Companies around the Channel are preparing for the upcoming copper switch off, and the connectivity needs of end customers are shifting. This presents opportunity and challenges for managed services providers who will need to educate their customers about their long-term connectivity options.
Charlotte Hathway, editor of Comms Business, joined Adam Cathcart, managing director at Onecom Partners (formerly 9 Group) for a roundtable discussion with the company’s partners about the path ahead of them.
With the stop sell programme having started, and the copper switch off scheduled for 2025, partners shared their thoughts on that timeframe. One participant noted the differences between stop sell (where Openreach will stop the sale of certain copper-based products) and the switch off (where analogue telephone services including PSTN and ISDN will be switched off).
He said, “My hunch is stop sell will remain, but I do wonder whether the switch off of existing lines could be delayed. There’s been a lot of conversations about vulnerable customers and power cuts.”
Here, another partner shared their view that power outages will need different solutions once the copper network has been switched off. He explained, “A lot of businesses will benefit from looking at how their business and their comms and their IT can withstand a power outage or any number of issues that are power related. But to the point about whether or not the switch off will be deferred, I don’t think businesses are going to be the ones that require that.
“Businesses will react quickly, and they will see the benefit of changing how their IT platform is built over the next few years. The sticking point will be Auntie Mavis, who’s of a certain age living on her own or with a retired husband, and she needs a telephone line in an emergency.”
A BT representative in the room explained the need for channel companies to understand the role of technical substitutions and commercial substitutions. Not all existing connections will need to become IP connections, some might have been installed a long time ago and no longer deliver clear benefits. As such, it is important to understand the business use case of why a connection was made and what it is being used for. He added that there is also work being done by many stakeholders – including Openreach, BT and Ofcom – to assess how vulnerable customers can be transitioned to new services.
Participants agreed that there is a huge opportunity for the Channel around business continuity services. That could include network backup, desktop backup, server backup, and broader business continuity services. One partner said that, given customers have alternatives at home (such as being able to use their mobile as a hotspot), more businesses want secondary connectivity services.
He explained, “We’re getting more customers proactively looking at alternative backup connectivity, possibly by virtue of the fact they’ve got one at home. It’s been a growth area for us, whether that’s mobile SIM, alternative backup data, or connectivity options.”
Interim or long term?
In terms of the solutions customers could transition to ahead of the withdrawal of PSTN and ISDN, one participant discussed his experience that customers do not always have choice in their area.
He said, “We’ve already switched all of our FTTC ADSL customers. Everything is now on SoGEA that has to be on SoGEA, but SoGEA feels like an interim stop-gap solution. Our bigger concern is that we need to be pushing out full fibre to our customers with BT’s fibre to the premises products. Where that’s not happened, in areas where independents have moved in, the threat to us is that third parties with fibre connectivity are now starting to come in and take market share away from BT Wholesale.
“We need to see an acceleration of the full fibre rollout from Openreach. That’s not a new request but, as the shutdown of the copper network starts to ramp up, we need full fibre delivery in some of these areas at the moment where we can’t [offer customers] that.”
Another explained the difficulty of competing with altnets who can drastically reduce costs for the end customer, despite not always being able to deliver the promised speeds or network resiliency. He said, “I find that what’s happening with third parties is that, because the take up hasn’t been as great as they thought, they’ve offered six months free or free installation. Yet the service level isn’t always there.
“Customers are being promised the earth and not getting it delivered. Once BT is also in the same area, we can offer [full fibre] and at that point it’s an easy step [to migrate away from copper services].”
Another participant agreed competition can have benefits, with prices coming down when two networks are available in the same area. He explained, “We’ve had areas where there was a third party that was the only non-DSL availability. Openreach is in there now, and as soon as that happens, prices have halved, which is great for both the customer and for us.”
Customer understanding
For many businesses across the UK, the change might not be drastic as they are already using IP-based solutions. One participant discussed his customer base, which is comprised of only business customers.
He explained, “Customers don’t seem to care with about the switch over to SoGEA from PSTN. As far as they’re concerned, none of them have plugged a telephone handset into their copper line in about 10 years, so taking dial tone off of an existing copper network and just putting pure data through it, it’s inconsequential. I think it’s inconsequential to the rest of us, other than the drop in the cost of the line rentals.”
Every partner in the room agreed that customer demand is usually centred around broadband speed as that is a metric that is easily understood. A participant explained, “Customers are usually buying on speed, and they leave it to us to determine the specific technology that should power that. They just want the fastest connectivity they can get.”
That chimed with the view of another partner, who explained, “Customers just want the fastest broadband. But they don’t always know why, and they might not use it. It’s like buying a car that can do 200 miles an hour, but you never drive it like that. It’s marketing, isn’t it? Whether you use it or not.
“You saw it years ago with data on mobiles, when you could buy 10 GB packages but would only use 100 MB. As soon as people bundle more in, that’s what everybody goes towards. A lot of people won’t use anywhere near the speed that they’re being offered.”
The countdown
One area of concern for the partners in the room is that the three years until 2025 feels like a long time for some businesses, so those customers feel they have time.
One participant explained, “There seems to be a certain number of my customers saying that 2025 is ages away. But stop sell ramps up next year. The rest of it has already started. 2025 is when the network potentially shuts down, but you won’t be able to wait until then.”
As such, bringing together customer demand for increased broadband speed with the shift away from copper-based services will be crucial. Someone in the room explained, “All our services rely on connectivity. It is the key to what we sell. We can’t sell if it’s not good connectivity. You are up against business owners that pay £30 a month at home and can get 500 Mbps. The connectivity in their offices needs to compete with that.”
Another participant agreed. “Connectivity underpins all of the products that we’re that we’re trying to shift to. If the speeds don’t match, it’s difficult to compete. We want to deliver IP in a reliable way and for the call quality to be good. There are workarounds, but then you’re just stacking up cost.”
Being able to offer fibre-based products to all customers, regardless of their location, will be key to success. A participant explained, “Collectively we’re all behind Openreach in terms of going for the rollout. We would just love to see a little bit of a nudge on the accelerator pedal, in line with their own deadline.”
In the meantime, the partners in the room agreed that an open dialogue with customers about the switch off and their options will be essential to keeping customers on board.