SIP Trunking Vs Hosted PBX: How They Differ & Which Is Best

The world of internet telephony can often seem like a mishmash of acronyms that don’t mean much to the average person. This can often make it tough for businesses to choose between options, such as deciding between SIP trunking and a Hosted PBX.

What is SIP trunking? What is a Hosted PBX? How do they differ? And most importantly, which is the best for your business? I’ve written this blog post to explain what both are and how they differ so you can choose the best option for your business.


SIP Trunking Vs Hosted PBX: What Is SIP Trunking?

Put simply, a SIP trunk is basically the modern version of a bundle of ISDN lines. A SIP trunk performs similar functions (although functionality is greater). Additionally, a SIP trunk is virtual rather than physical like ISDN lines are.

In the past, you would buy ISDN lines from a telecommunications provider and use them to connect your telephone system and the PSTN. With a SIP trunk, you are connected to the PSTN or other telephone systems over the internet rather than a physical voice line.

SIP trunking is an option for businesses that have a PBX in their office. If you don’t have an IP-based PBX, your telephone system can be adapted for use with SIP using a SIP gateway.

SIP Trunking Vs Hosted PBX: What Is A Hosted PBX?

A Hosted PBX is a PBX that’s hosted; it really is as simple as that. But let’s break it down and have a look at what that actually means for your business.

A Hosted PBX offers all the functionality you’d normally associate with an on-premises PBX, such as call transfer, voicemail and auto attendant. The difference is you have no hardware onsite to maintain. Instead, your Hosted PBX provider manages your telephone system for you in the cloud.

A Hosted PBX is usually the best option for businesses that don’t have the manpower needed to look after an onsite PBX, or companies not wanting the expense of purchasing their own telephone system equipment.

A Hosted PBX still uses SIP. The only difference is you aren’t personally responsible for buying and managing the SIP trunking service.

Deciding Between Adapting Your Existing System With SIP Trunking And Hosted VoIP

So you can’t really compare SIP trunking and hosted VoIP directly as they are completely different things. SIP trunking adapts your existing onsite telephone system, whereas hosted VoIP is your telephone system. So the real question is whether you adapt your existing telephone system using SIP trunks, or you use a Hosted PBX service instead.

To help you decide which option is best for you, I will compare using SIP trunks and using a hosted PBX on several points:

  • Cost of setup
  • Ongoing costs
  • On-premises expertise required
  • Call quality
  • Security

Cost Of Setup

Considering the cost of setup is crucial. Is setting up SIP trunks for your business more expensive than the cost of setting up a Hosted PBX? Let’s take a look.

Hosted PBX Setup Costs

The costs of implementing a Hosted PBX will differ depending on factors such as the size of your business. However, in most cases, the cost of setting up a Hosted PBX will consist of:

  • Setting up a broadband service
  • Purchasing phones
  • Purchasing a router
  • Purchasing a switch (might not be needed)
  • An engineer’s time to set up everything in your office (optional, may be unnecessary)

Most businesses will already have a broadband connection set up. If you do, you’ll already have routers too. Additionally, it’s possible your business already uses a switch. Whether or not the routers you have are suitable is another matter, although most routers will suffice. The same can be said about the switch; as long as it has the right number of ports, it should be fine. Your chosen provider will happily advise you on whether your current equipment is suitable for a hosted PBX.

Moving onto the other costs, you may or may not have to purchase phones. If you already have IP phones, or you’re going to be using other internet-enabled devices, purchasing phones isn’t necessary. Similarly, it’s possible but not guaranteed that you will need a site visit for an engineer to install and configure a router, switch, and your phones. It all depends on what you currently have.

The cost of setting up a Hosted PBX can be as little as a few hundred pounds. It primarily depends on how much hardware you’re going to need. If you already have your broadband connection and handsets, setup will be relatively cheap depending on the number of users.

