If years of telecom experience has taught me one thing, it’s that telephony is never as simple as you want it to be. Keeping telecom costs under control is notoriously difficult for companies. Voice network costs span multiple providers and geographies. For enterprises and midmarket companies, telecom billing is rarely centralized, voice network costs span multiple providers and geographies, and invoice charges are practically unintelligible. Even with commodified pricing for most voice services, most enterprises still overspend by 30% or more!
Enter SIP trunking, your top tool for telecom cost control. Whether you’re using a modern virtual PBX, a traditional PBX with analog phones, or a hybrid between the two, SIP trunk optimization is both the quickest and most effective path towards telecom cost reduction.
But if you’re searching for the best SIP trunk pricing for your needs, you’ve already discovered the first rule of telecom for yourself – it’s never simple! That’s where we come in.
We want you to find the best SIP trunk pricing for the services you need. Full disclosure up front, AVOXI provides SIP trunk services globally. And while we’re proud of the high-quality service we provide at affordable rates, no SIP trunk carrier is perfect for everyone in every scenario. Our goal is to equip you with the knowledge you need to find and negotiate affordable SIP trunk rates and reduce your telecom costs quickly, even if that means pointing you towards another service.
How Much Can SIP Trunking Cut Your Telecom Costs?
According to the data, SIP trunks are essential services for most enterprises and continue to play a bigger role in global communications. That’s not only true due to adoption rates and service reliability improvements, but also because of the massive savings enjoyed by companies that optimize their SIP trunking cost structures and pricing details. Let’s look at some examples.
SIP Trunks: Your Power Tool for Telecom Cost Control
If SIP trunks are so effective for optimizing telecom spend, how much can you actually expect SIP trunking to cut your costs? Let’s consult the data:
- Over half of the 600+ companies surveyed by Nemertes had already adopted SIP trunking. Of these, 41% said cost savings were their primary motivation for adoption.
- In the same survey, organizations using SIP trunking cut PSTN costs by 16.1% on average. More impressively, overall unified communications costs were cut by 39% on average.
- In a summary of several Nemertes Research studies, participants reported average telecom cost reductions ranging from 20%-60%. In one anecdote, SIP trunking reduced an enterprise’s audio conferencing costs by 90%!
- 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.
- In the same Gartner analysis, SIP trunking reduced per-minute rates by 25% on average. Gartner also reported that, on average, competitive SIP calling rates are dropping 5%-7% annually.
Tips for Efficient, Effective Telecom Cost Reduction
There are two angles of attack when it comes to telecom cost control. One course of action involves upgrading your existing environment. In other words, rip and replace everything. While the cost savings can be dramatic, this is a difficult route to go as the level of risk is high, as is the time and resources required to implement.
The alternative path is optimization of your existing setup and carrier contracts. While companies can use both strategies at once, enterprises trying to control existing costs as quickly and efficiently as possible should focus on optimizing their current services and setup.
The 4 Zones of Telecom Cost Control
How do you optimize your existing phone services? There are 4 primary zones of cost-savings used by enterprises:
- Compliance Monitoring: Invoice auditing for billing errors. Also valuable to check for application of discounts. Challenge unfamiliar fees and unnecessary admin fees in general. Make sure discounts are applied properly and any credits promised by your vendor are being realized in your billing. This is an ongoing management activity!
- 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?”). This should be performed monthly. If that’s not possible in your organization, every other month or quarterly is a solid starting place.
- Carrier Contract Optimization: Negotiation of pricing/rates, discounts, credits and business terms. This is especially important for enterprises with multiple wholesale carrier partnerships to manage. If you haven’t optimized your carrier agreements in the last 18 months, if you have grown significantly or if you have satisfied your minimal annual revenue commitment, it’s time to re-optimize your carrier agreements.
- Subscription and Service Optimization: Selection of carrier and telecom solutions based on actual and forecasted usage. Cut zero-use lines with no forecasted demand, and groom zero-use lines and services. While some organizations audit subscriptions on a quarterly or semi-annual basis, it’s best done monthly for most enterprises.
The two most common cost-reduction techniques fall under compliance monitoring and demand management. 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.
To quickly create serious savings in your business telecom costs, consider contract optimization right away, followed by a quick round of service and subscription optimization. When done correctly, this one-two combo generates 25% to 55% percent savings for most companies. Cost savings are even greater for enterprises and mid-market companies. These action items are less-time consuming and don’t need to be done as frequently compared to the others.
How SIP Trunk Billing Works
While one benefit SIP trunking offers over PRI and traditional setups is simplified billing, that doesn’t mean billing for SIP is free from complexity. SIP providers bill customers in a variety of ways, especially for enterprise solutions. To help wrap your head around it, we’ve included multiple enterprise SIP trunk billing examples below. But first, let’s cover some key terms you need to be familiar with to navigate SIP service 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 taking place.
