Feature

The future of telephony

Telephony
How will the telephony market change in the coming years? Comms Business talks to stakeholders from across the Channel about what to expect.

The telephony landscape is in transition. The underlying technologies are evolving, and historic infrastructure projects are underway. This is a challenging time for many channel businesses who are having to examine their own offerings and, in some cases, needing to move customers away from the solutions they have had in place for a long period of time.

Gavin Jones, head of channel, BT Wholesale, explained what is happening and what is at stake. He said, “The PSTN copper network has underpinned telephony services for decades and its switch-off is set to be the biggest change for over 30 years. A staggering 16 million telephone lines will need to be transferred to IP networks, meaning businesses of every size must find a new way to connect.

“The channel is well aware of the switch off – or as I like to call it, the digital switch on – but we’ve still got a long way to go to ensure that no one is left behind.

“The move to all-IP is already transforming the telephony landscape and has been spurred on by the widespread shift to hybrid working. Channel partners are critical in pushing this agenda forwards and must adopt the latest tools in order to stay competitive.

“Cloud-based phone solutions such as BT Wholesale’s Wholesale Hosted Communications are the future and come with a wide range of possibilities such as Hosted SIP Trunking and integration with collaboration services like Teams. By embracing these digital tools, channel partners can focus on growing their business and keep customers connected anywhere, anytime, and every time.”

There is an expectation from stakeholders that phone and broadband services will be consolidated. Philip Grannum, chief commercial officer, Wavenet, explained, “We will see a significant increase in the adoption of interconnected fibre technologies. The consolidation of phone and broadband services will also be more prevalent as we get closer to the switch off.

“Users will have the benefit of voice, video, and messaging in a single application available to them on laptop, tablet or mobile device enabling advanced functionality, lower costs and ultimate freedom.”

Grannum added that unified communications, or UC, services will continue to permeate across user groups. He said, “Cloud-based UC services have enhanced collaboration with colleagues and suppliers. Whilst the technology has existed for many years, users are now far more accepting of video calling, and this trend will continue, possibly into the B2C environment.”

Tony Martino, CEO, Tollring, expects the switch off to “change the telecom landscape significantly”. He explained, “The switch off will force businesses to adopt cloud-first strategies and drive new thinking within traditional businesses who relied on copper. The result will be exciting new services and business productivity tools that will enhance the customer experience.

“The copper switch off also represents a considerable growth opportunity for the channel. It presents a way for the channel to go out to their customer base with new and innovative solutions.

“We shouldn’t fear it. We have been using cloud and IP-first applications like Microsoft Teams and Zoom for several years as well as services like WhatsApp, with its 2 billion users worldwide. The switch off will accelerate the introduction and adoption of similar internet-based telephony and comms services but with a more business-focused perspective.”

Lee Underwood, channel manager for the UK, Snom, added, “With the deadline for the copper switch-off growing ever closer, telephone networks will turn fully digital and organisations will have to rely on SIP technologies for their business communications. However, ISDN and PSTN telephone lines are still being used by millions of UK SMEs, so this will mark a big transition for many.”

Underwood anticipates some teething issues along the way but believes the end result is worth fighting for. He explained, “After experiencing some initial disruption from the switch off, businesses can expect to enjoy a whole range of benefits – including a faster network, better quality calls and more collaborative ways of working for employees.

“The transition will also drive innovation in product development, as telephony manufacturers will look to create new functionalities in their solutions that meet the growing expectations of end users.”

Quality and reliability

To prepare for the transition, a focus on quality and reliability will be critical. Gary Read, head of channel, Aryaka, said, “The 2025 switch-off will prompt a new significant concern for enterprises looking to protect the quality and reliability of their customer-facing contact services.

“With lines transitioning to All-IP, QoS guarantees and redundancies will become major attractions, ensuring call quality no matter where staff are working. So, as business networks take on yet another facet of vital communications, network optimisation and monitoring become more vital than ever, which is where an integrated SD-WAN and SASE solution can support enterprise digital transformation initiatives.”

There is also some expectation for some within the channel that the timeline for turning off the PSTN could change. For Iain Sinnott, head of international carrier sales, Enreach for Service Providers, there are many variables that are yet to be brought together.

He said, “I remain unconvinced that the deadline will actually be hit as there are too many critical loose ends outstanding to fully turn copper off, but the end of sale should stand as far warning to customers that change should be properly investigated.

“I think the focus needs to be on working with customers to not just a simple substitute analogue services but to also identify the key outcomes they need for their businesses in this new landscape and how to exploit this smart technology to achieve them.”

Disrupting tradition

Aside from the copper switch off, there are many other drivers that could impact on the telephony market in the next few years. Martino, from Tollring, anticipates many companies will need to resolve to prioritise digital strategies. He said, “All providers of services, including ourselves as a software developer, need to rethink and reimagine our product portfolios in line with these changes and think about how to differentiate in a market that is changing so rapidly.

