The voice market is being transformed by the availability of next generation technologies, with the upcoming withdrawal of PSTN services also disrupting the market.
This means change for the voice services offered by wholesalers within the Channel. One key change in recent years has given partners more flexibility and choice as they look to provide customers with the best product at a competitive cost.
Martin Simmonds, head of voice, PXC, explained, “Voice services are increasingly shifting to over-the-top services, decoupling from physical access connectivity. This evolution provides partners with greater flexibility and choice, allowing them to source voice and data services from different suppliers to get the best product, and best deal possible.
“As a result, intense competition continues to drive prices down in an already crowded market. To stand out and stay ahead of the competition, vendors are diversifying into other technologies and product areas, such as contact centre solutions and AI-driven innovations. We’re sure to see the voice market evolving at a rapid pace.”
New and differentiated products are just two of the benefits of this new era, with improvements to digital infrastructure opening up new possibilities for channel providers.
Ben Merrills, CTO, Jola, commented, “The wholesale voice market is always evolving in terms of how services are provided and how they are consumed. Wholesalers focus on what services can be provided, and how they are delivered.
“Ten years ago, the wholesale market was dominated by the transition from analogue to IP, something we still see today due to the PSTN switch-off. However, in recent times, this has accelerated as the digital infrastructure allows for new and differentiated products.”
There is a risk that services could become difficult to set apart from one another, so providers need to be smart about their offerings. This could mean offering customers more than ever before.
John McKindland, UK partner manager, Sona Business, said, “Providers are having to provide a little bit more than just a cheap telephone line replacement service. End users are becoming more savvy and want extra value and more for their money.”
He pointed to contact centre and WhatsApp integrations as two examples of areas where channel providers can add-on capabilities, with the growing impact of AI another consideration in the months and years ahead.
McKindland added, “As businesses start to embrace these technologies wholesale providers need to adapt, evolve and deliver a more dynamic service wrap by expanding their horizons.”
With costs under the microscope for many organisations across the UK, it is no surprise to see price having an impact on the wholesale voice market. Richard Howson, partner account manager, Evolve IP, said, “The market has changed massively over the years, with a big shift to all-IP and much greater cost benefits across the board, trickling down from the large providers to end users, who can take advantage of new solutions and more integrated product sets.
“Whilst there are many different forms of communication, for me voice remains as important and popular as ever, with HD voice raising the quality bar further.”
Comprehensive voice solutions
So, what do wholesale voice services look like in the age of all-IP? For many businesses and organisations, unified communications as a service (UCaaS) offerings are in the spotlight as decision-makers increasingly find these give employees many of the capabilities they require for daily tasks.
Simmonds, from PXC, discussed how that shift has moved business models from voice minutes towards seat pricing. He said, “The ability to source multiple voice services from a single supplier is becoming the norm. Modern cloud vendors are emerging as one-stop shops, providing comprehensive voice solutions alongside their broader service offerings. In the all-IP era, we’re seeing that UCaaS has taken centre stage, with voice minutes bundled into seat pricing rather than offered as a metered service.”
Simmonds emphasised the reality that interoperability between vendors is increasingly vital. He said, “With workplace communication increasingly turning video-based – businesses will need greater interoperability between multiple vendors, such as Zoom, Teams, and Webex.
“This matters especially in larger meeting rooms where you need multi-vendor support. While this adds more complexity to the market, it also creates a great opportunity for the Channel to deliver greater value to customers.”
Merrills, from Jola, explained his company is seeing products split into two distinct categories. Firstly, the delivery mechanisms – such as SIP, Teams, Zoom – and secondly, the services provided over them – such as international numbering, in-country breakout services and landline replacements.
Merrills explained, “The wholesale market is set up to deliver diverse product sets to the channel, ensuring innovations are not limited by their delivery. The advantage of an all-IP infrastructure is that traditional calling services and mobile are now leveraging the same ecosystems. This means that mobile is just another delivery method for wholesale services.”
For McKindland, from Sona Business, the widening of choice in the market is comparable to what has happening in the TV and entertainment sector.
He said, “Integration and recognising wholesale voice is part of a full mix of solutions is the way forward. It’s a bit like going back 15 years or so when we had the analogue TV switch-off where there were just a very few limited number of channels and services.
“It was a flat and predictable market with hardly any choice. Digital TV triggered a revolution with hundreds of channels and catch-up services etc. The wholesale voice market will be exactly the same. We are at the cusp of a brave new world with much more diversity.”
The way in which voice products are consumed by users has been one of the most disruptive forces in the market. Howson, from Evolve IP, said, “In many ways voice has become an application now, where you don’t always need a physical device anymore. You can make a call from anywhere really. Some of the big changes are around scalability and flexibility.
“With VoIP services, you are able to scale up very quickly and provide a single solution across multiple sites, with international capabilities too.”
Howson added that organisations are also demanding flexibility and the ability to work anywhere, which has put scalable solutions in the spotlight. He said, “The ability to fire up and fire down seats can be very beneficial with seasonal transitions, such as the summer or Christmas. Thirty-day rolling contracts from Evolve IP help to ensure lots of flexibility.”
Further convergence
Looking to the future, there is expectation that single line voice services will continue to decline. For Simmonds, from PXC, this will fuel the transition to mobile and UCaaS solutions.
He said, “We anticipate a continued decline in single line voice services, with mobile and UCaaS solutions gaining further traction. As partners gain the ability to choose from a wide array of VoIP products, wholesalers will need to focus on delivering value-added services or bundling VoIP with complementary offerings like data, security, recording, and cloud services.”
