Market Report

The future of telephony

What will the future of telephony look like? Comms Business talks to the market about the changes that are underway, and the capabilities that are coming.

The telephony market is being disrupted by pioneering infrastructure projects that will ensure businesses and homes across the UK have access to the speed and capacity that they need to carry out their jobs and live their lives. FTTP services are replacing FTTC, and 2G and 3G networks are evolving towards 4G and 5G. This new era of connectivity will shape the future of telephony, with voice and other types of communication now moving across new networks and services.

As we welcome the fixed and mobile networks of the future, we also need to wave goodbye to the ageing networks that can no longer fulfil user requirements. The Public Switched Telephone Network (PSTN) will be retired, which will also mean the end of the road for services that run on it including the Integrated Services Digital Network (ISDN). These networks have been at the heart of channel offerings for much of its history, so the change for the industry will be profound.

Paul Tsang, head of communication solutions, Redcentric, pointed out the timescale channel companies must keep in mind, as well as the long-term advantages. He explained, “By the end of December 2025, the UK’s PSTN will be switched off by Openreach, along with ISDN. While it will understandably cause some disruption in the short term, businesses will benefit in the long term from improved telephony services and enhanced collaboration solutions.”

The impact of the pandemic and the lockdowns that went with it mean businesses are now better prepared for the move to all-IP than they might otherwise have been.

Steve Barclay, managing director, Eve Networks, said, “More than two years have passed since the final round of lockdown restrictions were lifted in the UK, but hybrid working remains the norm. It’s fascinating to consider how government mandated home working coincided with the build-up to Openreach’s copper switch-off, and how this influenced the speed of the shift away from legacy technology.

“The UK’s approach to all-IP was fast-tracked at a rate that none of us could have predicted. Suddenly the channel didn’t need to convince end users of the benefits of remote working; it became a necessity and adoption of the supporting technology was instant.”

Barclay added that the switch-off is not the exclusive driver of change. He said, “The copper switch-off has become an incentive for businesses to move to all-IP services, but it is no longer the driving force. Human behaviour will continue to be the leading factor that influences the telephony landscape.

“The landscape is about much more than telephony; it’s about how we connect and communicate as people, and how we live and work. Our channel and the technology we provide play an important role in serving those human needs, and that’s part of what makes this industry so appealing.”

The adoption curve

The technology adoption curve is usually split into five stages, with innovators the first to adopt new technologies closely followed by visionaries. Pragmatists then begin adopting the technology followed by conservatives, with skeptics eventually embracing the technology once they feel it has proven itself. Full fibre adoption in the UK is at some point in the middle of the adoption curve, with pragmatists beginning to transition to all-IP services.

The switch-off deadline is squeezing the adoption curve, compelling businesses and people to jump to a newer technology sooner than they might otherwise have done. What this looks like in reality, as we move towards the deadline, remains to be seen but it will certainly be a busy couple of years for the Channel.

The implications of the switch-off will stretch across the industry, with a huge variety of solutions resting on PSTN and ISDN. Nick Poyner, managing director, Rubix VT, explained, “Landlines aren’t the only things that rely on the phone network. It also supports devices ranging from healthcare devices, burglar alarms, ATMs and card machines to traffic lights, motorway signs and railway signals.

“The copper phone network supports thousands of personal alarms and home monitoring systems that allow disabled people and those who are older or have health problems to access help if they need it. There are 1.7 million people using these telecare devices in the UK.”

As such, Poyner explained, channel companies will need to carefully assess individual customer requirements and manage their transitions to all-IP alternatives. He said, “It is important that MSPs and resellers of telecoms services support their customers and help them make this transition from analogue to digital services as smooth as possible and with due care and within the time scheduled for the transition.”

For Chris Angus, vice president, 8x8, the copper switch-off represents “the end of an era”. He added, “For many people it’s how the telephony landscape is understood, copper wires connecting every home, every business and everyone across the UK, but times change. What the change brings with it, is a chance to move away from what’s been done before and presents a lot of potential for the future.

