A New Race to the Bottom?

Gemma-Hutchins-BTW

Comms Business Magazine speaks to Gemma Hutchins, Senior Product Manager at BT Wholesale, to hear her views on how SIP technology is changing the nature of communication and the recent launch of BT’s new commercial offerings.

As mobile and Voice over IP (VoIP) services continue to evolve and capture a larger share of the UK’s telephony market, traditional landline call volumes are falling. Indeed, landlines now make up less than 30 percent of UK voice telephony connections according to Ofcom, being replaced instead by more sophisticated and cost-effective technology.

In recent years, SIP (Session Initiation Protocol) has emerged as the preferred option for VoIP. With SIP technology, users make calls through an IP connection instead of a traditional phone line. This provides more flexibility, cost savings and the opportunity to integrate advanced technology into an existing service.

It’s clear that SIP-based products are the future of telephony and, in recent years, SIP trunking market growth has been steady. Around 400,000 ISDN channels will be converted to SIP this year, and there are already over 1.6 million SIP channels in the UK. By 2025, BT Group has a goal to migrate all end users from its ISDN network to an all-IP network, which offers substantial opportunities for resellers to gain a greater proportion of the SIP Trunking market.

To support resellers in driving this growth, in September BT Wholesale launched a new commercial offering for SIP Trunking. Resellers have the choice of two simple tariffs for the BT Wholesale SIP Trunking (WSIPT) service, which is built within BT’s core 21CN next generation network and offers superior security and reliability. Both packages also offer inclusive resilience as standard so there is no additional charge for SIP trunking at a disaster recover site and only a 12 month contract is required, which means resellers benefit from a more flexible and competitive product.

The first option is Pay As You Go, where resellers pay for calls as they are made at very competitive rates. What’s more, the SIP Trunking service itself is free of charge if the reseller uses BT Wholesale access to deliver the service to end customers. The offer includes Broadband connectivity as well as Ethernet.

The second option is a Pay Monthly package where geographic and mobile calls are included in the SIP Trunking price (subject to a fair use policy). Again, if resellers use BT Wholesale access services, additional discounts are available.

We’re also including both new and existing access connections in these offers. This enables resellers to upsell to their existing base and increase SIP Trunking volumes – opening up new revenue streams through cross-selling lines, calls, access, equipment, apps and services. As the future of communications heads towards cloud-based solutions, WSIPT resellers are better positioned to migrate their clients’ services to fully-hosted platforms in the future.

For business end-users, there are multiple advantages with BT Wholesale SIP Trunking. They can receive all the benefits of next-generation voice technology without replacing their existing PBX and handsets. What’s more, WSIPT is provided over a solid and reliable BT platform and offers dynamic capacity to meet periods of increased demand by end customers. For the reseller, WSIPT delivers the opportunity to leverage existing functionality, increase reliability, incorporate new technology and save money. Through this revolutionary shift in telephony, resellers can increase their market share at this early stage and capitalise on the evolution of communication technology. The future of communication is certainly changing – and BT Wholesale with WSIPT are leading the way.

Ed Says…

According to research firm The Cavell Group (July 2015), the SIP Trunking market failed to grow as fast as expected in the first six months of 2015. 219,512 (14.92%) trunks were added to reach a total market figure of 1,690,440 SIP Trunks. In the same period in 2014 the market only grew by 137,612 trunks – still considerable growth.

Cavell Group says this growth was mainly driven by the Large Enterprise segment (over 1000 Trunks) and Mid-market segment (50-500 Trunks). Interestingly, the Mid-market performed better than Cavell had forecast previously; historically there has not been much growth in that segment due to a lack of focus by providers and the unavailability of affordable access for customers.

We agree with Cavell however when they say the PSTN End-of-Life in 2025 is going to have a major effect on the SIP trunking market in the next few years. We are already seeing providers such as TalkTalk and Gamma (…and now BT) offering free SIP Trunks with their network and believe that there could be a race to the bottom as providers compete with each other to get ISDN customers to move to SIP.