Ofcom has announced that December 2025 will be the switchover deadline for ISDN to IP Voice Services (sometimes referred to as IP or VoIP). This means that all communication networks currently on an ISDN connection have until this date to change to the modernised IP. We have learnt that there will be a ‘supplier change moratorium’ two years before the deadline to allow for a static market changeover; however, the more time you will have to plan for this important changeover, the fewer disruptions there will be to business communications. Furthermore, because of the alteration, it is likely that there will be no new ISDNs available on the market after 2020 – that’s less than two years away!
According to statistics by the Cavell – SIP and IP Trunking Market Report & Forecast 2016 – 45% of UK companies have already adopted IP Voice Services into their operations, with more and more implementing it each year because of its overall benefits for business communications.
Considering the upcoming removal of ISDN, Ofcom decided to discontinue their pricing regulations on existing ISDN, Analogue call line rentals and their associated features from November 2017.
Unfortunately, this has encouraged big suppliers like BT Retail to take advantage of current ISDN users by applying price increases. Openreach (the part of BT that manages the network and sells wholesale to other providers) has continued to distribute price hikes to close their margins, something which is set to remain a regular feature throughout the changeover period, according to the latest announcements. Examples include the removal of product capping, as well as increases in the initial call set-up charges which result in a dramatic rise in the overall cost of the call altogether. For example, one business plan can have a set-up charge of 12p/call, even before any dialogue has taken place! For companies that make a lot of calls, this can rack up substantial communication bills. BT’s approach to pricing structures is troublesome because other suppliers peg their rates and discounts in accordance with the company, which means other suppliers will follow suit.
Additionally, over the last 20 years, communication suppliers have experienced a severe squeeze, with fixed minute figures halving and margins at a fraction of what they used to be. The result has seen many small retailers having to exit the market, whilst super re-sellers and networks, such as Daisy, Talk Talk and Chess, obtaining a significant influence in the market through acquisition policies.
With the regulation shackles off, it will be more than likely that suppliers will be looking to recover their margins while they can, and ISDN users will be the victims. This is going to see a lot of companies feeling vulnerable and looking toward strategic communication solutions.
A change to IP services will, however, see benefits extend to both customer and supplier. On the one hand, suppliers will be able to increase their profits by securing new sales, but on the other, customers get the benefits of updated technology. On the service side, modernised solutions bring new benefits such as enhanced disaster recovery, unified communications and improved tools for business operations – including click to dial, presence and find me anywhere, omnichannel communications and process efficiencies.
An appealing sale, but companies still need to be wary for various reasons. Firstly, whilst ISDN is a generic product, VoIP is not, requiring proper set-up and a thorough service knowledge as there are many considerations to make including:
• Can you combine internet connectivity with voice?
• Who will be hosting the phone numbers?
• Which company will deliver the telephone service?
• Who will supply the connection over which it is delivered?
• Do you need a new phone system and who will be providing it?
• How will all your communication systems connect?
• What quality of service are you guaranteed? (Note that free VoIP services are not suitable for business grade).
• How will data be stored – in the cloud, on company premises or both? (Companies will need to evaluate the pros and cons of on-premise storage against the cloud to determine the best course of action).
• How secure are company calls? (Check that your supplier has ISO accreditations for data and security and that they comply with current legislation).
• What is the delivery method? (There could be future changes in funding profiles depending on whether it’s a capex or opex-based connection).
Most companies won’t have the skillsets in-house to differentiate between good and poor VoIP service contracts, or have time to properly evaluate what they are being offered – considering the looming deadlines. Secondly, suppliers have been trying to tie their customers down to three+ year contracts, which will become uncompetitive as the marketplace evolves. For customers who find themselves already in long-term agreements, an in-depth evaluation will be required to allow them to take advantage of the wider market opportunities.
To summarise, there are significant changes and opportunities in business communications, but as you can see, it’s a treacherous field to navigate, and businesses face considerable dangers to communication costs and operations if they get it wrong. Businesses that look to make this transition alone could be at a major disadvantage, particularly if they lack industry knowledge, and will find themselves committed to a package that doesn’t give them the gains they could obtain with the help of a specialist consultant.
This is where Expense Reduction Analysts can help: we negotiate contracts on behalf of our clients by using our industry know-how and vast network. We can help businesses migrate to IP solution contracts that translate into reduced communication costs and more efficient operations. Get in touch with our team today to find out how we can help you manage your business communication costs effectively.
Article by: Nigel Rosehill