What Is SIP Calling?

Phone Answering Services
What Is SIP Calling?
Article by Zarah Ariola
Last Updated: June 02, 2023

Internet-based solutions for voice and phone calls can significantly lower call costs for businesses. For instance, international calls can be reduced by up to 90% and local calls by up to 40%. Employees also report benefits, with 67% stating that internet-based systems like SIP calling improve their call handling, while 57% find it helpful for remote work.

This article will explore what SIP calling is, its advantages and disadvantages, and the types of businesses that can benefit from it. Although SIP calling is especially useful for answering services, it's not restricted to this industry alone, as you are soon to discover!

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What Is SIP Calling?

SIP (Session Initiation Protocol) calling is a process in which two systems exchange information (most commonly voice calls, phone and video conversations) over an internet connection or any other valid network.

It transmits voice calls over an SIP channel and uses voice over internet protocol (VoIP) to move analog call traffic via internet connection. SIP makes quick, secure and affordable internet calling possible via desktop devices as well as iOS and Android smartphones.

How Does SIP Calling Work?

SIP calls act like a go-between that connects two parties that may be located anywhere in the world —and that also means connecting your business with any potential client anywhere in the world.

A traditional (analog) phone system consists of three main parts that together provide connection:

  • Private Brand Exchange (PBX): On-premises system (made of PBX boxes and central servers) that the phone hardware connects to in order to manage a phone call.
  • Primary Rate Interface (PRI): Physical cable lines that connect on-site PBX to the external PSTN (the actual connection between a home/office and the rest of the world).
  • Public Switched Telephone Network (PSTN): Public and external telephone network that reroutes calls to recipients.

Installing SIP as an upgrade to the current phone system eliminates the need for PRI lines. An SIP trunk, which is a phone line that uses SIP protocol, is installed virtually over the internet connection to link PBX to PSTN directly.

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Three Components of SIP Calling

SIP calling uses internet protocol that initiates and stops SIP sessions as well as two more baseline technologies. The only hardware required for those that are installing a new SIP system are the handsets for conducting the calls.

SIP Address

SIP calling lets information travel from one point to the other and therefore requires an endpoint or a SIP address that is the destination of a message.

SIP address or SIP number links to a computer or a specific individual’s connectivity system that manages calls. After the call is established, the protocol lets the caller know if the recipient has entered the connection and ends the call by cutting off the connection to the SIP address.

SIP Codec

SIP packets are transmitted over the internet as audio signals. In order to do so, they must be coded with SIP codecs.

The most commonly used SIP codecs are G.711 and G.729.

G.711 is used for digital voice data. The lack of compression makes it a better option than other codec options in terms of the quality — however, it does take up a lot of bandwidth.

G.729 is used for voice data compression. The quality may be lacking, but it doesn’t require as much bandwidth.

SIP Protocol

SIP protocol runs a series of checks during the call — it confirms that the call recipient is in an accessible location that has network coverage, that they can respond and that their device is compatible with the type of incoming call. It starts and ends the connection when the caller or a recipient hangs up.

Two types of SIP protocols send encoded data from the previous step — RTP and RTCP.

RTP protocol is the real-time transit protocol that sends information through an audio and video-friendly application layer. It makes calling and video conferencing crisp and clear.

RTCP is the transport extension of the RTP protocol that provides information about the data packets that RTP sends. It functions as a quality-of-service feedback technology during SIP calls.

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Most Common SIP Calling Terms

The three most common terms that make up the SIP calling process are “initiation,” “session” and “protocol.”

  • Initiation: This term signifies the beginning and maintenance of a calling session. It is related to the SIP’s ability to open and terminate connections.
  • Session: Refers to a time period during which devices (belonging to a caller and a recipient) exchange information.
  • Protocol: A computing term that signals a set of rules that control the integration between two systems or devices. Protocols create a predefined communication structure of an SIP call and make sure the two devices “speak” the same coded language.

5 Advantages of SIP Calling

SIP calls come with numerous advantages over traditional phone calls. Here are the five most significant and impactful ones.


SIP calling can reduce your business phone bills significantly. The massive savings are a big incentive for companies to switch to SIP trunking.

SIP calling achieves these budget reductions in the following ways:

  • Unlimited toll-free calling instead of charging per minute
  • No multiple subscription fees
  • Elimination of expensive hardware and maintenance costs
  • All calls are turned into local calls
  • SIP phone systems have relatively low setup costs, which is another source of instant ROI.


Thanks to SIP trunking, phone calls, video conferencing and voice messaging happens over the internet. This effectively means that you don’t have to buy more equipment and additional phone lines in case your company requires greater calling capacities.


