Hosted PBX vs SIP trunking: Which should you use?

Pia Rios
Pia Rios

Since the days of manually operated switchboards, the private branch exchange (PBX) has been an essential part of business communications. These days, internet-based PBX solutions are the preferred option for streamlining communication with customers and among internal teams.

The two most common setups are cloud-based hosted PBX (HPBX) services and session initiated protocol (SIP) trunking.

  • What is hosted PBX? This setup provides business phone functions by connecting through the internet to a PBX hosted in a service provider’s facilities. Technical matters are handled by the service provider, so setup and use are much simpler.
  • What is SIP trunking? In this method, an IP-enabled PBX is hosted on a business’s premises. It functions as a normal PBX, except that it connects to the public switched telephone network (PSTN) through the internet, instead of through phone lines.

Deciding which method to use can be tricky, especially if your business doesn’t have a telecoms expert on-board (hint: in that case, you’d probably want to go with HPBX). Here are a few questions you can ask yourself to make the decision easier:

1. What are you starting with?

One major difference between HPBX and SIP trunking is setup and installation costs. HPBX usually only requires new IP-phones (sometimes included in the subscription), while SIP trunking requires a large investment in an IP-enabled PBX system—unless you already have one.

If your company already has a PBX capable of SIP trunking, your installation expenses will be significantly reduced. There are some finer points to PBX compatibility, so be sure to ask potential SIP trunking providers if your equipment would work.

2. Who will manage it?

Maintaining a PBX using SIP trunking takes a degree of telephony expertise—especially when it comes to customisation and upgrades. If you have in-house telephone systems experts, you can handle this yourself and possibly save costs in the long run.

If your business lacks the technical expertise, however, you’d be better off with an HPBX service. These services are easy to customise and integrate with other services, while maintenance and upgrades are all handled by the hosted PBX provider.

3. Where will you use it?

One strength of HPBX is its ease of access: you can use its features anywhere you can connect to the internet. If you or your staff travel often or do a lot of legwork, they can use HPBX features from their mobile phones or through other devices, using softphones and similar apps.

SIP trunking service is limited to the premises in which it’s installed.

4. How do you plan to develop it?

True to form, scaling an HPBX service is simple. Activating additional phones can usually be done through an internet browser. Beyond this simple step, equipment is mostly plug-and-play. Additional costs depend on your plan, which might be charged per phone, per user or per minute.

Scaling a SIP trunking system is easy within certain limits. However, if you’re making a significant expansion, you may need additional servers; this can be quite costly. An on-premises PBX allows for more control and customisation, however—so if your business’s operations can justify the larger initial investment, you may see greater benefits, including long-term savings, farther down the line.

For simple but effective business communication systems, call us at 1300 ALLTEL or visit our Business Phone Systems page.

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