SIP Trunking Explained

This article is for buyers who have a need to understand the underlying technology so that they can do a proper technical evaluation of what they are buying.  In other words, it’s for nerds!

What is SIP Trunking?

SIP trunking is a phone service that provides a VoiP connection to a customer’s PBX for the purposes of making and receiving telephone calls over the Internet. SIP trunking replaces analog and PRI phone company lines.  It is typically much less expensive than traditional landlines and has more features.  In this blog, SIP Trunking Explained, we outline the components and services that go into creating a SIP trunk service.  This is not a do-it-yourself guide on how to become a SIP trunking provider, but rather the background of what goes into creating a SIP trunking service. 

The Elements of SIP Trunking


This is a central device in a telecommunications network which connects telephone calls from one phone line to another, across a legacy telecommunication network or the public Internet, entirely by means of software running on a general-purpose computer system.  Softswitch makers include Broadsoft, Digium, Metaswitch and NetSapiens.

Session Border Controller 

A session border controller is a device used in VoIP networks to exert control over the signaling and usually also the media streams involved in setting up, conducting, and tearing down calls. The SBC enforces security, quality of service and an admission control mechanism over the VoIP sessions.


Call origination, also known as voice origination, refers to the collecting of the calls initiated by a calling party on a telephone exchange of the PSTN, and handing off the calls to a VoIP endpoint or to another exchange or telephone company for completion to a called party.  Originating carriers provide the DID’s and toll free numbers for SIP trunking.

Call Termination

Call termination, or voice termination, is a telephony service of a telecommunication carrier who completes the telephone calls originated by a customer (the calling party), to the intended destination (the called party).

Termination & Origination Carriers

The largest VoiP carriers are Broadvox, 01 Communications, Earthlink, Windstream, Level 3, and BlueTone.  There are dozens of other carriers that provide termination and origination.  No carrier provides 100% coverage of the U.S. So even if someone tells you that they are a direct VoiP carrier, not all traffic will traverse their network.   Each carrier has its own pricing.  The prices are the least expensive in large cities and most expensive in sparsely populated rural areas.

International Calling

International phone traffic is handled by a separate set of providers.  Calling rates vary substantially by country.

Wholesale VoiP

SIP trunk providers purchase through the wholesale channel.  They typically contract with many carriers and choose providers based upon coverage, pricing and quality.  They then monitor the performance, statistics and costs for each carrier and modify their call routing to provide the highest quality calls.  Most wholesalers offer tiered pricing that the SIP trunk provider can choose from.  The best wholesalers provide custom-built “rate decks” that allow the SIP trunk provider to design their own network of carriers and automatically route calls based upon pre-set criteria.  

Lastly, the SIP trunk provider can actively manage their carriers so that if a specific carrier has quality issues, that carrier can be removed from the call routing table, either temporarily or permanently.


SIP trunking requires proper Internet bandwidth at the softswitch location and across the entire Internet network.  Quality providers have multiple ISP’s and use major internet backbone carriers.


Software is required to properly bill for all of the services provided.   The billing system must be able to invoice for NRC (non-recurring charges and MRC (monthly recurring charges).  NRC items include setup, products sold to the customer, and labor). MRC items include charges for call paths, minutes of usage, 411 service, etc.


Resiliency can be broken into three separate elements:

  • Hardware Redundancy: The softswitch, session border controller, routers and Ethernet switches can be redundant.
  • Geographic Resiliency: In this case, the SIP trunk provider has a redundant setup at an alternate physical facility. 
  • Provider Resiliency: This is the ultimate in resiliency, as the customer has two entirely separate SIP trunking carriers providing service. This type of resiliency can be set up in two common ways.  The secondary provider can be set up as the backup carrier.  Other times the customer prefers to split inbound and outbound traffic between the two providers.   Teledynamic is one of the few vendors who provide this level of resiliency.


Now that you know all that goes into being a SIP trunking provider, you are now an educated buyer. 

The Teledynamic Advantage 

Teledynamic Communications is the leading SIP trunking provider to businesses in the greater San Francisco Bay Area.  Contact us to learn how we can provide a more reliable and cost-effective solution to your business than the large national companies.

We offer business-class communication solutions with responsive local support

To learn more, call us today at (510) 785-2480