March 6, 2021

Comparing Cloud vs. Telco SIP Trunks: Which is Better?

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Selecting a SIP trunking service provider may seem like a straight-forward decision to many IT managers. After a brief evaluation, they might conclude the services are commodities with little differentiation, especially given the fact SIP trunking has been available for more than a decade and adoption is widespread in most industrialized countries. But reality is quite different, there are several factors that differentiate them.

The SIP trunking services market is vibrant and dynamic with many providers competing for business with innovative offerings. Two broad provider categories have been established: traditional wireline telecommunications providers and communications platforms as a service. The traditional companies are often referred to as telcos, while the communication platform companies are referred to as CPaaS or cloud companies. These categories are differentiated by their investments in wireline transmission facilities.

Depending upon an organization’s needs, a telecommunications provider may be a better fit than a CPaaS, or vice-versa. This makes it worth your while to carefully analyze the offerings before making a decision.

In this article, we’ll compare the two SIP trunking service provider categories using twelve criteria that IT managers commonly apply in competitive evaluations. The objective is to educate you about the available alternatives and provide a jumping off point for you to perform your own evaluation based on your organization’s needs. The criteria presented are general and all of them may not be applicable to your business.

What Makes Telcos and CPaaS Different?

Both the telecommunications provider (telco) and the CPaaS (cloud) can connect your business to the PSTN. So, what makes them different? Let’s define the two categories of SIP trunking service providers. These are simple broad definitions which may not apply to every company. Acquisitions and other moves by some of the players have blurred the lines. This is another reason why you need to do your homework.

Telcos Operate Regional Wireline Networks

Simply stated, telecommunications providers are the companies that own and operate local and/or long distance telecommunications networks. These facilities-based providers manage the fiber optic transmission systems that connect a specific geographic region of our planet. In the US, they are also known by their former designations as interexchange carriers (IXC) and local exchange carriers (LEC). In other countries, they may be known as postal telegraph and telecommunications (PTT) companies. They include AT&T, Verizon, CenturyLink, NTT, BT, Telefonica and many others.

The SIP trunking service offered by a telco is a system of on/off-ramps for the telephony traffic that flows across their region. The trunks connect to the Publicly Switched Telephone Network
(PSTN) at service control points within the telco’s network. The key is the regional nature of the service. Telco SIP trunking services are designed to deliver service within the provider’s operating region.

These providers typically bundle SIP trunking into a suite of business communications services that may include internet access and Multiprotocol Label Switching (MPLS) services to connect a multi location organization. Of course, they offer a wide range of additional business and consumer services, too.

CPaaS Operate Cloud Communications Platforms

Whereas telcos have been in business for decades, CPaaS are relative upstarts. These companies offer a cloud platform that software developers use to add communications services to their own applications. For example, a click-to-call button in a mobile app might use a CPaaS service to complete the call for users and a two factor authentication process in a website might use a CPaaS to send an authorization code to users via SMS. Example CPaaS companies include Twilio, Plivo, Vonage/Nexmo and many more.

The CPaaS doesn’t operate any fiber optic facilities; instead they purchase bandwidth from telcos and other companies that compose their network. In addition, CPaaS services are generally accessed over the Internet and are available on a global basis, although there are exceptions including for SIP trunking services.

The SIP trunking service offered by a CPaaS connects to the PSTN at exchange points where carriers of all types hand-off traffic with each other. These exchange points are distributed across the world to facilitate high quality, low latency telephony services between users on different provider networks.

CPaaS providers typically offer SIP trunking alongside a set of programmable communications services, including SMS and MMS messaging, wireless, voice and email services.

Comparing SIP Trunking Services

The twelve criteria presented are generally representative of the criteria used by businesses to evaluate SIP trunking services. However, certain criteria may be more or less important depending upon your particular business. For example: A multinational enterprise may be more concerned with global reach than a medium sized business with operations confined to the US; A consumer business with a contact center may be more concerned about capacity scaling than an industrial manufacturer with only UC traffic.

With that caveat, here is a side-by-side comparison of the SIP trunking services generally offered by providers in each category.

Service Reliability and Availability

Telecommunications Provider

CPaaS

Telco networks feature extensive transport network and signaling system redundancy. Fail-over in the case of an interruption is rapid and inaudible. However, customers report having to work around scheduled maintenance windows affecting their SIP trunk interface. Even though these are infrequent, they cause service disruption.

CPaaS SIP trunks connect to the PSTN through 3rd party telco partner networks. These connections are made at exchange points located within a geographic service area.