SIP Trunking Setup Costs

The costs of setting up SIP trunking are highly dependent on the equipment you currently have. The costs depend on:

  • The telephone system you currently have (IP-enabled or not)
  • Extra equipment needed if your telephone system isn’t IP-enabled
  • New telephones if you don’t have IP phones or older phones fitted with adapters
  • Whether or not you have a suitable broadband service
  • Whether you need an engineer to configure your SIP trunking

In an ideal world, you would already have an IP-enabled telephone system. If you already have a PBX capable of working with SIP trunking, the setup costs will be much lower.

If you don’t already have an IP-capable telephone system, that’s when the costs start racking up. While the costs will depend, it might mean replacing your current PBX entirely. At the very least, it means purchasing a SIP gateway.

Setting up SIP trunking can cost as little as a few hundred pounds. It can also cost as much as a few thousand pounds, depending on the PBX you currently have.

Ongoing Costs

Knowing how much you’ll pay upfront is a must, but you also need to know how much you’ll pay monthly. Do the ongoing costs of SIP trunks and a Hosted PBX differ greatly?

Hosted PBX Ongoing Costs

The main ongoing cost with a Hosted PBX is your monthly licence cost. One licence is the equivalent of one phone line, so ongoing costs depend on how many people are using your system.

The price of a VoIP licence will differ from provider to provider. Some providers will charge you a per minute charge, which generally means their licences are cheaper. On the other hand, some providers will bundle in unlimited minutes without any per minute charge which, as you have probably guessed, means you’ll pay a little more per licence.

You may also pay a support and maintenance charge to your provider. Sometimes this is bundled in with the cost of a licence, although it might be listed as an extra charge on your bill. This charge can cost anywhere from £3 to £25 per user depending on your provider.

You will usually pay £10 – £50 per user depending on the provider you choose.

SIP Trunking Ongoing Costs

With SIP trunking, you will usually pay per channel or for a number of channels (for example, you may pay for 30 channels but only use 25). You will also pay for a person with the expertise to manage your SIP trunking.

How much you’ll pay for SIP trunking on a monthly basis will depend on the number of channels you need. It will also depend on how much you pay for the expertise needed to manage your SIP trunking. It is likely that you will need someone in your IT team with the appropriate specialisations if you use SIP trunking.

The ongoing costs of SIP trunking will also depend on the SIP trunking plan that you choose. Some providers will charge you for calls, whereas others won’t.

Providers will typically charge £20 – £40 per SIP channel. You must also factor in the cost of having an IT person on your team with the right experience.

Ongoing costs of SIP trunking can be higher as you need experienced IT personnel to manage them for you.

On-Premises Expertise Required

Now we’ve considered how much you’ll be paying monthly for a Hosted PBX and SIP trunks, we also need to think about the technical expertise you’ll require onsite to maintain the system of your choice.

Hosted VoIP On-Premises Expertise Required

If you go with a hosted VoIP telephone system, it’s unlikely that you’ll ever need an expert onsite to maintain your PBX and make changes.

With Hosted PBX, your provider handles the vast majority of the maintenance and changes for you. You’ll be able to handle adding and removing users yourself, as this is relatively simple with most systems. Beyond that, the rest of the maintenance is handled for you. Your provider looks after the PBX, so technical challenges such as outages, disruptions and time-consuming upgrades are handled for you.

You won’t require any on-premises expertise to manage a Hosted PBX. Most providers will have a simple portal that you can use to manage the basic features of your system, such as adding new users and modifying your auto attendant.

SIP Trunking On-Premises Expertise Required

If you have an on-premises PBX using SIP trunks, you have to manage them yourself or pay another business to manage them.

The downside to having an on-site telephone system is the responsibility that comes with it. You are responsible for the maintenance of the hardware and you will have to ensure you have on-premises expertise in case something goes wrong. There are businesses that will look after your PBX and SIP trunks for you if you don’t have the required expertise in your team. However, this can prove costly and if there is ever any issue, you’ll need to wait for a site visit from an engineer.

If you have an on-premises PBX, you will likely need staff to manage it for you. This can be costly depending on the size of your business and the number of users that you have, as well as the type of PBX that you own.

