Are business wired phones dead?

Business wired phones have been with us for more than a century; will we soon see them disappear? Everyone has a mobile phone, and many US households have ditched their traditional landline phones for mobile technology. Businesses on the other hand still seem to have an abundance of wired phones installed. Is there a good reason for this, or are we about to see these business wired phones disappear as well?

Moving from wired to wireless technology is a little more complicated for small business phone systems. There are forces driving change like the movement to digital or VoIP versus analog, but there are also reasons to be more cautious such as security and wireless bandwidth. The following is an overview the business considerations that will determine the future of wired phones.

Consumer Ditching Wired Phones for Mobile

Consumers are rapidly ditching their landline phones for mobile, a recent CDC survey found over 41% of households have moved in this direction. As of January 2014, 58% of Americans have a smartphone, 32% have an e-reader, 42% own a tablet, and 90% have a cell-phone.
landline households
The primary reasons consumers are moving away from wired phones are convenience and cost. Consumers like to take their mobile phones everywhere, with some never letting them leave their side. They don’t see the value in the traditional landline phone, and see their mobile number as their primary number.

The reason consumers have moved so aggressively away from landline phones does not translate directly to business. Businesses want to own any phone numbers used to contact customers, vendors, or other employees. This is important to ensure continuity should an employee leave. With Bring Your Own Device (BYOD) being the norm for mobile, businesses cling to the traditional phone system model as a means of keeping this control over the primary phone number.

Copper Phone Lines are Going Away

Another factor potentially driving change is the decaying and obsolescence of legacy copper Public Switch Telephone Network (PSTN). The PSTN provided the backbone of our national phone network for more than 100 years, but today it is rapidly being replaced.

wired phones
Telecom giants AT&T and Verizon have been lobbying states, one by one, to eliminate the Plain Old Telephone System (POTS). These two providers want to replace the POTS system with an Internet Protocol (IP) based system that could facilitate things like faster VoIP phone service.

AT&T and the FCC are beginning trials to explore the world without copper-wired landlines. The FCC wants to make sure all households will be able to reach 911, small businesses will not be disadvantaged, and people with medical and home alarms/alerts will be able to connect to the network reliably.

The reality is that POTS is going away; it is now only a question of when. This will force both consumers and businesses to move to IP telephony, but this doesn’t necessarily spell a change from wired phones to mobile.

The Movement to IP Telephony

The worldwide Voice over IP (VoIP) services market hit nearly $70 billion in 2014, fueled by growth in business VoIP services according to research firm Infonetics Research. Business VoiP now represents 38% of overall VoIP services revenue.
Hosted Business VoIP

Although VoIP technology was invented in the early 70’s, it didn’t achieve traction until the second half of the last decade. Driving factors in VoIP achieving momentum were the development of the SIP standard, the emergence of VoIP service providers, and the ramp up of the Asian equipment manufacturers. In reality, it took all these forces to achieve standardization, quality of service and cost advantages to get businesses to begin moving to VoIP.

The migration of business from POTS to IP alone doesn’t spell the end of the wired phone, and may actually be prolonging its stay. Business concern over wireless access and bandwidth has ensured the ongoing installation of wired phones. Businesses simply cannot afford to have voice traffic consuming all of their wireless bandwidth. This will change over time as wireless bandwidth continues to grow, but today best practice for VoIP is still wired phones.

Security

Besides consuming Wi-Fi bandwidth there is also a concern of security. Wireless phones create a whole new security layer that must be considered by IT departments. On Wi-Fi networks there is a trade-off between good security and call quality. Good enterprise security practices can protect against eavesdropping and unauthorized calls, but it also increases server demand, resulting in reduced call quality.

The question isn’t can I secure my wireless phone communications, but am I willing to dedicate the bandwidth and IT resources to deal with the security and call quality issues? This is another reason why businesses continue to rely on wired phones.

Mobile Bandwidth

The future of the business wired phone might be a softphone app on a smartphone. This is highly desirable because it allows for more business control over security than simply routing a phone call over a mobile network. When a call is routed over a mobile network, businesses have to rely on the carrier to manage part of the security. When a call is routed through a data network using a mobile app there can be much greater control over both security and quality.

Data traffic over mobile networks already exceeds voice traffic, so the Carriers are already trying to deal with the bandwidth issue. In reality, the Carriers are having a difficult time creating enough bandwidth to deal with the already growing demand. If business begins routing a significant amount of their voice traffic across mobile networks it could cripple the infrastructure. This is holding back what will likely become the future of small business phone systems.

Conclusion

The business wired phone is not dead yet, but it isn’t hard to envision a day soon when this changes. Wireless bandwidth continues to grow and security on both the server and device end continues to improve. The change from analog to VoIP is a catalyst causing businesses to rethink their voice communications; someday soon we will see the desk phone disappear and be replaced by an app on a smartphone. The technology exists today we simply need to see security software and bandwidth catch-up.

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