SIP: How to save money on phone bills?

SIP: How to save money on phone bills?

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I get so excited about the technology, how to deploy it, what it looks like in a fail-over scenario, etc.  I often forget to talk about how to use SIP to save money on phone bills.    Cost-savings related to SIP is the number one reason why our ShoreTel and Allworx business is flourishing in this economy.  It is also the reason why my company is growing rapidly.   Once people can get their head around this concept – the light goes on!  SIP trunks can save a business 40% to 70% on their phone bills!  So without spewing out a brochure to you, I’ll talk to the real-world experiences we’ve come across and implemented and how to save money on phone bills.

Reduced facilities costs
With SIP, this is really the low-hanging fruit on how to save money on phone bills.  Because SIP providers provide dial tone services routed through a data connection (Internet Protocol) organizations no longer need to purchase outdated, costly T1 circuits, PRIs, or analog (POTS) lines.  These types of “legacy” connections are typically expensive for the local carrier to provide – and those costs get passed on to you in the form of loop costs ($30+ per analog line, $500+ for PRI circuits).  Because SIP is an IP-delivered resource – it can be delivered over a customer’s Internet connection – allowing the organization to significantly save money on phone bills.   We have customers connected to the ITSP (Internet Telephony Service Provider) – basically the SIP provider, through low-cost, high bandwidth connections (cable), T1 Internet, fiber, etc.  Without getting too detailed in this post, we’ve established a “best practices” approach to recommending the type of connection- considering things like Quality of Service, delay, bandwidth, etc.  Furthermore, an organization with multiple smaller offices can “port” their remote office phone numbers to their headquarters and route those calls back to IP phones at the branch.  This eliminates costly analog lines, gets local calling rates into those areas (this also addresses 911 calling), and allows them to significantly save money on phone bills.

Better utilization of bandwidth
A traditional PRI can accomodate 23 simultaneous conversations or talk-paths.  With many SIP providers, we can fit upwards of 50 talk-paths on one PRI’s-worth of bandwidth (1.544 MB).  We can also add one SIP trunk at a time, as opposed to having to purchase another PRI when we need more channels.  When SIP trunks are delivered over an Internet connection, that bandwidth can be used for Internet traffic when there is no voice traffic – a much better utilization of your bandwidth.  The combination of voice and data on one medium is another great example on how to save money on phone bills and Internet bills collectively.

Savings with inbound / outbound long distance
Depending on the type of SIP provider and your long distance usage, this can be a substantial way to save on phone bills.  Because the SIP provider leverages the existing IP networks to pass phone traffic, their costs are significantly less.  4 to 6 cents a minute for long distance is considered good with traditional long distance providers.  With SIP providers, you can enjoy domestic and International rates as low as 1 to 2 cents per minute.  You can also purchase SIP trunks that give you unlimited long distance.  Many of our customers who want to test the waters of SIP without fully committing will keep traditional services (PRI, analog) and “least-cost-route” their long distance over the SIP provider. When they feel confident with SIP, they can then port their numbers, cancel their traditional services, and save money on phone bills.

Market-Expansion Lines (MELS)
MELS have traditionally been used for companies who don’t have a physical presence in remote markets.  For example, a Chicago company wants a presence in Phoenix.  In the past, they might have to purchase a MEL, or a phone number in Phoenix that rings the phone system in Chicago.  The traditional phone company would charge the customer upwards of $40+ for that number as well as all long distance usage.  With SIP, our customers purchase a Phoenix phone number for $1 per month and pay no usage charges.  The reverse is true.  If a company calls into a specific area often, they can purchase a phone number in that area.  When calls are placed, the phone system sends the caller ID of that local area.  The SIP provider sees that caller ID and rates the call as local.  Brilliant!

How to save money on phone bills?  SIP trunks are the future.  See you later 30-year old, antiquated dial tone technology.