At last there's something to smile about: SIP Trunking has come of age, is set to sweep the board, offering cost savings and flexibility to businesses of all sizes, and heralding a compelling proposition for comms resellers to take to their cost conscious customers.

Gamma' success with SIP in 2009 is a sign of the times. The company enjoyed an ‘excellent year' in the area of SIP Trunking and Hosted IP Telephony services, with strong general growth and some high profile customer successes. As for SIP Trunking in 2010, Gamma will be launching a combined Ethernet and SIP Trunking service allowing customers to compete with ISDN 30 services, providing high availability, high quality solutions to SMEs, mid-market customers and corporates. Comms dealers are well positioned to provide such SIP services to customers. They have the experience of selling, supporting and billing these services effectively. For the IP elements of the solution, providers such as Gamma can assist in providing end-to-end solutions that include the IP access network and SIP services, allowing the reseller to concentrate on selling and supporting the customer's business requirements.

"VoIP services enable comms dealers to secure customers on long-term contracts, the solution tied into the equipment provision, and porting of the customer's numbers allows resellers to build a three to five year contract with the customer, compared with the traditional voice solutions which can invariably be transitioned after 12 months," said Alan Mackie, Senior Product Manager at Gamma Telecom.

He noted that value added resellers are increasingly selling SIP Trunking solutions as part of an overall converged voice and data solution to their customers. "The ability to sell a voice solution alongside the data services offering enables VARs to secure customers on long-term, high margin contracts," he said. "Stats would show that if an end customer is taking three or more services from a solutions provider, customer retention is at approximately 92 per cent. For a traditional data services provider, adding SIP Trunking to the mix certainly makes sense."
All resellers and solutions providers can benefit from adding SIP trunking to their product portfolio. The number flexibility and business continuity elements inherent within a SIP service enables resellers to build unique solutions to the end customer. "These solutions offer far greater margin potential and contract length than selling commodity ISDN/PSTN and CPS services," added Mackie.

The roll out of IP connectivity suitable for voice services has advanced greatly in the past 12 months or so. Services such as Ethernet and Gamma Telecom's IP Assured services provide high quality services designed to support VoIP. "The general availability of affordable, high quality voice capable access services, in every area of the UK is still to be achieved, and it is key when selling VoIP services that the correct bandwidth solution is utilised," observed Mackie.

"The simple mantra in selling VoIP services is if the bandwidth is scaled correctly and of the required quality then a profitable solution can be achieved. If the wrong bandwidth is deployed, problems can occur."
Paul Cloudsdale, Technical Director at O-bit Telecom, says resellers shouldn't have any fears about offering VoIP or services over SIP anymore, as connectivity issues are no longer a big problem. "The quality of VoIP and SIP services has increased enormously over the last ten years. End user devices, networks and codecs are much more advanced, and it is now difficult for end users to notice that they are using VoIP," he said.

For those resellers who concentrate solely on traditional voice, there is a strong possibility that they will lose customers to other resellers and VARs who are offering SIP services, believes Cloudsdale. "By not offering these kinds of products, voice resellers lose out on the opportunity to offer services relying on the LAN infrastructure of a business," he warned. "Traditional voice system resellers sell equipment, and in the LAN environment there are even bigger opportunities to sell equipment, such as LAN switches, cabling, and firewalls. VARs are only a threat to traditional comms dealers if they don't learn to adapt to changing technology. Comms dealers will get left by the way side unless they adapt and update their product portfolio to reflect the new technologies available."

According to Cloudsdale, resellers are not afraid of SIP, they are unsure of its credibility. "There is still a lot of scepticism around the level of maturity of the technology, both of SIP and VoIP, and many dealers still don't believe that the technology can deliver everything that it promises," he said. "This is something that I can't stress enough: SIP and VoIP is reliant on the quality of the network. These services are only as good as the network providing them, and as a reseller you wouldn't be able to guarantee quality of service if you're offering these solutions over a home broadband connection. Bandwidth is key to proving VoIP and SIP services that customers will want to use."

The main reason businesses are moving into SIP is convergence and the cost savings it can bring. "With SIP, a common infrastructure, like a business broadband connection, can deliver multiple applications, including VoIP, videoconferencing, instant messaging and multimedia streaming. This provides cost savings as there is only one hardware platform to manage, rather than multiple platforms, like a phone and broadband connection for instance," noted Cloudsdale.

With VoIP and SIP, the recurring revenue is not generated through the rental of the equipment underpinning these services, regular income comes from the additional services being offered once the equipment has been put in place, such as high bandwidth broadband services or premium and non-geographic numbers. "For resellers to take full advantage of these kinds of opportunities they need to offer equipment and service bundles, so that once the equipment has been installed there is then guaranteed recurring revenue," added Cloudsdale. "Resellers shouldn't forget that SIP can be used to deliver a wide range of services, and not just VoIP. Thanks to this flexibility, SIP has a big future ahead of it, regardless of the services it is providing."

