SIP Trunking vs. VoIP: The Future of Business Phones Explained

July 3, 2024 8 min read

Jeremiah Zerby

Jeremiah Zerby


Acronyms like SIP and VoIP can confuse everyone — from the average person gathering info on contact center solutions for their startup or small business to enterprises looking to revamp their telecommunications systems. Let’s keep it simple.

Our guide to SIP trunking vs. VoIP details the definitions, differences, and how they work so you can choose the right one for your business.

SIP Overview

SIP stands for Session Initiation Protocol.

It’s a method that computers use within VoIP applications to initiate how active devices at each endpoint connect, communicate, and disconnect multimedia communication sessions. SIP is used in voice (telephony), video, live chat and messaging, fax, and mobile phone calling over LTE.

A diagram shows the how VoIP and SIP Trunking works.

How SIP works 

SIP works behind the scenes to connect you with the person you’re calling, set the parameters for the call — like voice or video — and then disconnect the sessions when you finish.

Example of SIP in action:

Say a group of kids wants to play Fortnite together online. The group leader logs on and sends out invitations, and everyone who wants to play accepts the invite. 

SIP acts like the organizer, ensuring that everyone is connected, their game settings match, and the session starts smoothly. During the game, SIP keeps everything running without disconnects, and when you’re done, it helps end the session properly, making sure everyone logs out safely. SIP handles all the behind-the-scenes work so everyone can focus on having fun.

VoIP Overview

VoIP stands for Voice over Internet Protocol.

VoIP technology allows you to make phone calls using your internet connection instead of a traditional landline. It uses the internet to transmit your voice, providing high call quality and advanced features without needing physical phone lines.

A diagram showing how VoIP works

How VoIP works 

A VoIP system lets you make calls using the Internet rather than relying on a phone line. Just like sending emails, VoIP works by turning your voice into digital messages that travel online then converting them back to sound at the other end.

Example of VoIP in action:

Think of VoIP in the landscape of remote employees. Instead of collaborating via traditional phone, you can use an app on your computer to call each other, like Zoom.

VoIP does the work, transmitting your voices over the internet, allowing you to talk, share ideas, and collaborate in real time. When you’re done, you simply end the call in the app, making the whole process easy and efficient without needing a traditional phone line.

What Is SIP Trunking?

SIP trunking is like having a bunch of virtual phone lines that use the internet instead of physical wires. A SIP phone uses VoIP phone service to allow businesses to make and receive calls over the Internet using their existing PBX (Private Branch Exchange).

Simply put, SIP trunks bridge the gap between your VoIP phone system and a cloud-based phone service provider. The call flows through a SIP server and into a centralized service, such as an IP PBX.

How SIP trunking works 

SIP trunking works by using your internet connection instead of traditional phone lines to handle calls for your office. It connects your office phone system to the regular phone network through a SIP trunk provider, translating calls into digital data packets sent over the internet.

Components of the SIP Trunking system:

SIP channels: Digital phone lines that allow two simultaneous calls — one in, one out — and can be added easily without physical wiring.
SIP trunks: Multiple SIP lines grouped together that connect a company’s phone system with its internet telephony provider.
SIP protocol: a set of rules for starting and ending online voice, video, and messaging communication sessions over the internet.
SIP provider: SaaS vendor that offers services like voice calls, video conferencing, and messaging, as well as connecting company phone systems through SIP trunks over the internet, with options for both businesses with or without existing PBX systems.

Differences Between SIP Trunking and VoIP

VoIP is a ready-to-use service that includes apps, direct user dialing, messaging, and other features the service provider offers without needing technical configuration. It’s straightforward and user-friendly.

On the other hand, SIP trunking is like a wholesale version of VoIP. It provides the basic dial tone but requires technical configuration for each user and line. The user or company will manage the additional features like voicemail setup, not the provider.

Choosing VoIP vs. SIP trunking depends on your technical expertise and needs. SIP trunking is a good option if you’re comfortable managing your existing PBX system and want more control. VoIP is the better choice if you prefer a simpler setup without worrying about technical details. Nextiva offers solutions for both setups to cater to different preferences and requirements.

FeatureVoIPSIP Trunking
FunctionA complete solution for you and your team to communicate and place calls over the internetA digital connection between your PBX system and the phone network, providing PSTN access via the cloud. 
EquipmentSoftphone app, computer, or VoIP phoneExisting PBX system, SIP trunk provider
ProsEasy to set up User-friendly interface Includes features like messaging and video callsIntegrates with existing PBX system Offers more control and flexibility Often more cost-effective for high call volume
ConsReliant on the provider’s network and features Limited control over configurationRequires technical expertise for setup and maintenance Must have a PBX (on-prem or cloud) May require additional hardware or software licenses for features like voicemail
Monthly costApproximately $25–45 per user
Depends on plan features; often unlimited calling is included.
Approximately $15 per line (metered) or $25 per line unlimited.
Varies on usage and number of channels; unlimited calling is rare.
Best forBusinesses with basic calling needs who prefer a simple setup and have limited technical expertise.Businesses with existing PBX systems, high call volume, and a need for advanced features and control.

