diff --git a/cmd/livekit-sip/main.go b/cmd/livekit-sip/main.go
index 92492d6..e0b7c50 100644
--- a/cmd/livekit-sip/main.go
+++ b/cmd/livekit-sip/main.go
@@ -26,6 +26,7 @@ import (
 	"github.com/livekit/protocol/redis"
 	"github.com/livekit/protocol/rpc"
 	"github.com/livekit/psrpc"
+
 	"github.com/livekit/sip/pkg/stats"
 
 	"github.com/livekit/sip/pkg/config"
@@ -90,7 +91,10 @@ func runService(c *cli.Context) error {
 		return err
 	}
 
-	sipsrv := sip.NewService(conf, mon, log)
+	sipsrv, err := sip.NewService(conf, mon, log)
+	if err != nil {
+		return err
+	}
 	svc := service.NewService(conf, log, sipsrv, sipsrv.Stop, sipsrv.ActiveCalls, psrpcClient, bus, mon)
 	sipsrv.SetHandler(svc)
 
diff --git a/pkg/sip/client.go b/pkg/sip/client.go
index c223e12..3b959f8 100644
--- a/pkg/sip/client.go
+++ b/pkg/sip/client.go
@@ -18,7 +18,6 @@ import (
 	"context"
 	"fmt"
 	"log/slog"
-	"net/netip"
 	"sync"
 
 	"github.com/emiago/sipgo"
@@ -36,13 +35,12 @@ import (
 )
 
 type Client struct {
-	conf *config.Config
-	log  logger.Logger
-	mon  *stats.Monitor
+	conf  *config.Config
+	sconf *ServiceConfig
+	log   logger.Logger
+	mon   *stats.Monitor
 
-	sipCli           *sipgo.Client
-	signalingIp      netip.Addr
-	signalingIpLocal netip.Addr
+	sipCli *sipgo.Client
 
 	closing     core.Fuse
 	cmu         sync.Mutex
@@ -66,29 +64,9 @@ func NewClient(conf *config.Config, log logger.Logger, mon *stats.Monitor) *Clie
 	return c
 }
 
-func (c *Client) Start(agent *sipgo.UserAgent) error {
-	var err error
-	if c.conf.UseExternalIP {
-		if c.signalingIp, err = getPublicIP(); err != nil {
-			return err
-		}
-		if c.signalingIpLocal, err = getLocalIP(c.conf.LocalNet); err != nil {
-			return err
-		}
-	} else if c.conf.NAT1To1IP != "" {
-		ip, err := netip.ParseAddr(c.conf.NAT1To1IP)
-		if err != nil {
-			return err
-		}
-		c.signalingIp = ip
-		c.signalingIpLocal = c.signalingIp
-	} else {
-		if c.signalingIp, err = getLocalIP(c.conf.LocalNet); err != nil {
-			return err
-		}
-		c.signalingIpLocal = c.signalingIp
-	}
-	c.log.Infow("client starting", "local", c.signalingIpLocal, "external", c.signalingIp)
+func (c *Client) Start(agent *sipgo.UserAgent, sc *ServiceConfig) error {
+	c.sconf = sc
+	c.log.Infow("client starting", "local", c.sconf.SignalingIPLocal, "external", c.sconf.SignalingIP)
 
 	if agent == nil {
 		ua, err := sipgo.NewUA(
@@ -100,8 +78,9 @@ func (c *Client) Start(agent *sipgo.UserAgent) error {
 		agent = ua
 	}
 