“It is useful to look at what some digital native companies are doing such as the Uber and Netflix, which are leading the way and forcing traditional markets to rethink their portfolios.

“Everything requires a digital-first approach, looking at the available technology and how it can be used in your value proposition. The key is to understand how the workforce is changing and how to deliver services that are relevant to both the workforce and changing customer needs.”

Martino added that software-as-a-service will at the centre of Tollring’s strategy over the next few years. The company will also ensure over-the-top services are delivered seamlessly, with SD-WAN and a software-first approach to networks facilitating that shift.

There will also be a requirement for customers to have access to more personal interactions. Read, from Aryaka, said, “While calls will always have their place, consumers prefer more personal communication methods. Therefore video-based customer service interactions will explode as enterprises realise how easy it can be to optimise and protect bandwidth, via SD-WAN, for a premium customer experience.

“But, as network edges extend, leveraging the consumer-level internet services of employees working from home, those new attack vectors will still need monitoring. This makes network orchestration, optimisation and threat detection all vital – but the experience needs to be seamless to deliver the level of visibility and ease of use that admins and MSPs expect.”

With organisations battling rising costs, automation and artificial intelligence (AI) will also come into the spotlight. Grannum, from Wavenet, said, “Organisations are facing massive cost pressures, which is driving the need for increased efficiency through automation. Alongside this, emphasis on the customer is of paramount importance. Where customer satisfaction must be at least maintained, enhancing customer satisfaction is key to retention.

“Whether it’s an intelligence voice response system with advanced speech recognition or fully automated chat bots providing accurate and meaningful information to user questions. Regardless of the reason for adopting AI, the main takeaway is AI will be used to boost efficiency freeing up valuable resources.”

Underwood, from Snom, added, “Smart applications are increasingly finding their way into the office environment – so we can expect to see their use continuing to develop over the next few years through telephony solutions. They will drive up productivity, helping businesses and employees to automate more of the mundane tasks that they complete in their day-to-day work.”

New capabilities

In terms of emerging possibilities, many expect UC solutions to reach their full potential. Grannum, from Wavenet, said, “With more UC applications being able to integrate ‘out of the box’ with other applications, call recording and other key business solutions, true UC is now very achievable.

“As the demand to work from home increases, the hybrid office has become increasingly important. Enabling office-based employees to effectively work alongside home workers is a focus for many businesses. It requires a change to room-based AVs to ensure that all parties, irrespective of location, feel equally engaged and content shared across multiple devices and often different platforms.”

Tollring’s Martino expects analytics and AI to continue to pick up pace over the coming years. He discussed the “practical applications” of these technologies. “Many call recording services for compliance involve human intervention. AI can accelerate the ability to deliver stronger compliance since AI can understand what is being said, identify the compliance risk and take preventative action by stopping the recording. We will also see more bot technologies augmenting customer service alongside human interactions.

“These types of emerging technologies will start to rocket. We’ve talked about them for a long time because they take time to deliver real business outcomes. Currently, it is the larger organisations that are willing to invest in professional services to deliver these technologies in their specific businesses. Once we are able to democratise these services and offer them to smaller businesses, there will be a massive opportunity.”

Sinnott, from Enreach for Service Providers, is also positive about the possibilities AI could unlock. He said, “AI and process flow tools for the SMB sector can make a massive difference now the technology has matured and with more business owners looking for lower costs options than the people heavy processes in place, we expect this area to continue to accelerate.

“I also see the tools within the mobile device further eroding in the value of the traditional handset, freeing up budget for better meeting room solutions and quality personal headsets. As the user migrates further to the mobile device full FMC becomes a bigger part of a seamless process.”

Changing user requirements

These broad trends will also collide with the changing needs of end customers. Read, from Aryaka, expects channel companies to focus on clearly differentiating their offerings. He said, “As technology gets faster, better performance becomes commonplace and later, expected to be perfect first time, every time by end-users.

“They also demand more control and awareness over their network’s performance. Hence, end-users are looking at potential vendors through microscopes instead of binoculars – getting deeper ideas of which carrier and product is the best and most valuable to them.”

“Combine that with an explosion of choice in the market, where previously there were three or four trusted providers, the market is far more competitive than ever before which means resellers and MSPs need to focus on differentiating the experience they provide over the physical services.”

The gap between consumer and business communications will also continue to close. Grannum, from Wavenet, explained, “For a long time, consumer UC was far better than the telephony services available in the office. This changed during the pandemic when organisations were forced to quickly adopt video conferencing, and collaboration tools.

“More recently, customers are expecting more, in less time, at a lower cost. Due to this, end users will not accept a move backwards. So, organisations must ensure that they keep the pace with changes in technology whilst ensuring that they are secure and easy to use.”

Data and analytics will also play a role in ensuring telephony technologies are meeting user requirements. Martino, from Tollring, said, “Customer engagement tools have evolved to deliver a multitude of enhancements in terms of business productivity.

“Our digital native workforce will be the benchmark for customer experience across all industries and the service provider community will have to shift to capitalise on these behavioural changes. This requires a rethink of their customer service approach to deliver a strong customer success strategy.