SIP channels, also referred to as SIP trunk lines, refers to the maximum number of concurrent calls a phone number can support at once. Each concurrent call requires one SIP channel. Concurrent call capacity associated with each country’s phone numbers are displayed in the AVOXI cart; unlimited concurrent calling is included in most regions at no extra charge.
Call Origination & Termination
Call origination is the phone number where a call is initiated from. In pricing quotes for SIP trunking, origination rates are per-minute charges for incoming calls made to your phone numbers. Inbound calling rates are determined by the country and number type being 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.
Finally, calls made to mobile numbers are subject to switched termination. In many countries, switched termination rates are higher than landline rates, but there are plenty of exceptions to this rule.
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, especially when a system migration or custom integration is involved. Enterprise SIP trunking also implies certain compliance standards and security standards, 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. Wholesale SIP trunk rates may be discounted as much as 30% and can be extended to 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?
SIP trunk pricing does not need to be complicated. However, the variations in service requirements between companies are endless. Therefore, the variation of service charges can get complex as well.
That’s one reason why many enterprise carriers like AT&T, Comcast, & Verizon don’t publish their pricing openly. 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.
Enterprise SIP trunk carriers also want room to negotiate your solution pricing with you if someone else is making a stronger offer. Naturally, they don’t want you to already be familiar with pricing differences between themselves and competitors before they have a chance to speak with you.
On top of that, price fluctuations for international telecom are not unusual. Use the following price benchmarks and rate comparisons as a reference tool 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.
What about SIP trunk plans with unlimited calling? You can find unlimited SIP trunk plans ranging from $25 – $65 per trunk. Make sure you review fair use policies thoroughly before purchasing. Also be ready for some fancy footwork around pricing – for example, providers showing you “per day” pricing on certain plans rather than monthly fees.
SIP Channel Pricing
Let’s cover some examples where this may look very different. SIP.US charges $25 per channel, way more than AT&T charges per channel. 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.
In fairness, unlimited “channels” are an unusual billing practice, as it’s basically the same as charging $25 for an unlimited calling plan that only allows 1 concurrent call at a time.
Cheap plug – AVOXI’s SIP trunking service does not charge per channel! Simply pay for your phone number and your call charges. Unlimited call capacity is always included in regions where available.
Comcast SIP Trunk Pricing Example
In one example, Comcast charged $30 per line for a plan with up to 14 concurrent call sessions per line or $21 per line with up to 24 concurrent call sessions. Each line includes 200 minutes of talk time before per-minute billing kicks in. 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 automatically. In addition to the line rental and usage charges, add-on fees include:
- 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
In comparison, AVOXI does not charge for SIP trunk line rentals nor do we charge for additional channel capacity. Just pay for the phone number and talk time you use!
SIP Trunk Rate Comparison
Negotiating excellent pricing is easier when you have competitive benchmarks to compare rates with. Unfortunately, SIP calling rates, especially for outbound termination, vary widely by location. However, we can still provide examples of competitive call rates for you to use as a benchmark with any carrier you negotiate with. Here are benchmarks for AVOXI’s international rates compared with reported pricing for Comcast SIP trunking.
North America
| AVOXI | Comcast | |||||
|---|---|---|---|---|---|---|
| *US & Canada | 1.1¢/minute | 1.6¢ to 2¢/minute | ||||
| Alaska | 8¢/minute | 6¢/minute | ||||
| Hawaii | 1.9¢/minute | 2¢/minute | ||||
| *Mexico | 1¢/minute | 2.3¢/minute | ||||
| *Mexico Mobile | 5¢/minute | 27¢/minute | ||||
APAC
Per-Minute Termination / Switched Termination (Calls to Mobile)
| AVOXI | Comcast | |||||
|---|---|---|---|---|---|---|
| *Australia | 1.8¢ / 3.4¢ | 2.3¢ / 20.8¢ | ||||
| *China | 3¢ / 2.4¢ | 2.3¢ / 2.3¢ | ||||
| India | 3.2¢ / 3.2¢ | 9.2¢ / 9.2¢ | ||||
| *Hong Kong | 2.5¢ / 2.5¢ | 2.3¢ / 2.3¢ | ||||
| *Indonesia | 5¢ / 6.2¢ | 4.4¢ / 15.8¢ | ||||
| Korea, South | 1.4¢ / 1.7¢ | 2.3¢ / 7.5¢ | ||||
| *Malaysia | 2¢ / 2¢ | 1.7¢ / 1.7¢ | ||||
| New Zealand | 1.7¢ / 5¢ | 2.3¢ / 31¢ | ||||
| *Singapore | 1.8¢ / 1.8¢ | 2.3¢ / 2.3¢ | ||||
| *Thailand | 4.8¢ / 6¢ | 6.5¢ / 11.6¢ | ||||
*TrueLocal available. TrueLocal ensures local caller ID displays when dialing outbound internationally.
Sourced from: Avoxi. View the original article here.