+	var err error
 	c.sipCli, err = sipgo.NewClient(agent,
-		sipgo.WithClientHostname(c.signalingIp.String()),
+		sipgo.WithClientHostname(c.sconf.SignalingIP.String()),
 		sipgo.WithClientLogger(slog.New(logger.ToSlogHandler(c.log))),
 	)
 	if err != nil {
@@ -132,7 +111,7 @@ func (c *Client) SetHandler(handler Handler) {
 }
 
 func (c *Client) ContactURI(tr Transport) URI {
-	return getContactURI(c.conf, c.signalingIp, tr)
+	return getContactURI(c.conf, c.sconf.SignalingIP, tr)
 }
 
 func (c *Client) CreateSIPParticipant(ctx context.Context, req *rpc.InternalCreateSIPParticipantRequest) (*rpc.InternalCreateSIPParticipantResponse, error) {
diff --git a/pkg/sip/config.go b/pkg/sip/config.go
index a96d9c7..9c15648 100644
--- a/pkg/sip/config.go
+++ b/pkg/sip/config.go
@@ -21,8 +21,36 @@ import (
 	"net"
 	"net/http"
 	"net/netip"
+
+	"github.com/livekit/sip/pkg/config"
 )
 
+func GetServiceConfig(conf *config.Config) (*ServiceConfig, error) {
+	s := new(ServiceConfig)
+	var err error
+	if conf.UseExternalIP {
+		if s.SignalingIP, err = getPublicIP(); err != nil {
+			return nil, err
+		}
+		if s.SignalingIPLocal, err = getLocalIP(conf.LocalNet); err != nil {
+			return nil, err
+		}
+	} else if conf.NAT1To1IP != "" {
+		ip, err := netip.ParseAddr(conf.NAT1To1IP)
+		if err != nil {
+			return nil, err
+		}
+		s.SignalingIP = ip
+		s.SignalingIPLocal = s.SignalingIP
+	} else {
+		if s.SignalingIP, err = getLocalIP(conf.LocalNet); err != nil {
+			return nil, err
+		}
+		s.SignalingIPLocal = s.SignalingIP
+	}
+	return s, nil
+}
+
 func getPublicIP() (netip.Addr, error) {
 	req, err := http.Get("http://ip-api.com/json/")
 	if err != nil {
diff --git a/pkg/sip/inbound.go b/pkg/sip/inbound.go
index 7001b45..809c53d 100644
--- a/pkg/sip/inbound.go
+++ b/pkg/sip/inbound.go
@@ -451,7 +451,7 @@ func (c *inboundCall) runMediaConn(offerData []byte, conf *config.Config, featur
 	c.log.Debugw("SDP offer", "sdp", string(offerData))
 
 	mp, err := NewMediaPort(c.log, c.mon, &MediaConfig{
-		IP:                  c.s.signalingIp,
+		IP:                  c.s.sconf.SignalingIP,
 		Ports:               conf.RTPPort,
 		MediaTimeoutInitial: c.s.conf.MediaTimeoutInitial,
 		MediaTimeout:        c.s.conf.MediaTimeout,
diff --git a/pkg/sip/outbound.go b/pkg/sip/outbound.go
index b65bd92..2d2f973 100644
--- a/pkg/sip/outbound.go
+++ b/pkg/sip/outbound.go
@@ -99,7 +99,7 @@ func (c *Client) newCall(ctx context.Context, conf *config.Config, log logger.Lo
 	call.mon = c.mon.NewCall(stats.Outbound, sipConf.host, sipConf.address)
 	var err error
 	call.media, err = NewMediaPort(call.log, call.mon, &MediaConfig{
-		IP:                  c.signalingIp,
+		IP:                  c.sconf.SignalingIP,
 		Ports:               conf.RTPPort,
 		MediaTimeoutInitial: c.conf.MediaTimeoutInitial,
 		MediaTimeout:        c.conf.MediaTimeout,
diff --git a/pkg/sip/server.go b/pkg/sip/server.go
index e1ce040..b57be6c 100644
--- a/pkg/sip/server.go
+++ b/pkg/sip/server.go
@@ -110,13 +110,11 @@ type Handler interface {
 }
 