Call Quality

Ensuring your calls are high quality is exceptionally important. Poor quality calls can really impact how existing and potential customers perceive your business. So which is better in terms of call quality – Hosted PBX or onsite telephone system using SIP trunks?

Hosted PBX Call Quality

Calls using a Hosted PBX telephone system are the same quality as a call using a traditional telephone system, depending on the codec your provider uses.

With a hosted PBX, the quality of your telephone system is entirely reliant on two things: your provider and your internet connection. Because your provider hosts your telephone system, you must try and ensure you choose a reliable provider. Before choosing a provider, take the obvious steps like checking reviews of the company online.

Your internet connection also affects the quality of your VoIP calls. If your internet connection regularly drops or you don’t have enough bandwidth, your VoIP calls will drop, audio will be choppy, and you’ll look unprofessional to your customers. On average a VoIP call requires 100kbps of dedicated bandwidth, depending on the codec that you use. If that bandwidth isn’t available to each and every call, quality will drop.

Call quality with a Hosted PBX will depend on the quality of your internet connection, as well as the VoIP provider you choose. You don’t directly manage your telephone system, so you are dependent on your provider.

SIP Trunking Call Quality

Using SIP trunking, you will have high quality calls on par with using a traditional telephone system. As you have direct control over your SIP trunks, you can integrate them perfectly into your business and ensure that they are working as you require them to.

If you have a sizable workforce or a large number of concurrent calls, SIP trunking is possibly the best option for your business. SIP trunking allows you to have a dedicated connection for your PBX. This ensures a higher call quality as you can guarantee your calls have the bandwidth they need at all times.

SIP trunking ensures a high call quality – as long as they are set up properly and maintained correctly. As long as you have an IT team looking after your SIP trunks and PBX, SIP trunking provides the highest quality of calls for businesses with either high call volumes, large teams, or both.


Last, but certainly not least, is security. Security is one of the biggest concerns of businesses thinking about moving over to VoIP. There are awful connotations of poor security where VoIP is mentioned, so how secure are SIP trunks and Hosted PBX?

Hosted PBX Security

A Hosted PBX is as secure as your provider makes it. The main way you can keep your system secure is ensure your office network is secure. Beyond that, it’s down to your provider.

You rely on your provider a great deal when you invest in a Hosted PBX. They are responsible for keeping the servers your system is stored in secure.

Choosing a reputable provider is important for many reasons, but security is one of the most important. The last thing you want is to choose a provider based on price alone and find your system exploited because they haven’t invested in security. When choosing a provider, speak to them and ask how they keep their Hosted PBX solution secure. If the provider cannot answer your question, that’s a warning sign that you should look elsewhere.

Before selecting a provider, ask them about their security measures. You are dependent on your provider to keep your system safe, so make sure you choose a provider that will keep your calls and data secure.

SIP Trunking Security

SIP trunking can offer superior security, because the security is almost entirely in your control. The security of your SIP trunks will depend on your own security policy and how well you enforce it.

SIP trunking potentially offers greater security because you have greater control over the security that is put in place. If you have the right security policy and solutions in place, SIP trunks can be incredibly secure. Similarly, if you don’t have security procedures in place, your SIP trunks won’t be secure. It’s really as simple as that.

It’s important to keep in mind that you are responsible for the security of your SIP trunks and on-premises PBX. If your business is slack when it comes to security, your PBX won’t be secure.

If you have the budget and the personnel, SIP trunks can be highly secure. You choose the security that you have in place, so SIP trunks can be as secure as you desire.

Jack Mitchell

Jack Mitchell has been the Operations manager at telecoms and MSP Optionbox for more than 4 years. He has played a crucial role in the company, from marketing to helpdesk, and ensures that the IT requirements of over 300 clients are continuously met. With his innate passion for technology and troubleshooting and a particular interest in Apple products, Jack now delivers the most comprehensive tech guides to make your life easier. You can connect with Jack on LinkedIn.

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