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SIP vs. VoIP – Understanding the Differences

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SIP trunking and VoIP are two extremely popular choices of communication for businesses, however, it can be difficult to understand the differences between the two and which is the right choice for your company.

Our telecoms guide is a useful resource to start with, and below we go into detail about what exactly SIP and VoIP are, how they work and the main differences between them.  With over 40 years in telecoms, we’re in a position to provide you with the best solutions – just get in touch with your enquiry.


What is SIP?

SIP (Session Initiation Protocol) trunking is a method of communication that uses an Internet connection, to deliver voice rather than a traditional phone line. SIP allows users to communicate across the world using voice, data and video over a single connection.

It is a preferred method of communication by larger businesses as it is easily scalable and cost-effective. Delivering over SIP enables businesses to benefit from investment in large data connections as, using SIP, they also enable voice to be delivered over the internet (VoIP).


What is VoIP?

VoIP or Voice over Internet Protocol, is a term that refers to the transfer of voice communications over the Internet, rather than a traditional phone line. VoIP however, differently to SIP, is only able to initiate voice communications, not multimedia too.

VoIP tends to be used by small to medium-sized businesses, with a dedicated circuit for voice connectivity. VoIP is often used to support hosted telephony which is easy to budget for on a monthly basis at fixed costs over an agreed term.


Key differences

Whilst you may now understand what SIP and VoIP are, you may not know the exact differences between the two technologies. Below, we have put together some of the key differences, to help you understand which is the best option for your business.


How they work

Whilst they both use the internet to make phone calls, there is one main difference in the way that SIP trunks and VoIP work.

VoIP can only carry voice communications, so you can only make voice phone calls to other users, whereas SIP trunks can carry all forms of media, including video. This means you are able to have video calls with team members in other offices, or with clients.



There is one major difference in the costs associated with SIP trunks and VoIP that may impact your decision on which to choose.

VoIP tends to not have any upfront costs, whereas SIP trunking does have upfront costs associated with setting up the connection. For small businesses, these upfront costs may not be viable, so VoIP would be the best option.

Both options are cheap to upscale, adding extra bandwidth and SIP trunks being extremely cost-effective. VoIP is also great for budgeting, as each bill is the same each month, based on your initial connection choice with no surprise fees.



As stated above, upscaling is quick and easy on both options. Extra SIP trunks can be easily added or removed, depending on your staff levels. This means if a team member suddenly leaves or if you are experiencing rapid growth, you don’t need to worry about unused phone lines or waiting for new ones to be installed.


Who are they best for?

VoIP tends to be preferable to smaller and medium-sized businesses, this is because it can be supplied as part of a hosted telephony solution which offers predictable monthly billing that is easy to budget for with minimal upfront costs and easy scalibility.

SIP trunking is usually favoured by larger businesses, this is because it can easily deal with large communications, especially multimedia and can share the same connections as data traffic, with rules applied to ensure voice quality. Smaller companies tend not to prefer SIP trunks as they can be quite difficult to manage as they often do not have the IT departments and resources to manage the connections.


ISDN switch off

In 2025, the ISDN network is going to be switched off. This means that anyone on an existing ISDN network will need to find alternative communications, with SIP trunking and VoIP to support hosted solutions being the two main alternatives available to businesses.

Find out more about which option is best for your business after the ISDN switch off here.


Get in touch

If you would like to find out more about the best option for your business, or would like to discuss your requirements, give our team a call on 01256 391 046 and we would be happy to help you.