 type Server struct {
-	log              logger.Logger
-	mon              *stats.Monitor
-	sipSrv           *sipgo.Server
-	sipListeners     []io.Closer
-	sipUnhandled     RequestHandler
-	signalingIp      netip.Addr
-	signalingIpLocal netip.Addr
+	log          logger.Logger
+	mon          *stats.Monitor
+	sipSrv       *sipgo.Server
+	sipListeners []io.Closer
+	sipUnhandled RequestHandler
 
 	inProgressInvites []*inProgressInvite
 
@@ -127,6 +125,7 @@ type Server struct {
 
 	handler Handler
 	conf    *config.Config
+	sconf   *ServiceConfig
 
 	res mediaRes
 }
@@ -156,7 +155,7 @@ func (s *Server) SetHandler(handler Handler) {
 }
 
 func (s *Server) ContactURI(tr Transport) URI {
-	return getContactURI(s.conf, s.signalingIp, tr)
+	return getContactURI(s.conf, s.sconf.SignalingIP, tr)
 }
 
 func (s *Server) startUDP(addr netip.AddrPort) error {
@@ -169,7 +168,7 @@ func (s *Server) startUDP(addr netip.AddrPort) error {
 	}
 	s.sipListeners = append(s.sipListeners, lis)
 	s.log.Infow("sip signaling listening on",
-		"local", s.signalingIpLocal, "external", s.signalingIp,
+		"local", s.sconf.SignalingIPLocal, "external", s.sconf.SignalingIP,
 		"port", addr.Port(), "announce-port", s.conf.SIPPort,
 		"proto", "udp",
 	)
@@ -192,7 +191,7 @@ func (s *Server) startTCP(addr netip.AddrPort) error {
 	}
 	s.sipListeners = append(s.sipListeners, lis)
 	s.log.Infow("sip signaling listening on",
-		"local", s.signalingIpLocal, "external", s.signalingIp,
+		"local", s.sconf.SignalingIPLocal, "external", s.sconf.SignalingIP,
 		"port", addr.Port(), "announce-port", s.conf.SIPPort,
 		"proto", "tcp",
 	)
@@ -216,7 +215,7 @@ func (s *Server) startTLS(addr netip.AddrPort, conf *tls.Config) error {
 	lis := tls.NewListener(tlis, conf)
 	s.sipListeners = append(s.sipListeners, lis)
 	s.log.Infow("sip signaling listening on",
-		"local", s.signalingIpLocal, "external", s.signalingIp,
+		"local", s.sconf.SignalingIPLocal, "external", s.sconf.SignalingIP,
 		"port", addr.Port(), "announce-port", s.conf.TLS.Port,
 		"proto", "tls",
 	)
@@ -231,29 +230,9 @@ func (s *Server) startTLS(addr netip.AddrPort, conf *tls.Config) error {
 
 type RequestHandler func(req *sip.Request, tx sip.ServerTransaction) bool
 
-func (s *Server) Start(agent *sipgo.UserAgent, unhandled RequestHandler) error {
-	var err error
-	if s.conf.UseExternalIP {
-		if s.signalingIp, err = getPublicIP(); err != nil {
-			return err
-		}
-		if s.signalingIpLocal, err = getLocalIP(s.conf.LocalNet); err != nil {
-			return err
-		}
-	} else if s.conf.NAT1To1IP != "" {
-		ip, err := netip.ParseAddr(s.conf.NAT1To1IP)
-		if err != nil {
-			return err
-		}
-		s.signalingIp = ip
-		s.signalingIpLocal = s.signalingIp
-	} else {
-		if s.signalingIp, err = getLocalIP(s.conf.LocalNet); err != nil {
-			return err
-		}
-		s.signalingIpLocal = s.signalingIp
-	}
-	s.log.Infow("server starting", "local", s.signalingIpLocal, "external", s.signalingIp)
+func (s *Server) Start(agent *sipgo.UserAgent, sc *ServiceConfig, unhandled RequestHandler) error {
+	s.sconf = sc
+	s.log.Infow("server starting", "local", s.sconf.SignalingIPLocal, "external", s.sconf.SignalingIP)
 
 	if agent == nil {
 		ua, err := sipgo.NewUA(
@@ -265,6 +244,7 @@ func (s *Server) Start(agent *sipgo.UserAgent, unhandled RequestHandler) error {
 		agent = ua
 	}
 
