How VoIP is changing the telecom sector

Technology | 9 Dec, 2019 |

Whole industries and commercial sectors can often plod along for years without seeing any significant changes. Then, a particularly disruptive technology comes along, and things will never be the same again. That’s certainly been the case in the telecoms sector. That industry is undergoing a seismic change a decade in the making.

The tech that has given the impetus for the change in telecoms is voice over internet protocol or VoIP. A VoIP phone system represents an entirely new way to make voice calls. As the technology has matured, its impact on the telecoms sector has increased. Today, VoIP is the dominant force in telecoms and continues to grow in influence.  

What is VoIP?

VoIP is a new way of making voice calls. Or rather, it’s a new way of transporting the audio of those calls. In traditional telephony, the sound gets translated into electrical signals. Those electrical signals then get transmitted through a network of phone lines. Such a system is called a public switched telephone network (PSTN).

Voice calls work very differently with VoIP. Audio doesn’t get translated into electrical signals. Instead, it gets transformed into internet protocol (IP) data packets. Those packets of data then get transported via the internet from one end of a call to the other. Voice calls via VoIP, then, are possible via laptops, PCs, and similar devices. They don’t always need traditional phones.

Why Has VoIP Taken Hold?

Not all new technology captures the imagination in the same way as VoIP. Plenty of technological developments have little, if any, impact. Especially not on established commercial sectors like telecoms. Why, then, has VoIP taken hold as noticeably as it has? Why is the tech looking like it’s going to usurp traditional telephony wholly? 

The answer to that lies in the sheer number of advantages VoIP has over the older form of telephony. Now that VoIP tech is more mature and better developed, it outstrips the old PSTN in a vast number of areas. All the advantages below explain why both commercial and domestic users are starting to favor VoIP.

Cost

For end-users, making calls via VoIP is often much cheaper than doing so via a PSTN. At the outset, VoIP doesn’t need expensive installation of hardware and phone lines. Instead, a VoIP phone system can be up and running in the time it takes to install the required software.

Calls themselves, too, can be much less expensive when you use VoIP. That’s especially true of long-distance calls outside your local area or country. Geographical distance matters little for VoIP. International and long-distance calls aren’t charged at a premium as they are with traditional telephony.

Convenience & Portability

The modern business is no longer confined to one location. Most companies have multiple premises, and many encourage remote working. VoIP telephony works far better with that modern, mobile style of working.

With an intelligent VoIP setup, staff can make calls as if from a business landline, from anywhere. That adds an extra degree of professionalism to working from home. It also allows employees to field urgent calls on the move. They can talk while still completing tasks that need them to be away from their desks.

Collaboration & Additional Features

VoIP systems offer users far more than just voice calls. The best VoIP systems around are best described as a unified communications product. They deliver Unified Communications as a Service. Voice calls, instant messaging, and video conferencing are all possible via one system.

That’s not to mention other notable features. Features like virtual receptionists and integration with other software solutions. With those in mind, it’s clear that a VoIP system can be vital to many of a firm’s operations. VoIP systems don’t just facilitate better communication. They can also aid the likes of customer support and marketing.

Those are only a few of the myriad benefits which VoIP delivers to end-users. New advantages of the more modern form of telephony continue to emerge as the tech matures. Telecoms companies and carriers, then, have no choice but to sit up and take notice of VoIP. If it’s the kind of system customers want, it’s what they must deliver.        

It’s not only customers who will benefit from a wholesale switch to VoIP, though. There are a few notable pluses for telecoms firms if VoIP does usurp the existing PSTN. 

Maintenance

The traditional PSTN relies on aging infrastructure. Telecoms companies provide their services via an outdated copper wire phone line network. As that network gets even older, the cost of maintaining it rises exponentially.

The physical network of phone lines, too, is vulnerable in an array of different ways. Everything from inclement weather to random acts of vandalism can affect it. Telecoms firms can maintain and fix VoIP-delivered services far more easily.

