Large VoIP providers are now moving to acquire the specialized firms that enable businesses to make phone calls over the Internet while using conventional telephone networks.
The firms sell SIP Opens a new window (Session Initiation Protocol) Opens a new window trunking servicesOpens a new window , which set up, send and receive Voice Over Internet Protocol phone calls through an office’s PBX (private branch exchange) box.
SIP trunking replaces the copper lines and dedicated circuit-switched networks that connect your office to the local telephone company’s land lines.
SIP trunking also unsheathes multimedia communications, including text messages, images and video calls, and makes it easier for a company to invest in a unified communications system.Opens a new window
Benefit of Internet phone systems
Internet phone systems eliminate standard per-minute fees and related charges from phone companies, making it attractive to businesses that are pivoting away from the more expensive telephone networks.
It comes as no surprise, then, that some larger VoIP companies are now looking to the SIP sector for acquisitions.
Sangoma Technologies,Opens a new window based in Toronto and specializes in unified communications, recently acquired  VoIP innovationsOpens a new window of Pittsburgh, which has built its business in SIP trunking services.
Sangoma paid $30 million cash with another $6 million in Sangoma common stock for the company. Sangoma’s acquisition is its eighth in as many years, a progression that has seen it establish branches in the United States and Europe.
VoIP Innovations focuses on wholesale SIP trunking, which it aims at resellers, service providers and call centers. It recently launched what it labels a communications platform-as-a-service offering for multimedia messages.
The key to the deal
There is some overlap between the two companies’ service, but essentially the key to the deal is the acquisition by Sangoma of the SIP trunking that VoIP Innovations has been able to put in place since it was founded in 2007.
Other larger firms in the SIP trunking market include Thomson Street Capital Partners, a St. Louis private equity firm. It bought Georgia-based Opens a new window SIP.USOpens a new window /SIPTRUNK.comOpens a new window in February.
Key takeaways:
- SIP trunking is the cost-effective infrastructure businesses can use to connect their Internet-based calling systems to the wider telco network. It has been developed as a communications alternative to traditional landlines.
- Â SIP trunking represents an essential part of the overall VoIP architecture and brings with it considerable cost advantages for companies with high volumes of calls that are making the switch to VoIP.
- As bigger telecommunications specialist go about building up their unified communications portfolio, SIP trunking networks are starting to look increasingly valuable because they can form an essential part of the overall UC offering. The acquisition of VoIP Innovations by Sangoma is just the latest buyout in this sector.