“There is lots we can do. The key is understanding your customers, identifying how they want to procure services, and how they wish to interact. Analytics underpin this process, and having the means to understand trends, as well as the detail, is becoming the rule rather than the exception. Only when this is determined can we consider how we can provide the right tools of engagement to meet their requirements.

“This is achieved by providing multiple tools of engagement and then measuring the success of each new technology. This will enable us to evaluate the services available and then pick and choose the right technology to deliver a successful customer experience for our specific customer demographic.”

Jones, from BT Wholesale, added, “In line with the shift to hybrid working, there’s a greater demand for collaboration, speed and a seamless user experience. This has given rise to UC, such as Microsoft Teams and Cisco Webex that allow teams to collaborate wherever they are in the world, through instant messaging, video calls and more.

“That said, phone calls are still one of the most popular ways to communicate, especially for small businesses – and so telephony is on a digital transformation journey too. Many end customers also want features such as call recording and analytics, so they can be in control of their business and grow through better connections, all of which all-IP enables.

“For example, with BT Wholesale’s WHC Express is a digital phone line for small business customers, delivering digital calls over a broadband network. It provides flexibility to make and receive calls across fixed and mobile devices with voicemail, call divert, call transfer and call hold. For a stress-free experience, the voice service is delivered and fully managed via the online portal.”

Jones called on channel partners to embrace this change. He said, “The future of all communications is all-IP. It’s flexible, fast and provides a better user experience. Channel partners should embrace an all-IP portfolio that combines telephony with the likes of UC collaboration solutions so both they and their partners stay competitive.”

Evolving MSP offerings

Resellers and MSPs will continue to evolve their offerings to keep pace with these changes, and leveraging their partner relationships will be vital. Read, from Aryaka, said, “Primarily, resellers and MSPs need to partner with a vendor that upskills their team and offers broad sales and marketing alignment, via a robust partner programme. Otherwise, if agreements are more ad-hoc, how can partners be assured they’re getting a fair slice of the support available?

“Though that shouldn’t prevent channel operations from providing their customers with choice. Part of Aryaka’s unique proposition is combining all elements of network orchestration into one pane of glass, no matter the service vendors utilised, providing partners with a single hand to shake for all aspects of support and management.

“Enabling resellers to offer a wide range of services while maintaining a seamless solution for the customer, no matter which vendors the number involved.

“Finally, resellers must maintain their margins by offering managed services. Connectivity services are becoming more commoditised by the day, prompting an evolution of resellers’ and MSPs’ propositions.

“It’s no longer about the race to the lowest price of hardware or services, it’s about offering a better customer experience, saving time and resources, which managed services achieve while also offering far more lucrative margins than hardware and connectivity.”

Grannum, from Wavenet, said, “Whilst there is a need for a simple IP telephony device, many end users and organisations will require more UC solutions in-line with the market leader, Microsoft Teams. Microsoft have set the pace and has looked to integrate more than dominate.

“Another area resellers should be looking is extending their product range to provide the full stack, from UC and CCaaS, to security, mobile and IOT as these will all be key a key area of future growth.”

Underwood, from Snom, pointed out some hardware considerations channel companies should weigh up. He said, “Now, more than ever, resellers and MSPs should be focusing on integrating more flexible alternatives into their telephony offerings.

“For example, swapping traditional phone conferencing systems that are expensive to install and outdated, for smaller portable speaker phones that users can take with them anywhere.

“Cordless headsets and portable desk phones are becoming equally essential to businesses in the new hybrid world of work – and as such they should also be considered a key part of any product portfolio.”

Martino, from Tollring, said, “The channel needs to continue to think about how it can build a strong value proposition around the switch off and look at how they can make the proposition even stronger. Services will need to evolve based on a deep understanding of their customers and market verticals.

“Some services will transition easily away from the physical infrastructure whilst others will be more challenging. This is where the channel can approach their customer base to see how they can help. Things like elevator phones, alarm systems and other emergency services that are currently driven by analogue and legacy platforms will require the channel to facilitate these services via IP.

“We are currently seeing resellers and MSPs evolve and enhance their offerings though acquisition. These organisations are looking at their portfolio of services to see what is missing in this changing market environment.

“With the future in mind, providers are also looking to strip out traditional costs, aligning their workforce and repurposing resources so that they stay relevant and keep pace with these rapid changes.”

Sinnott, from Enreach for Service Providers, said, “I think our industry is good at keeping pace with change and for those organisations mixing direct and indirect sales, I think the feedback loops have proven to be very beneficial.

“Perhaps the evolution needs to be focused on the way companies engage with the customer, reducing our obsession with the technology itself and developing a more skilled appreciation of outcomes that will produce the end customers ROI.”

Sinnott concluded that simplifying the complex will be essential. “One truth does remain for those service providers offering a broad and complex portfolio of solutions. We need to ensure that complex services can be delivered and managed simply by our customers.”