Most CPaaS exchange traffic with more than one 3rd party network at each exchange point, which protects customer traffic from both outages and interruptions caused by a single carrier’s maintenance windows. The more 3rd parties a CPaaS uses, the better the reliability.

Phone Numbers

This criteria considers multiple factors that can affect an organization’s business agility, including:

  • Provisioning: How long does it take to request and activate a new phone number and how complex is the process?
  • Quality: Are the phone numbers offered to SIP trunking customers “clean?” Sometimes, phone numbers are quickly recycled from another customer application and generate unwanted legacy phone calls.
  • Porting: How long does it take to move a number from another SIP trunking provider and how complex is the process?

Telecommunications Provider

CPaaS

Telcos are known for their lengthy provisioning intervals, including phone numbers. Customers in Reddit discussion groups report a block of new numbers may require several weeks for provisioning by US telcos, while porting a number from another carrier runs 4-8 weeks. Customers also complain it takes weeks to get a commit date for a new number or ported number.
Processes are automated through admin portals for simplicity.
Phone number quality is variable across telcos. Some take steps to ensure numbers are clean while others do not.

CPaaS are generally fast and efficient at provisioning new phone numbers. Most of them enable customers to do so in minutes via their admin portal or via an API.
An advantage with most CPaaS is the ability to provision numbers in multiple regions. For example, a single provider may offer trunking services across North America and the EU. In addition, these numbers are provisioned through the same systems with the same rapid response time, with the exception that certain national regulatory authorities may add an address verification step to the process.
Porting phone numbers is not as rapid as new, but not as long as the Telcos. Porting runs 2-4 weeks in the US, or about half the time required by telcos. Some CPaaS offer a porting API, which automates the entire process, and support services to streamline the process.
Phone number quality can be very high for CPaaS providers. Some have processes to ensure phone numbers are clean before they are offered to customers.

Pricing

Telecommunications Provider

CPaaS

Telcos charge for SIP trunks based on usage minutes and a monthly capacity fee for each trunk. Capacity is based on the maximum number of concurrent calls that can be delivered over the trunk. The rates for each component are not published.
Additional features may be added to the basic SIP trunking service, such as REFER and specialized routing.
Phone numbers are leased on a monthly basis and prices are not published.

CPaaS providers are generally more transparent about prices and offer a simpler pricing model. They charge based on minutes of usage, only, and about half of the players have published their prices online.
Like the telcos, a range of special features may be added to the basic SIP trunking service for a fee.
Phone numbers are leased on a monthly basis and prices are generally published by providers.

Provisioning Process and Intervals

Telecommunications Provider

CPaaS

The typical telco trunk provisioning process is initiated using straight-forward online request forms accessible via the management portal. However, the back-end of the provisioning process is completely separate, which leads to lengthy provisioning intervals. Similar to phone numbers, a new trunk can take weeks to provision, assuming the underlying IP connectivity (MPLS, etc.) is in place.

All trunks must be configured with a maximum concurrent call capacity, which adds complexity to the provisioning process. Capacity changes on an existing trunk require about two weeks.

The typical CPaaS trunk provisioning process is completely integrated and automated, from front-end to back-end. A new trunk can be provisioned in minutes using a straight-forward request form accessible on the management portal or API. There are no capacity settings for CPaaS trunks, which helps to streamline the process.

Features can be added or removed from a trunk in minutes using the same management portal or API.

Capacity Scaling

Telecommunications Provider

CPaaS

As noted above, IT managers need to configure capacity for each SIP trunk in their service. This requires some homework to create a capacity plan, which may range from applying a simple rule of thumb to preparing a complex traffic model based on expected busy hour traffic.

When the number of concurrent calls exceeds the configured trunk capacity, calls may be blocked. On the other hand, excess capacity can be a waste of spend. IT managers need to monitor and adjust capacity utilization on an ongoing basis to optimize user experience and spending.

CPaaS have built their networks differently than the telcos and offer automatic capacity scaling, effectively relieving their customers of the capacity planning burden.

Traffic surges are accommodated by automated systems that add capacity to the service. This continuously optimizes network utilization for the service provider while minimizing the chance a customer experiences a blocked call.

Ease of Administration

Telecommunications Provider

CPaaS

Telco SIP trunking services offer a management portal that automates the front-end of the provisioning process, including changes to features and capacity.

Organizations with sophisticated applications requiring automation should note the telcos don’t offer an API for administration.

Most CPaaS offer a comprehensive management portal that enables provisioning, as well as monitoring and troubleshooting tools (more on this later).

Organizations building communications services should note some CPaaS enable trunks to be grouped into subaccounts. This facilitates a service resale model.

