the following price benchmarks and rate comparisons when vetting potential providers.

    SIP Trunk Pricing

    While there is technically only “trunk” connecting each site to your carrier’s network, people often ask this in regards to SIP trunk lines, or SIP accounts. Retail SIP trunking usually costs between $15 - $25 per line, while enterprise SIP trunk pricing ranges from $12 - $40 per line on your bill. However, there are almost certainly several other charges per line, depending on what the provider charges add-on fees for.

    How about unlimited SIP trunking plans? You can find unlimited SIP trunk plans for $25 to $65 per trunk. Before purchasing, make sure to read fair use policies thoroughly. Be prepared for providers to show you "per day" pricing rather than monthly fees on some plans.

    SIP Channel Pricing

    Here are some examples where this may look very different. SIP.US charges $25 per channel, much more than AT&T. However, SIP.US channels are unlimited, which is telecom speak for “about 3,000 minutes or less.” So while AT&T’s SIP channel pricing looks much lower, call charges after the first 200 minutes per line quickly add up and can be more expensive than SIP.US’s unlimited option.

    To be fair, unlimited "channels" are a rather unusual billing practice. It's the same as charging $25 for an unlimited calling plan with only one simultaneous call.

    Cheap plug - AVOXI’s SIP trunking service does not charge per channel! All you have to do is pay for your phone number and your call charges. Unlimited call capacity is always included wherever it's available.

    Comcast SIP Trunk Pricing Example

    Comcast, for example, charged $30 per line for a plan with up to 14 concurrent calls, or $21 per line with up to 24 concurrent calls. Before per-minute billing kicks in, each line includes 200 minutes of talk time. Comcast SIP trunk lines with higher concurrent call limits cost less because they know customers using those lines are likely to have higher usage charges with their calling.

    Comcast charges for features that many providers include for free. The following add-on fees are in addition to the rental and usage charges:

  • Call forwarding: $1 per number
  • Bursting: $2 per session
  • Failover: $5 per trunk group
  • Load Balancing: $5 per trunk group
  • ANI/DNIS: $50 per trunk group
  • $500 one-time setup fee
  • AVOXI, on the other hand, does not charge for SIP trunk line rentals or additional channel capacity. All you pay is for the talk time and the phone number you use.

    See How Much SIP Trunking Can Cut Your Costs

    Interested in seeing how much you can save with AVOXI SIP trunking rates? We appreciate your interest! Talk to us today for our complete A-Z SIP termination and see our platform in action.