“The thing that will be welcome by most people – after we get past the roadworks as some streets and roads will need dug up for the new cabling – is the improved uptime and less buffering of videos, audio, games and other content. In theory, everyone benefits from that. But it’s what comes after that which is the most interesting part because with a more reliable connection and significantly improved speeds comes incredible potential for transforming how businesses engage with people.”

Angus emphasised the advantages that businesses and people can expect as we embrace the improvements made to connectivity services. He said, “With the change, it won’t be like starting with a clean slate as many businesses have spent years preparing for it, but it is a whole new landscape with huge potential.”

New advancements

So, what does this improved connectivity infrastructure mean for telephony and communications services. Tim Loynes, director for in-building solutions, Cellnex UK, said, “The shift to hybrid working has led to more reliance on digital forms of communication in the working environment.

“The copper switch-off will expedite this uptake of digital connectivity solutions even further, giving businesses an opportunity to upgrade outdated digital infrastructure, opting for solutions which are reliable and adaptable to new advancements in the long term. Fiber-optic networks are generally more robust and resistant to factors like weather, electrical interference and corrosion in comparison to copper, resulting in an improved service and less downtime.”

Loynes discussed the move away from landlines towards unified communications (UC). He said, “An example of communication infrastructure which will be phased out due to the copper switch-off is landlines, and for businesses, this change has already begun. Research by Ofcom found that in 2016, 96 per cent of businesses used landlines. By 2022, that figure had dropped to 51 per cent and, among businesses with 50-249 employees, over three quarters of workers use mobile for business purposes.

“Further to this, businesses that conduct customer service operations are likely to increase the use of mobile unified communications systems to ensure customer service is seamless. By integrating the tools employees use to collaborate and communicate with customers into one platform, network-based voice services can be blended with cloud-native collaboration features, such as text chat and video conferencing.

“Customer calls can then be managed online and directed to employees’ smartphones, shortening wait times and smoothing out call transfers. As straightforward, frictionless customer service has come to be expected by tech-enabled consumers, this will be a welcome change.”

8x8’s Angus explained that moving communications towards digital solutions will put the spotlight on UC, with cloud-based as-a-service (aaS) offerings coming to the fore.

Angus said, “Ultimately digital is the main driver. So that means we are going to see more emphasis on moving from on-premise to cloud-based telephony and more improved unified communications. This digital-move comes with an uncomfortable item for the traditional sellers in the marketplace though. There will continue to be an increase in other companies making a broader move into telephony and telecommunications.

“Traditionally, it was telephony or telco providers but now, due to the way services are going with UCaaS and CCaaS, we are seeing different types of partners wanting to get a piece of the pie – Microsoft partners, for example. They are seeing how they can supply UCaaS and CCaaS as well as the other services they offer.

“For traditional types of partners, you’re not only seeing the shift from legacy to cloud but they’re also having to reskill as they move into their managed service offering. However, they’re also up against different types of partners and partners selling different types of models, so the traditional resellers are now up against agency partners whereas before that didn’t happen. It’s a relatively new thing in terms of the UK market, so there will be lots of competition.”

Tsang, from Redcentric, argued that the future of telephony will be shaped by integration, with organisations and users expecting greater integrations between previously disparate solutions.

He said, “The telephony market over the next few years will be impacted by the need for integration with other systems to enhance capabilities. Telephony solutions are already integrated into unified communications systems and integrations will only become more extensive as telephony evolves and artificial intelligence technologies are brought to market.”

Consistent coverage

Loynes emphasised old frustrations could become history as we move towards the future of telephony, particularly if organisations are able to invest in the best solution for their needs.

Loynes said, “By moving away from the copper network, disruptions in communication between colleagues can be reduced too. Wireless technologies have lower latency in comparison to copper, reducing delays in data transmission, so workers can collaborate in real time, supporting the workplace evolution as it becomes more flexible to allow for hybrid working.

“Utilising 5G coverage also gives workers enhanced mobility, as they can connect to the internet and take calls while on the move. To make sure the full potential of these benefits are realised, consistent cellular coverage across office buildings will be vital to prevent any interruption.”