CPaaS may offer an API to help automate provisioning and monitoring. Commonly supported languages include C#, Java, Node.js, PHP, Python, Ruby, Objective C, Swift and Java.

Quality of Service (QoS)

Telecommunications Provider

CPaaS

Quality of Service (QoS) delivered by telco SIP trunks is consistently good to excellent in MOS terms, though there is little hard data on this topic.

Telcos offer points of presence that are geographically nearby to the customers they serve. This helps to minimize latency that can affect QoS.

Similar to CPaaS, QoS may be affected by the access method used to transport traffic between customer premises and the provider’s point of presence. Access methods include over the top internet tunnels, MPLS, and direct connections.

A common misconception about CPaaS is that QoS suffers because traffic must be routed over the internet. However most CPaaS offer access methods similar to the telcos, including MPLS, and direct connections.

The primary factor affecting QoS on a CPaaS trunk is the proximity to the point of presence. Once the traffic hits their networks, CPaaS providers deliver QoS that is similar to the telcos because they exchange traffic in the same locations as most telcos.

To minimize latency, CPaaS typically offer points of presence within the continents they serve. Customers should evaluate proximity to the nearest Point of Presence (PoP) and their office locations to ensure latency is held within tolerances.

Global Reach

Telecommunications Provider

CPaaS

By their nature, telcos are experts at delivering SIP trunking services within a specific region – usually a national border. They often offer service outside that region using partnerships with peer carriers. This gives multinational organizations the convenience of one-stop shopping. However, the tradeoff is fragmented services and administrative overhead.

Telco trunks offer complete compliance with the emergency services specifications for their region. In addition, there are no potential data sovereignty issues.

CPaaS providers offer native services in multiple geographic regions and countries. They do so by building points of presence and connecting to PSTN traffic exchanges in each region they serve.

Trunks may be accessible from multiple PoPs, which simplifies testing and deployment.

CPaaS compliance with emergency service specifications varies. Most provide a solution within their primary market and may offer a partner solution to comply with requirements in other regions.

Strict data sovereignty for real time communications may be difficult for CPaaS providers to comply with. Similar to emergency service compliance, these providers may only meet data sovereignty requirements in their primary market.

Contract Requirements

Telecommunications Provider

CPaaS

Telcos require customers to sign a contract with minimum spending commitments before they can deliver service. Typical contract terms are three to five years. It’s common for these contracts to bundle multiple services beside SIP trunking,making it difficult to determine your SIP trunking spend.

CPaaS offer services with no contract and no financial commitments. In fact, you can open an account and provision services in minutes with only a credit card.

Most CPaaS offer preferential pricing in exchange for a multi-year contract commitment.

Troubleshooting Tools

Telecommunications Provider

CPaaS

Telcos offer no significant tools to help IT managers troubleshoot their own SIP trunking problems. Instead, IT managers must rely on packet capture reports and other diagnostics in their session border controllers to debug trunking problems.

Most CPaaS offer at least basic online troubleshooting tools. At the top end of the range, you can find:
– Real-time error alerts, including Webhook notifications
– Online graphical traffic analysis and logs
– Downloadable traffic files in PCAP format
– Trunk testing tool

Customer Support

Telecommunications Provider

CPaaS

Baseline support offered by Telcos includes access to an agent and minimum response commitments. Advanced support levels and rapid response times are available on a fee basis.

Similar to the Telcos, CPaaS offer baseline support with minimum response guarantees, however, access to an agent isn’t included. Advanced support includes access to a support agent with rapid response commitments.

Communications Security and Privacy

Telecommunications Provider

CPaaS

Telcos generally offer a range of encryption options for securing your traffic. They support VPN tunneling, or TLS and SRTP encryption on a per session basis.

Telcos offer support for some of the more stringent TLS options, such as RSA and elliptic curve public key cryptography.

The CPaaS offer VPN tunneling, or TLS and SRTP encryption. However, advanced cryptography options are not generally available.

The Payoff for Careful Evaluation

There are substantial differences between the SIP trunking services offered by Telcos and CPaaS providers and it’s worth careful evaluation before choosing a vendor. There are many stories of organizations switching between categories and recognizing huge benefits – better reliability, lower cost, faster scaling, etc.

Determining which category is a better fit for you depends upon the needs of your business. We’ve suggested a few criteria, but we recommend you make your own list. Then, carefully evaluate services from the major CPaaS and telco providers serving the regions where you need PSTN connectivity. You may be surprised by the comparison. In any case, we are certain that your effort will be rewarded.

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