The State of Business Communications 2024 - Part Two

Part Two of our blog exploring the trends that will shape the business communications industry in 2024. If you haven't already seen Part One, check it out now.

Introduction

In part one of this blog we presented some industry expert forecasts of the unified communications and CPaaS (Communications Platform as a Service) markets, and discussed the key drivers for growth, including the blurring lines between UCaaS and CCaaS, the shift to software-first solutions, and the role of AI

In part two, we turn our attention to the impact of the PSTN switch-off, including how MSPs can best position themselves to meet customer needs. We also discuss the expanding role of AI in telecoms, and how UC vendors are implementing AI into their collective roadmaps.

Implications of the PSTN Switch-Off

There is no doubt that the impending 2025 Public Switched Telephone Network (PSTN) switch-off, now only one year away, is a significant development for any businesses relying on the PSTN to deliver their voice services, be they analogue or ISDN. But our belief is that other PSTN-based services will cause more issues for those late movers, while offering the most opportunity for resellers with the right solutions within their portfolio. 

The great customer divide

The implications of the PSTN switch-off for vendors and resellers of unified communications are yet to be fully realised, but a clear divide exists between those who have prepared and those who continue to postpone their transition.

In our recent partner community roundtable session, Flotek Group CEO told us, “We’ve been talking about this for many years, but some customers seem to think 2025 will just never happen.”

Clearly, for these customers there is still educational work to be done, but Ball went on say, “Most customers at least understand what will happen when the PSTN is shut down. They understand it, and they're no longer pushing back. I think it's getting close enough now for them just to realise they have to do something about it.”

The opportunity for channel resellers

The degree to which the PSTN switch-off can be deemed either a threat or an opportunity for a channel reseller depends on two main things. Firstly, how much of their base is reliant on PSTN technologies? And secondly, how suitable is their portfolio of solutions?

Those resellers whose base is predominantly reliant on newer technologies may see the PSTN Switch Off as solely an opportunity to win net-new business, Holler’s CTO Ian Jamieson told us, “We, as a business, have zero ISDN's connected. Everything is SIP-based.”, going on to say, “Although the sales guys do talk about it as the big switch off, when we look at the stats, we're like, we've got really nothing to switch off.”

Channel resellers with the right portfolio stand to benefit the most, especially within product areas such as door entry systems, lift systems, alarms, payment machines, and even some fax machines, which rely on a move to SOGEA (Single Order Generic Ethernet Access) or FTTP (Fibre to the Premises), and in some cases additional GSM (Global System for Mobile Communications) connectivity for resilience.

Automation is a key consideration for the PSTN switch-off. With potentially high volumes of customers that attract a traditionally low ARPU given the typically minimal feature requirements of a landline replacement service, deploying that solution quickly and efficiently is key. Channel resellers need a solution that is not only price competitive to a highly price sensitive market, they need one that customers can ultimately sign-up to and activate themselves. This means low tech on features for the end user, but high tech in how that solution can be deployed to them, with Open API frameworks key to delivering that.

The challenge of FTTP rollouts

Ultimately, the objective of the UK governments Department for Digital, Culture, Media & Sport (DCMS) is to deliver 100% gigabit-coverage to the UK, predominantly in the form of FTTP, with a minimum of 80% of the UK covered by 2025.

However, FTTP rollouts are being completed exchange-by-exchange, meaning that some areas will continue to have better coverage than others. In areas that are late to receive FTTP coverage, SOGEA may be the only option once the PSTN is switched off.

SOGEA uses the existing infrastructure that FTTC broadband does. As no new infrastructure is needed it means it can be deployed very quickly, with coverage already at around 95% of the UK.

However, for resellers this means being aware of the status of customer postcodes and building a trusted relationship to be in position to offer the best possible advice. McManus of GHM summed this up, telling us, “Delays on some exchanges for FTTP mean that some customers need to be upgraded to SOGEA, then when it is available you have to upgrade them again to FTTP to give the best service.

Then, it means you're having to have that conversation twice to say ‘actually, there's a better service available now’. That, for a customer, is going to be the hardest thing.”

The growing role of AI

It’s clear from how much has been written, that Artificial Intelligence (AI) is emerging as a pivotal feature in the UC landscape. Vendors across the unified communications market are all looking to ensure that AI features are incorporated within their feature-set, but can we expect rapid uptake by customers, and what kinds of features might we see more of? 

