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SIP vs. VoIP: What’s the Difference and Which is Best?

Abhishek Bhargva

Telco ICT


SIP vs. VoIP

The Enterprise world is probably filled with acronyms and terms which can baffle anyone. One such is the difference between VoIP and SIP which many people often misunderstand. You might have heard about VoIP, ISDN and PSTN making some noise around offices but it’s better to have clarity than have a vague idea.  

Let’s get started to know the difference between VoIP and SIP.  

Although VoIP and SIP often look the same, technically, they are quite different from each other. No, you cannot use one as a substitute for another.  

While SIP is helpful for enterprises, households and consumers, VoIP deals mostly with voice calls powered by the Internet.  

You might have the following questions now: Which is the best for my business?

You will be surprised to know it’s better to avoid comparison of VoIP Phone System and SIP phone services as both serve different purposes for businesses.  

Before we go deeper on a specific system, let’s try to understand SIP and VoIP. 


In the telecommunications world, a protocol can be defined as the set of rules used by two entities in order to transmit signals, information and data. With an aim to eliminate confusion and ensure communication sessions, these rules define the standards, semantics, syntax and method of communication. 

Sessions Initiation Protocol (SIP) can be used for controlling, setting up, signaling multimedia sessions which involve the following sessions: 

  • Multiple callers 
  • 2 callers 
  • Video 
  • Audio 
  • Instant messages 
  • Combination of variables 

The single phone call used by the end-user is split into 2 phases: Call set up and Data transfer. 

SIP phone services are used to initiate calls between multiple parties through SIP proxy servers. After the initial parameters get established, actual call & voice data transfer starts between endpoints. 

SIP phone services is just one among the several protocols used to implement VoIP. People often get confused when SIP is used along with VoIP as per the industry standard.  

Why are SIP phone services important for your business?

System of rules in order to exchange messages between hardware is called a protocol. Several protocols including HTTP, TCP and SIP are used by modern digital services. Multiple vendors need to agree to use a protocol on apps/devices before making the best use of it.  

Several protocols have evolved with time to meet industry standards since developers are using it. 

In short, SIP decides how messages need to be sent among endpoints in order to set up or manage multimedia sessions but the actual video or voice is taken care of by other protocols.  

Best part is you can just use SIP compatible hardware to assess if it works for your system. There is no need to worry about integration or compatibility issues.


Voice over Internet Protocol (VoIP) defines the technology to let voice signals be shared through the Internet. Just remember: you can call it VoIP if the voice call travels through the Internet. Be it FaceTime or Skype, all come under VoIP phone systems.  

For instance, most of the phone systems used by enterprises depend on Skype, even if it never uses SIP. Thus, it can be stated that only a few VoIP systems use SIP, just to meet industry standards. 

Connecting dots of VoIP phone system with SIP phone services

It can better be explained through the following example: 

Email is usually implemented via SMTP (Simple Mail Transfer Protocol). By making the services comply with standard protocols, end users can send emails without any barriers. For example: A person using Gmail can shoot mail to a Yahoo or Outlook user without any hassles.  

Do you use a webmail dashboard or desktop client? It doesn’t matter at all. 

Well, that’s how VoIP and SIP are interconnected! It gets easy for entities to work on the same equipment if SIP is used to deploy VoIP networks. For example, if the business buys new SIP phones, they are perfectly compatible as the same protocol is being used. 


SIP offers most helpful features which can be used even in complicated PBX systems.  

User capabilities

The endpoints use SIP to find which type of audio codecs, files or videos can be used in the call. 

Session setup

SIP notifies the phone to begin “ringing” and manage the initial contact among parties. 

Session management

SIP also does other functions that include video conferencing, ending calls or adding up other callers. 

User registration

SIP endpoints get registered with proxy servers to maintain lists of endpoint locations. So, whenever a specific phone starts a call, a request is sent to the proxy server to contact another endpoint and a session is established. 

User availability

SIP decides if the multiple parties are ready to answer, participate or answer the session.  

Different types of VoIP deployment

Before picking out the right service for your business needs, it’s vital to assess different types of VoIP deployments. Here are few you can consider: 

SIP Trunking

It is a process of offering phone services to enterprises who got their own IP PBX to replace the PRI line among traditional phone carriers and organizations. SIP trunking can be used as a bridge between PSTN and VoIP. Note that SIP trunk is a virtual connection (not a physical line) to connect businesses and Internet Telephony Service Provider (ITSP).  

  • Vendor can be held responsible only for the connection or dial tone 
  • You can manage PBX with full control 
  • Your team can decide which features to manage or enable 
  • You are fully responsible for privacy and data security 
  • You can control/decide when or how to upgrade software/hardware. 

Although SIP trunking is more costly than hosted services, it can save a ton of money for your business in the long-run. You can expect better investment from SIP than from hosted services.


Often people get confused and end up perceiving VoIP as a hosted service. Usually the vendor takes care of PBX or related components in this type of deployment. Customers are offered a simple administration panel to adjust the PBX configuration and the phone services are delivered through the Internet. 

Why are hosted services so popular? 

  • Eliminates repair or maintenance hassles 
  • No need to manage system 
  • No need to update periodically 
  • No need to purchase expensive hardware 
  • It’s easy to get started with hosted VoIP services in no time 
  • Your provider can be held responsible for guaranteeing, securing and monitoring service availability 

One of the downsides is that your staff need to depend on a provider to manage infrastructure. Although cloud service can be expensive, it removes the need for maintenance or in-houses support. So budget-friendly in the end.  

Hosted VoIP phone system or SIP trunking

business phone

Many VoIP hosted services make the best use of SIP as the protocol of choice. It doesn’t matter which kind of deployment you opt for, SIP will alway be the primary component.  

The following factors can be helpful to make informed decision: 

Your budget

Although SIP trunking costs less in the long-term, it can demand good investment upfront. Although for larger enterprises, buying IP PBX components is not an issue, small or medium businesses can have a hard time to stretch their budget.  

Long-term plan

How much change do your business go through in the long-term?  

What is any scope for your business to grow? If yes, then VoIP services can help you. Note that increasing the user capacity of PBX demands big investment. For bigger enterprises, it totally makes sense as the longer the telephone systems are used, lower the costs per user.  

Need of your business

One of the big differences between hosted services & SIP trunking lies in “control”. While hosted services offer lesser control on security and customization; SIP trunking lets you have complete control. 

You can find a cloud VoIP vendor to fit your business needs as there are countless VoIP services in the market. If your business needs are not met, then it’s a wise choice to switch to SIP trunking. 

In-house expertise

When you pick a VoIP phone system, you don’t need a team to look after or manage the phone systems. The vendor takes care of everything as a genuine provider can have good support for troubleshooting issues.  

In SIP trunking, you might need to hire a team to maintain the phone systems.  

If you are still baffled with the differences between VoIP and SIP, we can help you out in making an informed decision to pick the right one for your business. Telco ICT team is adept in answering your doubts or queries to explore the right phone system to fit your business needs for steady business growth.  

Also Read – How a VoIP Phone system Can Boost the Productivity of Your Workforce?

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