Amidst those market condition, Simmonds anticipates that some smaller players may struggle to compete with larger, more established providers. This, Simmonds explained, could potentially lead to market consolidation through acquisitions or exits.We could also see the convergence of voice services over different delivery methods.
Jola’s Merrills said, “We will continue to see all-IP delivery impacting traditional voice services, digital migration of landline services and the convergence of mobile solutions.
“We will also see new products overlayed onto these delivery mechanisms. I expect to see the convergence of voice services over multiple delivery methods increase over the next year or two, defining new revenue streams for the channel.”
AI impact
The march of AI will also make its mark on the voice market, and this could have wide-reaching benefits for businesses looking to make efficiencies or improve the customer experience.
PXC’s Simmonds said, “Looking ahead to the next five years, CCaaS and AI-driven solutions are expected to dominate partners’ go-to-market strategies. As companies increasingly shift traditional telephony queries to webchat or virtual bots, customer interaction is already undergoing a significant transformation.
“This trend is likely to accelerate, with CCaaS and AI driving higher efficiency and elevating the customer experience. The continued innovation in feature-rich solutions and open API integrations will further reshape how organisations operate, enabling them to meet the demands of the modern workplace more effectively.”
McKindland, from Sona Business, also pointed to AI as a key force in driving the continued evolution of the market. He said, “The market will continue to mature.
“There won’t be many ground-breaking changes over the next 12 months but definitely within five years there will be much greater integration with other apps and connectivity services plus AI.
“It’s about giving partners more power in terms of being able to offer their own dedicated bespoke services such as call bundles and contact centre solutions in a pain-free way. Creating a compelling menu of services in a very easy format. In five years’ time a reseller will become a virtual service provider offering a very broad and diverse mix of technologies.”
The retirement of the PSTN and the withdrawal of WLR services will also be significant. Howson, from Evolve IP, said, “The push-back on the PSTN switch-off has definitely muddied the waters but the route of an all-IP world remains unchanged. AI and IoT integration are shaping the market.
“There’s a lot more sophisticated technology around a voice call now such as transcription and live translations, which are becoming more popular in a fully connected world.”
Howson expects this could speed up the adoption of soft phones. He said, “Whilst there will always be people wanting to pick up a physical phone the transition to soft phones will continue.”Howson emphasised added the scale of the transitions that some organisation are now undertaking.
He explained, “We have one client currently moving 1,700 seats to soft phones. Flexibility and individual choice remain in a fluid work from anywhere world. That said, a desk phone has more specific requirements and is still relevant in a niche or specialist scenario.”
Change and opportunity
These market changes mean change too for resellers and MSPs, and there have never been more options at their fingertips.
Evolve IP’s Howson pointed out the key questions channel companies should be asking. He said, “Resellers need to have a much bigger kit bag today. But to stand out in an increasingly competitive market boils down to delivering value-added services. More access to technology means the competition is far higher.
“Training and development are also crucial: Are they up to speed with their skills? Are their customers ready to adopt it? Do they have the right partners? It’s important to pick the right partner for the long as well as short term. It’s a complicated, fast-moving market with more options and choices than ever before.”
This is a market in transition, but channel companies and their customers have an opportunity to shape the solutions they are provided with. Merrills, from Jola, said, “With change comes opportunity. This has proven to be the case time and time again. The PSTN switch-off provided a way for resellers to increase recurring revenue and cut costs, providing a hardware refresh and upsell of other services like mobile connectivity over traditional fixed-line solutions.
“MSPs greatly benefited from the pandemic and changes in working habits, where Zoom and Teams opened up a new way of communicating, and a new way of using traditional phone systems.
“We will see many benefits over the next 12 months, as the channel adopts new products and services in addition to their core business. The wholesale market is driven by demand and end-user businesses who define the problems the channel ultimately solves.”
Merrills added that the key areas to watch will be how voice and mobile converge in an all-IP era and how that ties into traditional working practise, like on-prem and hosted phone systems.
He emphasised, “Wholesale voice will provide a key route to delivering these services.”There could also be opportunity for channel companies to diversify their revenue streams.
McKindland, from Sona Business, said, “Continual market changes are all designed to create more revenue, market opportunities and extra customer loyalty and stickiness.
“For example, more flexibility with connectivity contract terms can now be 30 days which is great for a partner as they have more agility and freedom to maximise value and profit potential. Creating a menu of chargeable services gives them the ability to build better and bigger revenue streams.”
The opportunity is for resellers and MSPs to work with their customer base to help them upgrade their communications solutions so their organisation can continue to thrive in the all-IP era. Simmonds, from PXC, said, “While the range of options may narrow, the products available to resellers and MSPs will be increasingly feature-rich and enhanced with AI capabilities.
“The transition from legacy voice systems to VoIP presents a significant opportunity for resellers to capitalise as end customers are compelled to upgrade their communications solutions.”
As with any market in transition, educating your customers will be critical to success. Simmonds explained, “AI is transforming traditional workflows, with most vendors now incorporating AI prominently across their product offerings. This shift provides resellers and MSPs with a unique opportunity to educate customers on the benefits of AI in the modern workplace.
“By focusing on how AI can enhance organisational efficiency and employee productivity, they can create a compelling narrative that moves beyond traditional voice-centric discussions.”
Moving beyond traditional voice services will mean resellers and MSPs are providing their customers with the right communications solutions for their needs. There have never been more options, and the Channel can be the guiding light for businesses across the UK.
This market report appeared in our September 2024 print issue. You can read the magazine in full here.