Many customers have asked us over the years whether they really need fixed line telephony, but what started as a “blue sky” question five years ago is an increasingly common topic of discussion. Through this white paper, TNC tackles this topic head on – what does it mean to go “landline free”, why are organisations considering it, does it save money, and what costs and benefits can it deliver?
At first glance, there are lots of drivers that seem to support an organisation going landline free:
- Landline usage is declining. For example, recent stats have shown that time spent on landline business calls has declined from 38bn minutes in 2010 to 19bn minutes in 2017
- Many users find that they are using other communications media instead of landlines - mobile phones are one obvious alternative
- Even on mobile phones, voice usage is declining in favour of text messaging, WhatsApp, IM, and migration to OTT applications such as Skype for Business
- Changing working practices, including hotdesking, and more agile working, means users are often not at their desks, and therefore are unlikely to be using their desk phones
Given that landline telephony is a significant cost for many organisations, and is often another system and supplier to manage, it is easy to see why there would be great interest in simply turning landlines off.
The question is whether it really is simple, feasible and attractive.
Let’s tackle some terminology first because there appears to be lots of different terms being used in discussions on this topic. Often, when organisations are talking about “going landline free”, what they really mean is dispensing with desk phones, e.g. the lump of grey plastic with buttons and a handset that may be gracing your workspace right now.
In other words, often “going landline free” really means having far fewer lumps of plastic on desks, and replacing them with other technologies. Of course, organisations also acknowledge that there will still be phone handsets required for specific use cases e.g. reception, security, conference rooms etc. So, the term we really should be using to describe that approach is “going physical phone light” – there would still be some physical phones in that model, just fewer.
The second terminology question is around the “landlines” themselves. As probably everyone reading this white paper knows, there has been a massive shift away from delivering voice over traditional telephony lines (e.g. PSTN, ISDN) and converging it with data traffic using technologies such as SIP, VoIP and Unified Communications (UC).
Therefore, what organisations typically mean by “going landline free” is moving away from using dedicated voice lines to deliver voice connectivity. Again, as with desk phones, most organisations will still need to retain some dedicated voice lines for back-up, for smaller sites, where their WAN isn’t of sufficient calibre to carry voice traffic etc., so again the term should be “going landline light” rather than “going landline free”.
Cutting through the terminology therefore, despite talk of “going landline free”, almost all sizeable organisations are still facilitating voice communications for their employees – they are simply doing this in different ways than desk phones and traditional voice connections. As we’ve noted in previous white papers, TNC is seeing a big uptick in deployments of cloud-based telephony solutions, and sizeable movements towards use of soft phones, or mobiles as the primary user interface.
The concept of “going landline free” is generally cover for a more complex activity – what it really means is significantly reducing the deployment of desk phones and traditional voice connections, and deploying a mix of alternative technologies to provide a more functional, collaborative solution for employees.
The short answer is that it hugely depends on what else you have to do to enable your change. Clearly, removing traditional voice connectivity will directly cut costs, and not having to buy desk phones will avoid costs in the future. However, if you also need to deploy VoIP or UC, upgrade your WAN to support this new traffic, cover the costs of additional call traffic on your mobile estate, purchase headsets to enable soft phone utilisation etc., these are also real costs that will reduce potential cost savings.
It is also worth noting that the alternative solutions to replace desk phones are generally more functional, but also often more expensive. One of the reasons for the declining use of desk phones is the low functionality, and the wider functionality of smart phones, UC solutions etc. is attractive to users. However, that is also reflected in the price – generally delivering a desk phone connection is relatively cheap compared to the cost of a UC connection, or purchasing a smart phone. In other words, the oft-held belief that traditional voice solutions are expensive and therefore organisations can save money by replacing them isn’t always true in reality.
