SIP vs. PABX: Which Is the Best Choice for Your Business?

By introducing innovative ideas and ways, today’s business owners seek ways to flourish their businesses and strengthen their foothold in the market.

One such way of doing this is moving towards VoIP technology. This technology is gaining attention because of its ability to improve customer experience, enhance productivity and streamline operations. 

This convergence of telecommunications has brought two essential communication solutions upfront: PABX System and SIP Voice Services.

Let’s delve into both and decide which is the best communication solution.

What is a Hosted PABX System?

The PABX System Installation, also known as the Private Automatic Branch Exchange Systems (PABX), is a cloud-based solution managed by a third-party service provider like Tel5. It is an entirely virtual system that enables businesses to communicate online.

This eliminates the need for a company to invest in or maintain physical infrastructure, equipment, or software for their phone system, as users connect VoIP phones to the provider’s cloud-based platform.

Key Features and Benefits

A PABX system offers a range of features and benefits besides being install a SIP cloud-based system, such as:

• Call routing: Effectively routes incoming calls to the right divisions or people.
• No on-premise setup: Small businesses with limited office space can benefit from not having to allocate space or resources for phone system hardware.
• Cost savings: Since there is no need to purchase costly hardware or pay for installation, users pay a regular fee based on their usage or a set rate that may also cover maintenance and updates.
• Voicemail hosting: This feature of voicemail records messages for users who are not able to answer their phones.
• Call recording: Call recording allows for the capturing of phone calls to ensure quality, and compliance, or provide training.

What is SIP Trunking?

The SIP Voice Services or Session Initiation Protocol connects your existing on-site PABX phone system to the internet through a SIP provider. This allows you to use your existing PBX hardware and IT resources. 

Many organisations use SIP trunking with their on-premise PBX for a more reliable system. SIP trunking transfers PBX phone calls over the IP network using a PRI, resulting in cost savings and improved features. It functions as a virtual phone line, routing calls over the internet instead of a traditional phone line.

Key Features and Benefits 

• On-premise PaBX: SIP Trunking allows for an on-premise PBX system, giving businesses full control and the ability to customise the system to meet their specific needs.
• Flexibility: It allows for the customisation of call routeing, features, and configurations to meet the unique needs of a business.
• Advanced features: You get access to a variety of advanced features such as call forwarding, voicemail, conference calling, and additional functionalities.
• Immediate ROI: SIP is a proven technology that requires minimal initial expenses. By adopting SIP, organisations can start saving money right away without having to make a large upfront investment.
• Network consolidation: SIP trunking allows organisations to combine their voice and data services onto one network, viewing voice calls as a type of data transfer.

If you clicked on this blog post, your biggest concern is whether to opt for a PABX or a SIP trunk. Have a look at the following section to get your answer!

Difference between Hosted PABX and SIP Trunking

Have a look at this table to find out the key differences between VoIP systems.

Key features	SIP	PABX
Definition	A service that allows a PABX to use the internet for making calls.	An external provider’s cloud-based phone system.
Infrastructure	Requires an existing PABX system and an internet connection	Hardware is not needed on-site unless IP phones are needed.
Cost	Usually less expensive per call, but a PaBX purchase is required.	Monthly expenses that are fixed through subscription pricing.
control	Full control over the PABX system	Less control as managed by the third-party service provider
flexibility	Limited by the capabilities of the on-site PABX system.	Features and integrations are very flexible, and it frequently comes with mobile apps and other tools.
Implementation time	Longer setup time as it involves configuring the on-site PBX and SIP trunks.	Quick to set up since it is cloud-based and managed externally.
Disaster recovery	Depends on the organisation’s disaster recovery plan and infrastructure.	Generally better, as the system is cloud-based and can be accessed from anywhere.
Quality of service	Can be controlled more directly through network management and prioritisation.	Can vary based on the provider and internet connection quality.

Thus, through this comparative table, you can easily depict the key differences between 

both solutions. 

The Verdict

When choosing between these two solutions, the final verdict depends on your needs and business size. For small to medium-sized businesses with limited IT resources, Hosted PaBX may be the best option. At the same time, larger enterprises or those with existing PaBX systems may prefer the control and scalability of SIP Trunking. 

To help make a final decision, consider consulting with Tel5, a reputable solution provider. Contact their experts for guidance.