Convenience

Telecoms companies haven’t been blind to the rise of VoIP over the past decade. All over the world, major carriers have already started to leverage the tech. For instance, in the UK, some firms have already utilized VoIP. They’ve started growing the tech when providing both voice calling and broadband to consumers. That’s according to the UK’s national telecoms regulator, Ofcom:

“telecoms companies have built modern internet protocol (IP) based networks which can support both broadband and landline telephone services.”

Having built such IP based networks, relying only on them is far more convenient for carriers. It doesn’t make sense to maintain a separate PSTN for call services. The seemingly inexorable migration to VoIP, then, is good news for telecoms firms.   

The Future of The Telecoms Sector

So far, we’ve explained why VoIP has established itself. We’ve laid out the advantages the tech delivers, and how its spread makes sense for both carriers and end-users. What does all that mean, though, for the future of the telecoms sector? Is it a done deal that VoIP will displace traditional telephony and be the only voice call tech of the future?

The current trends and statistics are definitely pointing that way.

As you can see from the image above, the uptake of VoIP is accelerating apace in North America. Some experts even predict that the tech could replace PSTN entirely as early as 2025. In light of this trend, major telecoms firms are already making significant moves.

Often unbeknownst to their customers, plenty of the biggest companies already power landlines via VoIP. US regulatory agencies, too, have been making moves. They’ve been approving and observing field trials for full VoIP networks for a few years.

The overarching attitude of such regulatory agencies is once again best summed up by the UK’s Ofcom. In a report on the future of fixed telephone services, they explained their view of VoIP and PSTN:

“PSTN is reaching the end of its life and becoming increasingly difficult and costly to maintain…We recognize [sic] that the migration to VoIP is necessary to ensure the continued provision of reliable landline telephone services given that the PSTN can no longer be sustained in the long term.” 

There’s consensus on all sides – and across the globe – that VoIP is the future of the telecoms sector. To survive and to thrive moving forward, all telecoms firms must (at least in some way) become VoIP firms.

Enterprises in the sector are already making moves in that direction. Many traditional telecoms businesses are finding ways to expand and diversify their offerings. US telecoms giants like Verizon, T-Mobile, and AT & T are merging with or buying up other VoIP providers.

BDO is a world-renowned finance and advisory firm. Tom Mannion is their MD of Valuation & Business Analytics. He explainled the thinking behind the moves those major firms are making:

“We are seeing giant telecoms like Verizon and AT&T make large-scale M&A plays that are clearly aimed outside of their traditional industry boundaries. This is in some ways a case of ‘the best defence [sic] is a good offense’ against the technology industry, which has been taking market shares from telecoms thanks to technologies like online streaming, in the shape of Netflix and Voice over IP (VoIP) with services like Skype and WhatsApp.”

Smaller carriers and VoIP providers, meanwhile, are increasingly merging. That’s in an attempt to stave off the increased interest of telecoms giants in their niche. On all sides, moves are getting made to better position firms to deliver VoIP. The future of the telecoms sector is taking shape in earnest. VoIP will become the dominant tech.

VoIP; The Tech of The Future, Today

It will still be several years before the telecoms sector retires PSTN completely. That day is coming, though. When it does, VoIP is undoubtedly the tech that will replace traditional telephony. Regulators, telecoms companies, and end-users have all already decided. They agree that VoIP is the most viable telephony solution of the future.

Telecoms will not in the future rely on phone lines and related infrastructure. Instead, its prime driving forces will be connection speeds and other similar factors. Businesses and domestic users who have already moved to VoIP are using the tech of the future, today. 

 

Sam O’Brien is the Senior Website Optimisation & User Experience Manager for EMEA at RingCentral, a global VOIP and UCaaS systems provider. Sam has a passion for innovation and loves exploring ways to collaborate more with dispersed teams. He has written articles for websites such as BambooHR and Vault.

 

 

 

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