Because they create a unified virtual call center presence, SIP systems centralize and synchronize different communication channels, instead of constantly switching between them.

SIP phone systems perform numerous VoIP functions, like:

  • Identifying user location
  • Establishing user’s availability
  • Transferring and terminating calls
  • Enabling messaging, multimedia conferences and other enhanced user presence forms

Businesses that use unified communication channels such as SIP calling save up to 115 minutes a day per user. Combining all of the features above leads to greater productivity, efficiency and collaboration between teams, as well as eliminates the need for different devices.


For businesses that depend on the accessibility and reliability of communication channels, physical landlines can prove costly as they are prone to system failures, power outages and other mishaps.

SIP calling provides a way to receive calls even when these scenarios occur, thanks to automatic rerouting of calls to other locations, such as workers’ cell phones.

Also, SIP calling systems use wideband audio or HD voice to extend their frequency range and improve the telephone audio rate. This significantly improves the calls’ sound quality.

Better User Experience

Managing your SIP account from a simple, intuitive interface enhances usability and reduces the complexity of use to a minimum. The SIP provider sets up the system that you can use to manage your entire business phone infrastructure, call routing, extensions, new phone lines, etc.

This user-friendly way to have control over the company’s communication system consolidates all communication needs into one single device. You only need to train your staff in using one system instead of multiple, which significantly simplifies the process.

Finally, maintaining a SIP phone system requires less work. Tools that allow you to monitor and resolve potential issues are always at your disposal, as is the SIP provider’s support to quickly reroute services to avoid the negative effects of downtime.

SIP Disadvantages

While SIP calling has many benefits, there are also a few disadvantages to consider:

  1. Internet dependency: SIP calling relies on a stable internet connection to work properly. If the internet connection is slow or unreliable, the quality of the call can suffer, with issues like dropped calls, latency, and jitter.
  2. Security concerns: Since SIP is an open protocol, it can be vulnerable to security threats like hacking and eavesdropping. This makes it crucial for businesses to take steps to secure their SIP infrastructure, such as using encryption and implementing strong authentication mechanisms.
  3. Complexity: Setting up a SIP infrastructure can be more complex than traditional phone systems, requiring specialized knowledge and expertise to configure and maintain.
  4. Compatibility issues: SIP is a standardized protocol, but there are variations in how different vendors implement it. This can create compatibility issues when trying to connect different SIP systems together.

Which Businesses Can Benefit From SIP Calls?

Companies worldwide, of any size and from any sector or vertical, can benefit from SIP calling. Those with existing PBX systems on their premises can gain numerous advantages from taking their PBX system online.

Businesses that require faster, simpler and flexible video conferencing, voice calls and instant messaging should consider switching to SIP systems.

Although for large enterprises, switching to SIP may prove challenging in terms of number of employees, service disruption and high costs. But the longer they delay this transition, the more costly it can prove to them down the line.

You should consider using SIP calling if you have any of the following needs:

  • Collaborating via messaging, conference calls and video chats
  • Connecting with people inside or outside your company in an instant, no matter their location
  • Using a specific device to make calls
  • Integrating all communication channels into one
  • The trend of SIP calling adoption by small businesses and large enterprises has been here for years and it was driven by the service’s ability to connect with employees and customers across the globe, providing long-term savings, flexibility and scalability.

Final Thoughts on What Is SIP Calling

SIP calling significantly reduces the complexity of setting up expensive calling equipment — a cost that rises as your company expands and grows.

Instead, it uses VoIP-based technology to streamline and unify calling infrastructure, resulting in a well-balanced budget, improved employer satisfaction and quality of services.

Companies of all sizes and profiles — well beyond answering services and call centers — can benefit greatly from having SIP calling infrastructure implemented within their day-to-day operations.

Outsourcing the services of some of the answering services agencies and especially call center companies can help you tackle and conquer everything mentioned in this article.

SIP Calling FAQs

1. What is the difference between SIP and VoIP?

Here are the key differences between the two:

  • SIP is a signaling protocol, while VoIP is a communication protocol: SIP is used to set up, maintain, and terminate communication sessions between two or more devices, while VoIP is used to transmit voice and multimedia data over IP networks.
  • SIP is a more flexible and extensible protocol: SIP can be used to initiate and manage a wide range of communication sessions, including voice, video, and messaging, while VoIP is primarily used for voice communication.
  • SIP can be used with different communication protocols: SIP can work with a variety of communication protocols, including VoIP, to support different types of multimedia communication.
  • VoIP can be used without SIP: While SIP is a common protocol used with VoIP, it is not the only option. Other protocols, such as H.323, can also be used with VoIP.
  • VoIP is a more established technology: VoIP has been in use for longer than SIP and is more widely adopted, especially for voice communication.
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