Our team: Tim Wright
In August 2018, Gavin Patterson the then CEO of BT Group plc announced that BT will switch off ISDN services from its Public Switched Telephone Network (PSTN) in 2025, starting with a cease in supply from 2020, and moving to a full migration by 2025 (although the final date will be dependent on how successful UK-wide fibre roll-outs are).
ISDN stands for Integrated Services Digital Network. It is a set of communication standards which enable the simultaneous digital transmission of voice, video and data over the PSTN infrastructure and circuits. ISDN displaced the traditionally copper fixed-line analogue telephone networks.
According to Ofcom, the UK’s communications regulator, there are 33.2 million fixed landlines in the UK (including ISDN), with approximately 7.6 million of these belonging to businesses. Of these, some 3.2 million businesses in the UK currently use the ISDN network. These will all have to be replaced or upgraded to IP (Internet Protocol) based telephony systems in the coming years. IP telephony, also known as VoIP (Voice over IP), is a general term for the technologies that use the IP’s packet-switched connections to exchange voice, fax, and other forms of information that have traditionally been carried over the PSTN.
Outsourcing Telephony Systems
Modern communication solutions provide comprehensive unified communications services, including data, voice, video, and mobility functionalities. When outsourcing to an external provider, businesses should to address many of the issues which come up in other types of outsourcing such as liabilities and indemnities, TUPE, change management, termination rights and exit, security, scope and service levels, fault response and resolution), as well as some issues specific to outsourcing communications services. These include:
Another key area to be covered in the outsourcing contract is the price model. When assessing the market and selecting a solution, it is important to compare like-with-like. This can present a challenge because there are many different approaches to pricing in communications outsourcing contracts, reflecting the broad range of services falling within communications outsourcing arrangements. Some of the more common approaches include:
The cost of the outsourced provider’s investment e.g. upgrading the existing network from a circuit-switched to a packet-switched IP network, will also need to be factored into the commercial model. This may result in the agreement of a minimum committed spend and/or breakage fees in the event of early termination. Volume-based discounts or rebates are also commonly used to afford more flexibility to the business, incentivising but not obliging, the purchase of a greater volume of services.
BT appears determined to phase out its legacy networks and platforms, with customers migrating onto the IP network, as soon as possible. Businesses still using ISDN will need to factor in the need to switch to IP-based systems into their plans, and should start exploring modern alternative IP-based telephony system (with or without BT), especially where telephony or communications contracts are up for renewal in the coming months.