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In recent years, Internet Protocol (IP) telephony is becoming popular because it offers more flexibility in the implementation of new features and services. Session Initiation Protocol (SIP) is a peer-to-peer, multimedia signaling protocol standardized by the Internet Engineering Task Force (IETF) plays a vital role in providing services to IP telephony. SIP is ASCII-based, resembling HTTP, and reuses existing IP protocols such as Domain Name Service (DNS), Real Time Protocol (RTP), Session Description Protocol (SDP) etc. to provide media setup and teardown. The SIP Proxy Server (SPS) is a software application that provides call routing services for the SIP based IP telephony network. The efficiency of this process can create large scale, highly reliable packet voice networks for service providers and enterprises. We established that the efficient design and implementation of the SPS architecture can enhance the performance characteristics of a SPS significantly. In this paper, we studied the SPS performance that can be characterized by its transaction states of each SIP session of a M/M/c based SIP proxy server performance model in Local and Wide Area Networks.