TNC’s experience and research also highlights how this change in infrastructure also leads to a change in cost profile. Many of the costs of traditional telephony solutions are capex (e.g. buying PBXs, buying handsets), with relatively low opex (e.g. circuit rental and usage costs). By contrast, the cost profile for most VoIP, UC and mobility services is very low capex but much higher opex. This has two implications – firstly, many organisations like to keep opex as low as possible and may not welcome this change, and secondly, it is important to track the business case over a longer period to get a genuine view on cost effectiveness: over a short term e.g. three years, the costs may not be much different, but with opex costs continuing indefinitely, over 5-7 years, the capex model may start to look considerably cheaper.
It may well be that the real driver for “going landline light” isn’t cost savings but delivering a wider set of benefits. Delivering more functional services that make it easier for employees to collaborate, work remotely, communicate more effectively and efficiently, and be more accessible to colleagues and customers is likely to deliver productivity benefits. For example, it could improve employee engagement and enable an organisation to achieve its wider business strategy e.g. reduce its real estate footprint, reduce travel costs, reduce carbon footprint, deliver new ways of working, get closer to customers etc.
However achieving these objectives isn’t necessarily easy, even when leveraging the latest technologies. For example, many organisations talk of moving to a “mobile first” model where most voice communication migrates to mobile telephony rather than using any flavour of landline. Such a model certainly has its attractions, including:
- Potential to reduce number of suppliers
- Potential to reduce run rate costs e.g. by removing PSTN, ISDN and PBX costs
- Lower maintenance/replacement costs
- Quicker to fit out new offices
- Encourages hot desking
- Encourages mobility of work force
But there are also costs and risks to bear in mind with such an approach:
- Call quality on mobiles tends to be lower than on landlines
- Many organisations intend to use Wi-Fi to carry calls to address coverage and cost questions, but many corporate Wi-Fi provisions lack the quality, coverage and throughput to achieve this
- Without using Wi-Fi, organisations may experience coverage issues at certain sites
- Lack of resilience for voice – many organisations consider fixed and mobile services as a back-up to each other, so removing one decreases resilience
- Some employees may not have mobiles – possible increase in mobile run rate costs and one offs
- Mobile services may not deliver all functionality e.g. hunt groups, call transfers, conference calling, PA/manager call handling etc.
- Need to ensure that mobile call costs are comparable to your fixed voice rates (especially international, cross net mobile etc.)
- Improved call quality
- Increased functionality e.g. video, collaboration, presence, IM
- Single platform that can bring together collaboration, communication, application integration across multiple platforms e.g. PC, tablet, mobile etc.
- Encourages hot desking
- Encourages mobility of work force
- Encourages collaboration
However, there are of course costs and risks to consider:
- VoIP and UC don’t necessarily deliver the full functionality of traditional telephony, particularly when delivered from the cloud
- Opex model can make the long-term costs prohibitive compared to capex/opex approaches
- Need to ensure the WAN and LAN infrastructure has the functionality and headroom to support the full solution set, particularly video
It certainly is the finding of TNC’s research that this wider set of drivers are what organisations are pursuing when they are reviewing their provision of voice connectivity – they aren’t pursuing an ideological objective such as “going landline free”, but instead focusing on how they can enable their people to be as productive as possible, and they are embracing technologies that enable them to do that. When viewed through that prism, it becomes startlingly clear why legacy technologies like desk phones and traditional voice connectivity aredeclining, and also why end users are moving away from traditional voice communications to embrace video, UC, mobility and greater collaboration.
This may not fit into a soundbite as simple as “going landline free”, but it is the strategy that is likely to deliver the most productive, functional and business-aligned telephony solution.
If you’d like to talk to TNC’s experts on how you can harness the right technologies, partner with the right suppliers, and secure the best-fit services for your future voice requirements, we’d be delighted to talk with you
Other than matters relating to The Network Collective, this research is based on current public information that we consider reliable. Opinions expressed may change without notice and may differ from views set out in other documents created by The Network Collective. The above information is provided for informational purposes only and without any obligation, whether contractual or otherwise. No warranty or representation is made as to the correctness, completeness and accuracy of the information given or the assessments made.
This research does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice.
No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of The Network Collective Limited © 2019
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