+	var err error
 	s.sipSrv, err = sipgo.NewServer(agent,
 		sipgo.WithServerLogger(slog.New(logger.ToSlogHandler(s.log))),
 	)
diff --git a/pkg/sip/service.go b/pkg/sip/service.go
index 5f5d330..123b120 100644
--- a/pkg/sip/service.go
+++ b/pkg/sip/service.go
@@ -16,6 +16,9 @@ package sip
 
 import (
 	"context"
+	"fmt"
+	"net/netip"
+	"strings"
 	"sync"
 	"sync/atomic"
 	"time"
@@ -26,18 +29,25 @@ import (
 	"github.com/livekit/protocol/logger"
 	"github.com/livekit/protocol/rpc"
 	"github.com/livekit/psrpc"
+
 	"github.com/livekit/sip/pkg/config"
 	"github.com/livekit/sip/pkg/media"
 	"github.com/livekit/sip/pkg/stats"
 	"github.com/livekit/sip/version"
 )
 
+type ServiceConfig struct {
+	SignalingIP      netip.Addr
+	SignalingIPLocal netip.Addr
+}
+
 type Service struct {
-	conf *config.Config
-	log  logger.Logger
-	mon  *stats.Monitor
-	cli  *Client
-	srv  *Server
+	conf  *config.Config
+	sconf *ServiceConfig
+	log   logger.Logger
+	mon   *stats.Monitor
+	cli   *Client
+	srv   *Server
 
 	mu               sync.Mutex
 	pendingTransfers map[transferKey]chan struct{}
@@ -48,7 +58,7 @@ type transferKey struct {
 	TransferTo string
 }
 
-func NewService(conf *config.Config, mon *stats.Monitor, log logger.Logger) *Service {
+func NewService(conf *config.Config, mon *stats.Monitor, log logger.Logger) (*Service, error) {
 	if log == nil {
 		log = logger.GetLogger()
 	}
@@ -60,7 +70,27 @@ func NewService(conf *config.Config, mon *stats.Monitor, log logger.Logger) *Ser
 		srv:              NewServer(conf, log, mon),
 		pendingTransfers: make(map[transferKey]chan struct{}),
 	}
-	return s
+	var err error
+	s.sconf, err = GetServiceConfig(s.conf)
+	if err != nil {
+		return nil, err
+	}
+
+	s.conf.SIPHostname = strings.ReplaceAll(
+		s.conf.SIPHostname,
+		"${IP}",
+		strings.NewReplacer(
+			".", "-", // IPv4
+			"[", "", "]", "", ":", "-", // IPv6
+		).Replace(s.sconf.SignalingIP.String()),
+	)
+	if strings.ContainsAny(s.conf.SIPHostname, "$%{}[]:/| ") {
+		return nil, fmt.Errorf("invalid hostname: %q", s.conf.SIPHostname)
+	}
+	if s.conf.SIPHostname != "" {
+		log.Infow("using hostname", "hostname", s.conf.SIPHostname)
+	}
+	return s, nil
 }
 
 func (s *Service) ActiveCalls() int {
@@ -111,12 +141,12 @@ func (s *Service) Start() error {
 	if err != nil {
 		return err
 	}
-	if err := s.cli.Start(ua); err != nil {
+	if err := s.cli.Start(ua, s.sconf); err != nil {
 		return err
 	}
 	// Server is responsible for answering all transactions. However, the client may also receive some (e.g. BYE).
 	// Thus, all unhandled transactions will be checked by the client.
-	if err := s.srv.Start(ua, s.cli.OnRequest); err != nil {
+	if err := s.srv.Start(ua, s.sconf, s.cli.OnRequest); err != nil {
 		return err
 	}
 	s.log.Debugw("sip service ready")