Voiceflex provisioned an early commercial SIP trunk in December 2005. During 2006-08 the firm carried out in-depth testing with telephony manufactures, and during this period the market was very much early adopter. During 2008 steady growth was achieved. "From mid-2009 we experienced a massive increase in business throughout all product ranges. So far in 2010 there's no let up in sales," said Paul Taylor, Managing Director. "Channel partners can earn more margin selling SIP trunks than they can form supplying ISDN channels. They also earn additional revenue from xDSL connections and supplementary services. The revenue for calls will remain about the same. The key is the additional applications SIP supports, not all SIP carriers offer the same feature sets."

Taylor noted that SIP is flexible compared to ISDN, offering more business features and benefits for firms of all sizes. And it shouldn't be seen as a threat. "Comms dealers used to just sell telephony systems, now they sell a range of services - calls and line, data service, and mobile. SIP should be treated as a natural progression forward from ISDN and PSTN connectivity," he stated. "VoIP has been with us for many years now. Engineers are adept at installing and configuring routers, SIP connectivity is the same as programming ISDN channels and numbers, therefore no additional skills are required."

Taylor noted that ADSL2 has had an impact on business for the mass market. "It's now widely available from a number of different ISPs in 90 per cent of the UK. With standard speeds of 1.3Meg this will support 20-plus SIP calls," he added. "Voiceflex has direct and indirect connections with all the major channel ISPs, meaning the traffic is handed off directly to Voiceflex. We also have our own ADSL2 offering for voice only or voice and data. I am staggered that business with million pound plus turnover run their email, internet, and banking on a single xDSL without any problem. It shows how reliable xDSL has become."

There are huge revenue opportunities to be reaped from VoIP, confirms Andy Hollingworth, Director of Wholesale. "Traditional calls and lines products will not be able to compete with lower cost, converged services, and comms dealers who don't embrace SIP will be squeezed out of the market," he said. "For those who are successful in convergence, the good news is that the total revenue is greater than just a voice or just a data proposition. Additionally customer retention for VoIP is higher because contract lengths are longer, resulting in lower acquisition costs, lower retention costs and increased margins."

SIP trunking provides businesses with more flexible numbering than traditional PSTN and has been used by customers to retain valuable telephone numbers when moving or closing sites. "Unfortunately, IP access costs have restricted SIP to tactical deployments, rather than directly reducing telephony costs," said Hollingworth.

"However, the commoditisation of Carrier Ethernet has changed this assumption and now a resilient SIP solution is far more competitive than ISDN30, even when deploying TDM gateways. For customers with SIP ready PBXs and spare capacity on their data network, the financial benefits become even more compelling."

So far this year Opal has seen increased adoption of 21st century technologies in the market as businesses increasingly swap from TDM VoIP, and look to drive down costs and become more reassured about quality of VoIP applications over the data network. "We predict an increased demand and take up of higher bandwidth solutions as businesses wake up to the opportunities presented by deploying high speed services," noted Hollingworth.

"Opal's approach to SIP is to provide a complete solution for partners, rather than focusing on individual products. In the next few months we will build upon our launch of Opal Ethernet with a SIP and Ethernet service and a joined up support process. Importantly, the proposition has very high service level agreements and is proactively monitored."

Tom Fellowes, Spitfire's Sales Director, noted that the reliability of ISDN has deteriorated over the last five years and many customers have had an ISDN fail, making them more interested in back-up solutions. He commented: "Very cheaply we can put in four SIP trunks, which is an excellent gateway to the customer. As more customers have experienced ISDN30e failures, it has opened up the end user's mind to accept VoIP as a back-up. SIP is safe. You need the conversation about back-up."

A key reason businesses are moving to SIP is numbering flexibility and the ability to retain numbers when moving, add numbers from different dialling codes, and deliver numbers to different sites. Nick Goodenough, Partner Service Manager for Spitfire, observed: "If a customer moves exchange you can say to them that they can keep their numbers, and by the way we'll be delivering your calls over SIP. Whether there's cost saving or not they could not give a hoot because they can keep their numbers.

"Every customer has a different viewpoint. Some don't want to be left behind, so they are open to VoIP. For others, cost savings are important, and to say to them that you can cut their costs by 40-50 per cent, you win the business. Then there are those who are moving site and can keep their numbers. The fact is that you are combining flexibility with cost savings. And saving on maintenance costs of legacy systems."

Fellowes also noted that the increase in affordable voice quality connectivity has helped the take up of SIP. "Ethernet has seen huge growth and is pushing down into medium sized businesses," he said. "Ethernet is a resilient robust medium to carry VoIP. Another connectivity boon that is emerging is real-time QoS over ADSL and SDSL, which is suitable for voice and it's also an affordable product. Along with Ethernet this will overcome any connectivity fears."