Matt Townend of analyst firm The Cavell Group talks about the ongoing switch from ISDN to SIP trunks and hosted services in the UK run up to 2025.
So with BT announcing the intended closure of the ISDN network in 2025, the market is now wrestling with how and when will customers all migrate and what services will they go to. Interestingly, BT’s announcement may ensure customers do not just consider migration to SIP but also look at more cloud based solutions as well.
In Germany, where the date was originally set at 2018, they are seeing the majority of people migrating directly from ISDN to SIP with only a small proportion considering hosted solutions but maybe in the UK, like other markets, we will see customers who have longer to consider look towards choosing a different solution.
It is clear that the market has already been migrating fast with the UK now having 2,175,065 SIP trunks as of December 2015 (source Cavell Group research). The question we as analysts are wrestling with moving forward is whether the majority of the market that was easy to move has already moved, and that the remaining market might be technically and commercially harder to migrate.
An example of this can be shown when I was talking to a SIP provider recently who said, ‘You would struggle to find a call centre that has not already moved to SIP or a hosted solution.’ So those large early wins may have already been had.
At Cavell we have no doubt the momentum behind the switch to SIP is not going to stop but we think it might change slightly with providers looking to add value and consider different commercial and technical solutions to make the decision for users to migrate to SIP more compelling.
We have started to see providers offering value added services with Gamma, for example, linking their inbound services to their SIP trunking proposition. However, we expect providers to offer more services and hybrid capabilities that link to their cloud offerings.
Cavell defined the market a couple of years ago in terms of SIP ‘Capacity trunks’ and SIP ‘Application trunks’. SIP Capacity trunks were really a direct replacement for ISDN, taking the benefits you naturally got from SIP in terms of flexibility and numbering etc. but basically providing a Capacity service, whereas Application trunks start to integrate more advance applications such as FMC etc. In the last few years this has been a SIP Capacity dominated market but we are starting to see the growth in SIP application type services.
We also see customers who are technically harder to move directly to SIP. This may be because they have PBXs which are technically not compatible directly with SIP services or that are expensive to upgrade to this capability and with this in mind we may see more Gateways being offered in the market as part of the solution. In Germany we are again seeing Gateways being offered widely to speed up this transition.
We have also seen services like Skype for Business increase the requirement for gateways and SBCs
The final change we might see as we get closer to 2025 is commercial as providers get really aggressive with pricing and bundling of their services. Today, although we have seen some interesting pricing of trunks in the UK, generally the price has been reasonably stable.
We can also expect the providers of hosted cloud communications services to really target the ISDN to base to persuade them to move to hosted rather than sticking with PBX infrastructure.
In summary we will see the migration from ISDN continue and the majority will move to SIP. However, the services that are offered to facilitate this switch will also change in the future and customers that leave it too long may also start to consider the benefits of moving to a cloud type service.
If you want to find the latest SIP trunking and hosted comms figures they are published at Matts blog www.thevoiceofvoip.co.uk
Ed Says… There is clearly going to be a land grab for SIP trunk and hosted telephony market share over the coming years and inevitably there are commercial decisions to be made by suppliers that will affect the number of stakes they place in the ground. The territory that suppliers stake out is crucial to their well-being and longevity as it has been proven that the supplier of the network has the best chance of also providing the value add applications that run over the top.
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