Workplace Collaboration MetriCast 2023: SIP Trunking Size and Spending Forecast

The most common means of PSTN connectivity today is via SIP trunking, and businesses obtain these services in various ways. SIP trunking providers may offer APIs to support number provisioning and management. Additional options include integrated third-party tools for administration management, security capabilities such as toll-fraud detection and protection against SIP-based attacks, encryption, and performance management to guarantee voice quality. Few businesses are all-in with one form of PSTN connectivity, especially large enterprises that may have multiple calling and contact center platforms, in addition to special use single phone line requirements. This year’s Workplace Collaboration MetriCast 2023 market size and forecast report for SIP trunking shows that 25.1% of respondents utilize SIP trunks to on-premises PBXs, 20.7% bring their own SIP to UCaaS services, and 22.5% have PSTN bundled with UCaaS. This SIP trunking analysis focuses on the SIP services for which businesses contract on their own. These include connectivity for on-prem PBXs and contact center platforms, as well as “bring your own carrier” (BYOC) for UCaaS and Contact Center-as-a-Service (CCaaS) platforms. The report provides details on SIP trunking spending, market size and forecast, and vendor selection, along with segmentation by size and global region. Highlights of the study include the following:

• The global market size for SIP trunking was $10.5 billion in 2022, up 8.0% year-over-year (YoY). Metrigy forecasts the market to grow at a 7.3% CAGR from 2022 to 2027, reaching $14.9 billion by 2027. SIP connectivity is a relative commodity, which suppresses revenue growth.
• Today 25.1% of businesses utilize SIP trunking for on-premises PBXs (the remainder utilize other PSTN connectivity). Regionally, Europe has the largest adoption rate, just slightly ahead of North America. Companies with 2,501 to 10,000 employees have the highest utilization of SIP trunking to PBXs, with 32.5% of companies.
• Of those with UCaaS, bring-your-own SIP trunking to UCaaS is in use by 20.7%, with Asia-Pacific leading in adoption of BYOC. Companies with 2,501 to 10,000 employees have the highest adoption of bring-your-own SIP to UCaaS, with 27.7% of businesses.
• Businesses using Microsoft Teams Phone primarily connect to the PSTN through Direct Routing (41.1%), followed by Operator Connect (27.2%).
• SIP trunking providers offer a few options on how they bill for services, the most common one is a fixed rate per trunk with 43.2% of businesses using unlimited calling, followed by 21.0% of businesses favoring a fixed rate per trunk with a metered rate for calling minutes.
• SIP trunking is a highly fragmented market comprising a handful of global providers plus regional and local providers. The largest portion of businesses use the larger, incumbent providers, including AT&T, BT, Orange, and Verizon. Another wave of providers includes a mix of Microsoft Teams specialists and local providers, including Bandwidth, BCM One, CallTower, Fusion Connect, Gamma, Liquid, Lumen, and NUWAVE
• Among those using SIP trunking, 45.9% have no plans to replace their primary vendor. For those companies evaluating changing providers, the primary reason is high cost associated with their current provider.
• The most important factor for businesses evaluating SIP trunking providers is service reliability.
• We track the percentage of each vendor’s customers that plan to stay with that provider, as well as the percentage that are evaluating or planning a switch to a new vendor. Lumen is the top provider with customer retention and AT&T is the top vendor under evaluation and poised to gain new SIP trunking customers.