Some stakeholders expect the lines between different communications solutions to blur as capabilities become increasingly advanced. Mark Pillow, managing director, Voip Unlimited, said, “Since the mainstream uptake of VoIP and UC, the lines between mobile and fixed telephony have become blurred and will continue to converge as telephony increasingly becomes enabled via the internet and an application, rather than a physical service.

“The UK market is migrating away from the walled garden approach to telecoms where services are delivered across dedicated infrastructure, to telecoms provided as a service similar to email or content delivery. This approach whilst providing unlimited flexibility also has associated issues relating to security and reliability. Voice can now travel across potentially insecure, over-subscribed networks with no SLA or guarantee of quality.”

Emerging capabilities

The future of telephony, like almost every other technology category, looks set to be disrupted by the age of AI. It remains to be seen exactly how AI will permeate the industry, but many stakeholders expect the impact to be profound. Pillow, from Voip Unlimited, discussed how AI could help contact centres become more advanced.

He said, “AI has already shown its potential to enhance the experience for all involved. For example, end-customers will relish AI-powered inbound call flows and routing, enabling on-the-fly functionality that optimises operations far more than human decision-making ever could.

“Business customers will also appreciate the ability to adopt more and more communication channels in a single platform, helping them attract younger customers used to communicating over social media and possibly even the metaverse, in the coming years!”

For Tsang, from Redcentric, voice-enabled AI will be particularly transformative. He said, “Voice AI is an emerging field, with organisations using data from interactions and using it in more powerful ways than before, to increase efficiency, reduce risk and improve the employee and customer experience. AI transcription will increasingly become the norm as calls are recorded to be played back and used at a later date.”

It is also hoped that the future of telephony will remove barriers that have persisted with older technologies. Loynes, from Cellnex UK, expects indoor coverage to be prioritised in the delivery of future networks or connectivity projects.

He said, “As we become more reliant on digital technologies, facilities managers and businesses are in need of bespoke solutions to ensure connectivity is available throughout their premises. In-building solutions like distributed antenna systems will help to future proof offices and apartment buildings where landlines are currently still used to communicate.

“These high-density buildings often feature thick walls and structural obstacles, resulting in poor or no coverage. By placing antennas throughout the facility, DAS provides enhanced mobile coverage, extending the reach of wireless networks, so tenants can benefit from 5G coverage and stay connected even while on the move.”

Evolving offerings

So, how can resellers and MSPs evolve their offerings to ensure they are meeting business needs? For Angus, from 8x8, channel companies have two options.

Angus explained, “Either you go niche in one area and be the absolute best at it, working with other resellers and MSPs as well as the wider market, or it’s about being able to provide everything. Either way, it’s not just about changing the offering, but reskilling people, building new connections. It’s a lot to do in a competitive marketplace.

“Ultimately, they need to be ensuring they are offering feature-rich products that deliver high value for money and high reliability but require low maintenance. The days of companies willing to put up with needing to swap between applications to be able to customer interactions are on the wane.”

Angus raised the challenge of pricing services and solutions correctly and competitively in this new era of telephony and connectivity. He said, “The other thing that needs brought to mind – and will be in the coming years – is more variable pricing. It’s not just the product offerings that need to change, it’s also how they are charged.”

Pillow, from Voip Unlimited, added, “While price will always play its part, the days of end-customers prioritising cost over everything else are numbered. The technical aspects and user-facing features will become key differentiators, as innovation continues at a break-neck pace, meaning resellers should focus more on serving the end-users with the best-fit product than finding the lowest-cost solution, or damaging margins simply to win a sale.”

Channel companies can give themselves the best chance of continued success by keeping an eye on how human behaviour is changing and figuring out the best technologies to support shifting requirements and expectations.

Barclay, from Eve Networks, said, “Resellers and MSPs should remain open minded to reviewing what they offer, and how they present their offerings. The telephony landscape is shaped by changes in human behaviours, more so than by the underlying technology that’s available.

“Staying close to your customers’ needs and offering them tools that fit with how they want to work is the best way to remain relevant.”

This market report was included in our October 2023 print issue. You can read the magazine in full here.