SIP trunking for toll bypass delivers great value, which has customers latching onto it like fly paper. Today 13% of businesses use SIP for 100% of their WAN traffic, and 42% of businesses will send all their toll traffic on SIP trunks by 2018, according to a new SIP study by The Eastern Management Group.
Researchers at Eastern Management examined SIP trunking through several lenses, including use of SIP trunking for toll bypass, and use of SIP trunking for Unified Communications applications. The project involved 17,000 IT managers across 22 vertical industries in seven world regions.
SIP, though nice for empowering applications like mobility, collaboration and so forth, does absolute wonders for gutting long distance phone bills, the research concluded. Customers of all sizes recognize this and are taking action.
While most enterprises have migrated less, at times much less, than 100% their toll traffic to SIP, the study found that the amount of calls going over SIP trunks is increasing steadily, with conversion rates varying by vertical industry, customer size and geography.
More than 80% of companies with 20,000 employees say SIP is very important to their business. This is also true of companies with 100-500 employees. And while the largest enterprises move one-fifth more of their WAN traffic using SIP trunks than do medium size establishments, in five years the difference will dwindle to just 4%. By 2018 the number of companies using SIP 100% of the time for toll bypass will have surged from today's 13% to 42%. That doesn't leave a lot of toll traffic left for the PSTN, and threatens telco services like ISDN PRI. The vertical market frontrunners in transitioning toll traffic to SIP are the banking, services, transportation, and technology sectors.
Doors to Toll Bypass via SIP Trunking Opened Long Ago
It helps (though it's not required) when a PBX supports SIP trunking for toll bypass. That bridge, however, has been crossed. Almost all new PBXs support SIP.
In our survey, most IT managers said economic considerations underpinned the latest PBX purchase. The combination of a PBX that facilitates SIP in addition to the low cost of SIP trunking creates an economic value that undermines the toll network's worth and life expectancy.
While many businesses use both SIP and the PSTN for phone calls, a shrinking number of companies may be able to defend hosting dual solutions at a time when SIP trunking is frequently viewed as offering superior quality to the PSTN. Running traffic on both channels erodes a PBX value proposition founded on economic merits.
Vendor Implications
Inertia alone will sustain the shift to SIP trunking toll bypass. The migration, however, has vendor implications.
Service providers face overwhelming PRI erosion. Things will move faster with better outcomes if telcos develop PRI wind-down strategies interlocked with business cases to exploit the market potential of SIP trunking and SIP-delivered UC applications over IP Centrex.
We see a substantial opportunity for new businesses to sell SIP trunking and leverage a customer base ready to convert. With so many end users in possession of SIP capable PBXs, the task is pretty straightforward.
The Eastern Management Group's SIP research study involved more than 17,000 IT managers. The global market and vendor analysis examines seven world regions, 22 vertical markets, and businesses from five employees to more than 20,000. A comprehensive report from the study entitled "SIP Market Size Analysis and Forecast 2013-2018" was published in September 2013. It is available from The Eastern Management Group.
The Eastern Management Group is a global research and consulting firm established in 1979. The company is based in New York.
The Eastern Management Group is a global research and consulting firm established in 1979. The company is based in New York.
