Over half (52%) of companies report that phones are still their primary communication tool, and 63% expect their phone usage to increase over the next few years.1 But as more businesses move toward digital solutions, the shift from traditional phone systems to internet-based communication solutions has become inevitable.
SIP and VoIP often come up in the process of modernization efforts. While closely related, they’re not the same – and understanding how these technologies differ is essential for voice service providers to develop the right product offerings. In this guide, we'll break down the difference between SIP and VoIP and how ECG can help you determine which solutions to offer your customers.
VoIP, or Voice over Internet Protocol, is a technology that enables voice calls through internet connections rather than traditional, copper-based phone lines. Also referred to as "UC" or "unified communications,” VoIP changes voice signals into digital data that travels across IP networks, allowing businesses to make calls just as they would send other data across the internet.
Around 18% of businesses globally used VoIP/UC solutions in 2023,2 likely due to its greater affordability, flexibility, and ease of use. Instead of maintaining separate networks for voice and data, VoIP lets businesses use a single network for multiple communication services, ultimately reducing complexity and operational costs.
SIP, short for Session Initiation Protocol, is a communication protocol that establishes, maintains, and terminates multimedia sessions like voice and video conferencing. VoIP is the general technology for making calls and transmitting voice data, while SIP is the specific protocol used to initiate and manage the call itself.
SIP is often used as shorthand for "SIP trunking," but as a protocol, it is used for many other purposes. It offers a standardized method for connecting calls and managing their lifecycle. It supports voice calls, video, messaging, and other real-time communications, making it a crucial part of cloud-based telephony platforms.
SIP and VoIP may seem interchangeable at first glance, but they serve distinct roles. Here’s a quick breakdown:
VoIP is the technology that enables voice transmission over the internet, allowing users to make phone calls without needing copper analog or digital phone lines or infrastructure.
SIP is the protocol used to initiate and terminate VoIP calls. It establishes the connection, maintains it during the call, and disconnects it once the call ends. SIP trunking uses the SIP protocol to connect directly to a PBX or other device – often without replacing the PBX itself.
VoIP primarily focuses on voice communication, though modern VoIP systems often include additional capabilities like video calling.
SIP, on the other hand, falls under the hood of many everyday communications technologies. As a technology, it supports voice communication (like VoIP) plus video conferencing, instant messaging, and presence information.
Since VoIP represents the overall technology for voice transmission, costs are typically based on the number of lines, usage volume, and selected features. VoIP and UC pricing models usually include monthly subscription fees covering a specific number of users or lines.
SIP is the connection method, so costs are generally structured around the number of channels rather than individual users. SIP trunking often follows a pay-for-what-you-use model, allowing businesses to scale channels based on actual call volume.
There are several deployment options for VoIP or UC, including cloud-hosted services requiring minimal hardware or on-premises systems that need more extensive equipment investment.
SIP requires specific configuration and involves establishing connections between your client’s phone system and your network through proper networking protocols.
With SIP trunking, your clients connect their PBX or application to your network, and need to decide on details like transport protocol (UDP, TCP, or TLS), codecs for delivering the audio (G.711, G.729, or G.722 high definition), encryption for the audio (SRTP), number formatting (E.164 format "+12292442099" or simply national format "2292442099"), and other parameters. Because SIP is a basic protocol, it grants a lot of flexibility.
Another common point of confusion is the difference between SIP trunking and VoIP. Both are needed for modern telephony, but they play different roles within a communications system:
In short, VoIP is the technology, and SIP trunking is the method for businesses to integrate VoIP with their internal telephony systems.
SIP devices are hardware or software that use SIP to manage communication sessions. Common SIP devices include:
Businesses use SIP devices to leverage VoIP communications while maintaining flexibility and control. These devices serve as endpoints that encode and decode the voice data transmitted via VoIP technology, and organizations can mix and match different communication tools based on employee needs and work environments. For example, desk workers might use IP phones, remote staff could use softphones on laptops, and legacy systems can connect through SIP gateways.
Combining SIP and VoIP technologies delivers quite a few advantages for modern business communications, including:
For many customers in the USA, traditional copper-based analog or digital voice service is no longer affordable. SIP and VoIP technologies are a cost-effective alternative. In other areas, the legacy services continue to be available.
Growing businesses need a communications infrastructure that scales easily. SIP-based systems offer flexible solutions for adding users or features without major system overhauls, adapting to changing business requirements.
VoIP services can be significantly cheaper than traditional phone lines, with 50% of businesses that have switched reporting reduced telecom costs.3 Using a VoIP platform via SIP trunking is a cost-effective way for organizations to handle call volumes without investing in costly phone lines or hardware.
SIP supports multimedia sessions, making it easier for teams to communicate via voice, video, and messaging – all integrated into one platform. This leads to more efficient collaboration across departments and with clients.
Both SIP and VoIP platforms can be more reliable than traditional telephony systems, especially when paired with modern network setups. Plus, a properly configured communications infrastructure helps businesses ensure higher uptime and better service quality.
With companies adopting more cloud-based solutions, SIP and VoIP technologies allow for future-proofing. VoIP eliminates dependency on traditional copper-wire infrastructure, while SIP provides the framework for unified communications.
While SIP and VoIP can provide many advantages to your business customers, their effectiveness will largely depend on your underlying voice network infrastructure. Here are a few strategies to improve your network’s call quality:
VoIP quality is fundamentally determined by your network performance. Maintain high call quality by engineering sufficient backbone bandwidth, minimizing network latency, and controlling jitter across your infrastructure. Implement QoS policies that prioritize voice traffic across your entire network path.
When interconnecting with partner ISPs or transit providers, establish performance SLAs and regularly validate their network capabilities. If a particular interconnection point experiences congestion, reroute traffic through alternative paths to maintain call quality.
Deploy network-wide SIP monitoring solutions that provide real-time visibility into call quality metrics. These systems should collect data on MOS scores, packet loss, jitter, and latency across different network segments and customer groups. Make sure to implement automated threshold alerts to identify emerging issues before they affect customer experience.
Conduct systematic quality testing across your network using automated call generators and analyzers. These tests should simulate traffic under varying network conditions and from different locations in your service footprint.
First, you’ll need to establish baseline performance expectations for different network paths and monitor for deviations. If you detect quality issues, implement remediation processes with clear escalation procedures. Maintain communication channels where customers can report quality issues, and correlate these reports with your monitoring data to identify patterns requiring major network improvements.
Both SIP and VoIP offer many benefits to businesses looking to streamline their communication infrastructure. Understanding the difference between SIP and VoIP – and how each can work for your voice service customers’ specific needs – can help you develop competitive offerings.
If you're evaluating your service catalog strategy, ECG can help you determine whether to sell SIP trunking, VoIP solutions, or a combination of both. We’ve helped service providers and enterprises of all sizes develop robust VoIP and SIP services, so you can rest easy knowing we offer the engineering expertise and support you need to deliver scalable, reliable, and cost-effective solutions to your customers.
Book a consult today to get started.
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