Why do companies need high-volume business voice services?

Several business practices require high-volume voice services. These include:

  • Autodialing, predictive dialing, or robo-dialing: These automated systems make many calls for tasks like appointment reminders or surveys.
  • Continuous, repetitive, or extensive call forwarding: Businesses with high call volume often rely on call forwarding to distribute calls across multiple lines or locations. SIP trunking can handle this efficiently.
  • Telemarketing: Telemarketing involves making a high volume of outgoing calls to generate leads or sales. Reliable and scalable voice services are crucial for such operations.
  • Government communications: State and local governments (like schools) often use SIP trunks to alert residents in a specific location about events such as snow days, weather notifications, or school closures. Additionally, these offices use VoIP for staff member communications for safe, secure, and auditable communications.

SIP Trunk Use Cases

SIP trunking offers a powerful and flexible solution for businesses looking to modernize their voice communication systems. Here are some key use cases for SIP trunking.

  • Brings cloud features to your existing PBX: If you have a functioning PBX system but want to add features like video conferencing or mobile extensions, SIP trunking lets you leverage the cloud for these features while keeping your existing phone system.
  • Replaces outdated phone lines: If you’re still relying on traditional phone lines like PRI or POTS lines, SIP trunks offer a cost-effective and future-proof way to retire these aging technologies and connect your PBX to the phone network using your internet connection.
  • Enables unified communications across locations: SIP trunking allows you to bring all your locations under a single, centralized telecom environment, simplifying call management, and offering a seamless experience for your employees and customers.
  • Adds PSTN connectivity to a cloud-hosted PBX: Businesses already using a cloud-hosted PBX — like 3CX or FreePBX — can use SIP trunking to connect your cloud PBX to the traditional phone network (PSTN).

How to Choose Between SIP Trunking vs. VoIP

Choosing SIP vs. VoIP depends on your specific business needs. Here are some key factors to consider.

A flowchart helps businesses visualize how to choose VoIP vs. SIP trunking.

Make the Clear Call with Nextiva SIP Trunking

Now that you know the difference between SIP trunking and VoIP, you may already know which is best for your business needs. With Nextiva’s Unified Communications as a Service (UCaaS), you get SIP trunking that brings your PBX to the cloud effortlessly without requiring new equipment. 

Our service provides scalable voice capabilities, reliable calling, and flexible SIP trunk pricing that saves on business voice expenses. With features like online management, fraud mitigation alerts, E911 support, automatic failover, and detailed call records, Nextiva ensures seamless deployment and a scalable solution to help you meet your business needs, now and in the future.

SIP trunking is a cinch with Nextiva. 

Get your business voice, messages, video meetings, and more integrated in ONE powerful cloud PBX.

SIP Trunking vs VoIP FAQs

For more information about SIP trunking vs. VoIP, check out these FAQs.

Are SIP and VoIP the same?

No, SIP and VoIP are not the same, although they work together. VoIP is the broader term, covering any phone call made over the internet. SIP works behind the scenes, setting up, managing, and ending those calls. Think of VoIP as the method of transportation using the internet and the SIP protocol as the business communication method that ensures a smooth journey.

What is the purpose of SIP in VoIP?

SIP is like the negotiator for your VoIP calls. It establishes the connection between your phone and the other party, determines the type of call (voice, video), and ensures clear communication. It also tears down the connection when you’re done. Your VoIP calls wouldn’t know how to connect or function properly without SIP.

When should I use VoIP vs. SIP Trunking?

A simple VoIP solution may suffice if you’re a startup looking for a small business phone system with basic voice call needs. However, SIP trunking is the way to go if you already have a PBX phone system and want to leverage it for cloud features like video conferencing. SIP trunking also offers more flexibility for high-call volume businesses.

Is SIP trunking secure? 

SIP trunking can be secure, but it’s important to take precautions. With TLS and SRTP encryption enabled on your trunk line, eavesdropping becomes much harder.

Additionally, using a strong password and restricting outgoing call patterns to authorized numbers can mitigate potential security risks. It’s also wise to discuss additional security measures, called “hardening” your SIP trunks, with your SIP trunking service provider.

Can VoIP work without SIP?

Basic VoIP calls can function without SIP, but it’s not ideal. Without SIP, features like video conferencing and call management become difficult. SIP calling is the backbone for a smooth and versatile VoIP experience.

Jeremiah Zerby


Jeremiah Zerby

Jeremiah Zerby is a marketing specialist at Nextiva. He spent three years on the front lines of technical support, troubleshooting internet and VoIP topics. He moved forward into the technical writing and content creation space. He’s helped set up hundreds of businesses and advised thousands of people with their cloud communications.

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