SIP Trunking Cost Savings Redux

David Byrd : Raven Call
David Byrd
David Byrd is the Founder and Chief Creative Officer for Raven Guru Marketing. Previously, he was the CMO and EVP of Sales for CloudRoute. Prior to CloudRoute, He was CMO at ANPI, CMO & EVP of Sales at Broadvox, VP of channels and Alliances for Telcordia and Director of eBusiness development with i2 Technologies.He has also held executive positions with Planet Hollywood Online, Hewlett-Packard, Tandem Computers, Sprint and Ericsson.
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SIP Trunking Cost Savings Redux

On Monday I discussed why it is difficult to tie a single cost savings number to transitioning your connectivity from dedicated PRIs to converged T1s or SIP Trunks. While most companies will see a savings, the amount is network dependent. However, there are identifiable savings components that can be easily quantified:
  • Per line cost
  • Usage cost for local inbound/outbound calling
  • Domestic long distance calling
  • International calling
  • Toll-free inbound calling


Per line cost can be reduced by 60-80%.  Most SMBs purchase some type of phone line that includes a local calling area and the basic cost for this type of business line starts at $29.99 per month for a TDM line that includes unlimited local calling. While plans vary between different VoIP/SIP Trunk providers, Broadvox sells this service for as low as $12.75 per line per month. That is a savings of 58% with the additional 2-5% savings as a result of lower taxes and fees.

Usage cost for local inbound/outbound calling or metered services is also a differentiator of offerings between SIP Trunking providers and ILECs and CLECs. Most ITSPs do not charge for outbound or inbound local calling. Therefore, savings can be up to 100% for this sometimes basic TDM charge.

Domestic long distance calling in the 48 contiguous United States and Canada is an often-stated major feature and the savings can be exceptional. An unlimited local and long distance calling package can be purchased from an ILEC for $55 per month with Canada extra. Depending upon the selected ITSP and term of the agreement the same plan including Canada was as low as $24.99 or a 55% savings with an additional country included.

International calling rates from the ILECs have improved but are very dependent upon the selected plan. And the cost savings varies by usage and the country called. However, using the UK and France as examples, a large ILEC will charge per minute rates of 11.8¢ and 24¢ respectively. For the same call Broadvox charges 0.5¢ and 1.9¢ per minute. This reduces the cost of calling by more than 90%.

Toll-free inbound calling plans for VoIP/SIP Trunk calling can be as low as 2¢ per minute, depending upon volume. The best domestic rate quoted on AT&T’s site was 5.9¢ per minute or 295% more.

Given all of the above, it is clear that a savings of 70% is achievable. In fact, an enterprise customer with dedicated PRIs, remote offices and the need to make international calls experienced a savings of 75% with us versus their incumbent carrier.

So, the savings are real but what of the voice quality? We’ll cover that on Friday.

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