AI's rapid growth trajectory 

According to a recent survey, EY state that 65% of CEOs recognise that their organisation must invest in Generative AI, which refers to AI tools that are capable of generating text or multimedia responses to queries, to avoid giving their competitors a strategic advantage. Despite this, their data also suggests that 90% of organisations are still in the earliest stages of AI maturity, “running proofs of concept or developing capabilities in pockets.”

What this tells us is that while investment is already high in the AI space, it is still very much at an early stage in terms of industry lifecycle. Some market projections suggest that the global AI in telecommunication market that was valued at $1.2 billion in 2021 may reach $38.8 billion by 2031, a CAGR of 41.4% over a decade. This puts the growth that the industry has seen to date somewhat into perspective.

Key drivers for AI uptake

According to a recent study by Infotech Research Group, AI will receive the most investment of any emerging technologies by businesses this year. While 35% of organisations said they have already invested in it, 44% plan to invest in it this year.

65% of respondents for the study listed the main driver for this adoption of AI as analytics for business intelligence. We have seen a surge in demand for our advanced call recording and analytics solution, CallCabinet, that certainly supports this thesis.

Close behind, 63% of respondents said they will use AI to automate repetitive and low-level tasks. This refers predominantly to the use of conversational AI to power chatbots and virtual assistants.

Both drivers support the growing demand of customers for personalised service, on their terms. A recent GetFeedback survey found that 73% of businesses plan to use AI to personalise their service.

What both use cases have in common is that they rely on an AI technology called natural language processing, that can transcribe human interactions with great accuracy, as well as interpreting both emotions and the intent of the language used. We also make use of natural language processing to power our text-to-speech, and voicemail transcription features in CallSwitch One. This technology can also help chatbots or virtual assistants to provide answers, or refer an enquiry to the correct agent, in response to keywords or phrases.

Because of this, customers are more accepting than ever before when dealing with chatbots. Research by Zendesk suggests that when well executed, 65% of customers actually prefer using a chatbot than interacting with a customer service agent to help them answer simple questions. With speed of response identified as the leading indicator of CSAT score, it is easy to see why this is vital for businesses to get right.

Balancing 'cutting-edge' with maturity

Despite the above, amid these transformative trends, some customers will continue to prioritise cost-effectiveness, so the emphasis on achieving a balance between advanced features and budget considerations remains crucial. Service providers and vendors who can offer innovative solutions at competitive prices are likely to attract a significant share of the market.

Ball, CEO of Flotek Group said, “As much as I think AI and other new features are coming in, and we have got customers who are driven by that, most people are very, very price conscious. More than we've seen since the last major recession, which is understandable.”

Another important thing for business leaders to consider before incorporating any new technology into their communications toolkit, is the level of trust they can place in the solution they choose. These are business-critical, and highly visible services, so ensuring they are reliable and class-leading is vital.

A good example of how we offer advanced AI capabilities, through mature and trusted solutions is our close technical partnership with specialist compliance and analytics call recording provider CallCabinet. Call Cabinet have 12 years of experience delivering cloud-native, AI-driven call recording, with military grade encryption and voice analytics delivered to thousands of global customers.

Customers can obtain CallCabinet at point of purchase with their CallSwitch One licencing, with seamless out-the-box integration included at no additional cost. This means through one purchase they get specialised and mature solutions for both unified communications and AI-driven call recording for compliance and analytics – with a single point of contact. 

Conclusions

The business communications market is growing and evolving at a rapid pace, driven by technological advancements, changing business needs, and the imperative for efficient communication systems. In 2024, we expect this trend to continue, with cloud-native SaaS solutions leading the way.

The CallSwitch One roadmap will support our assumptions around the blurring of lines between UCaaS and CCaaS, the continued growth of CPaaS demand in the form of open API-based integrations and features, and a paradigm shift that sees business communications placed by many businesses as a part of their broader IT and tech-stack.

As businesses navigate the complexities of the PSTN switch-off we continue to see a marked shift between those who are prepared, and those who continue to turn a blind eye. We believe the channel is best-placed to educate and support, and we plan to continue to provide educational and customer-centric material for partners in this area.

More businesses will embrace the potential of AI, and again, the role of education and customer-focused solutions will become increasingly critical. All UC vendors should be considering ways to implement AI into their services. We already rely on AI technologies in our call recording and analytics solutions, and within our text-to-speech and transcription tools for CallSwitch One, but we will look to expand this functionality as part of a continually developing roadmap.

To learn more about how CallSwitch One can support managed service providers of IT and telecommunications, check out our partnership opportunities, or read more of our reseller-focused blogs.