PSTN User Perspectives on IP Communications
IndustryView | 2014

Over the past decade, many enterprises have jettisoned traditional voice services and phone systems in favor of Voice over Internet Protocol (VoIP) communications, leading to widespread pronouncements of the death of the Public Switched Telephone Network (PSTN). However, the FCC reports that current business adoption of VoIP is only at 15 percent. In this report, business users who still rely on PSTN connections will learn how to get the benefits of traditional voice services they need from VoIP systems—as well as a host of unique benefits.

Key Findings:

  1. Twenty-five percent of the PSTN users we surveyed said they would consider using VoIP service to save money on their phone bills.
  2.  
  3. Thirty-five percent of Integrated Services Digital Network (ISDN) users said they would consider VoIP for savings, and 28 percent would consider it for scalability.
  4.  
  5. The greatest percentage of respondents (31 percent) said the PSTN continues to serve a purpose as an emergency backup measure in disaster scenarios.

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Introduction

We conducted a survey of businesses still relying on PSTN connections to find out what their communications priorities were. Our survey targeted owners and decision-makers—employees who help with purchases of software, network services and IT services. We included businesses with analog lines as well as digital PSTN connections, such as ISDN (a technology for transmitting multimedia data over the PSTN rather than over the Internet).

We focused on this sample in order to determine which benefits of VoIP provide the most compelling reasons for PSTN-dependent businesses to consider using IP communications. We also wanted to find out whether the PSTN can still play a role in VoIP networking as a backup or “failover” mechanism for businesses that prioritize uninterrupted service.

There are many ways in which companies can get the same benefits they’ve come to rely on with voice service—plus additional functionality and substantial cost-savings—by either replacing PSTN service with a dedicated VoIP solution, or using a system that combines the two.

VoIP’s Low Prices, Mobile Support Are Top Draws for PSTN Users

We first asked decision-makers to select (from a list we provided) which benefits of VoIP would most likely lead them to consider using the service. Respondents identified the lower costs associated with SIP trunking (a network service that connects calls to and from VoIP systems with the PSTN) as the primary reason why they’d consider exploring VoIP solutions.

Primary Draws of VoIP for PSTN Users

Primary Draws of VoIP for PSTN Users

Overall, 25 percent of the PSTN subscribers we surveyed reported that they’d consider using VoIP service to save on monthly phone bills. This finding indicates a high level of acceptance of VoIP solutions, even among entrenched PSTN users.

We can see that PSTN users were also interested in the out-of-the-box compatibility with mobile devices offered by most VoIP solutions. Whereas the roots of the PSTN pre-date our mobile-centric society by more than a century, mobile devices and IP networks have matured together. Contemporary VoIP systems thus have far more extensive mobile functionality than phone systems designed for the PSTN.

Moreover, VoIP systems offer features that aren’t available in older phone systems (e.g., displaying presence information across multiple devices). Twenty percent of our respondents expressed a willingness to consider VoIP solutions in order to expand the functionality of their phone systems.

PSTN users were also interested in the easy scalability of VoIP systems: 19 percent of our sample said that a convincing benefit of VoIP was that there would be no need to add new trunk lines to accommodate new employees.

ISDN Users Appreciate Cost-Savings, Scalability of VoIP

PSTN services fall into two major categories: analog and digital. Analog service, also known as POTS (for Plain Old Telephone Service), is the oldest method of transmitting signals over the phone network.

ISDN connections, which gained traction in the early 1990s, can carry both voice and data (including real-time multimedia), enabling services such as videoconferencing that can’t be practically supported through the transmission of analog signals. While ISDN service is both digital and multimedia, it differs from VoIP in that data is still sent over the PSTN, rather than over the Internet.

ISDN users were also more likely to appreciate the cost-savings offered by VoIP service. The following chart breaks our sample down into POTS and ISDN users, and compares the percentages of each group that expressed an interest in the generally lower costs associated with VoIP systems.

PSTN Connections of Users Who Would Consider VoIP for Cost-Savings

PSTN Connections of Users Who Would Consider VoIP for Cost-Savings

Thirty-five percent of ISDN subscribers would consider adopting a VoIP solution to save money, whereas only 21 percent of the POTS subscribers we surveyed were interested in this benefit of VoIP service. This discrepancy is primarily due to the fact that digital ISDN connections cost significantly more than analog POTS service.

We also calculated the percentage of respondents in each group who expressed an interest in the scalability of VoIP solutions. The following chart shows our results:

PSTN Connections of Users Who Would Consider VoIP for Scalability

PSTN Connections of Users Who Would Consider VoIP for Scalability

ISDN users were much more likely than POTS users to consider VoIP solutions in order to ease the process of scaling their phone systems when adding new employees. Twice as many ISDN users (28 percent) as POTS users (14 percent) were interested in this benefit of VoIP.

This discrepancy is likely due to the fact that the Primary Rate Interface (PRI) trunks used for ISDN service have a fixed number of channels per trunk (23 in North America). These channels divide up the bandwidth on a physical line to provide extensions to employees or to transmit data to applications and devices. If a business uses up all the channels on a trunk, it will have to pay for a second trunk if another employee is hired or another fax machine is purchased—even if the other channels on the new trunk remain unused.

With the SIP trunks used in VoIP systems, however, the business only pays for either the maximum number of simultaneous calls that it typically needs (in port-based pricing models), or for the number of users who need access to the service (in user-based models). Businesses thereby avoid the problem of paying for unused capacity. (For more information, see our full explanation of the differences between PRI and SIP trunking.)

Given all this, businesses with ISDN service are more likely to understand the need for easily scalable solutions than those with analog POTS service. (In most cases, businesses with POTS service are also smaller, and thus may be less concerned with scalability.)

Outage Concerns, Ease of Use Top Reasons Businesses Rely on PSTN

If so many respondents in our sample were interested in the benefits of VoIP service, then why were they still utilizing PSTN service? Asking them turned up some interesting results.

Top Reasons Users Choose PSTN Over VoIP

Top Reasons Users Choose PSTN Over VoIP

The top reason selected by our sample was that PSTN systems are “easier to use” (cited by 30 percent). However, we can infer that, in most cases, these respondents are probably just more familiar with PSTN systems. After all, analog PBXs require specialized technicians to service them, just as VoIP systems do—but finding parts and qualified technicians for these systems is increasingly problematic, as vendors and service providers are beginning to phase analog and even ISDN solutions out.

Conversely, IP PBXs and hosted PBXs have been around for over a decade, and developers have made huge strides in simplifying these systems for end users. And a whole consulting industry has emerged to help businesses implement and maintain VoIP systems.

Almost as many respondents (25 percent) said they were sticking with PSTN connections to avoid service interruptions as those who said that they were relying on the PSTN for ease of use. Because the PSTN began to evolve before the country was fully wired for electricity, and because analog POTS signals are transmitted through the PSTN as electrical current rather than as digital packets, POTS lines can supply power to phones and remain in service even during an electrical outage. VoIP systems do not offer this benefit; however, users can explore battery backup solutions known as uninterruptible power supplies.

Eran Gal, chief executive officer and co-founder of Xorcom (a vendor of IP PBX hardware supporting both VoIP and PSTN connectivity), explains that users may also want to consider T1 lines for ISDN service as a backup in failover scenarios.

“T1 would be the best alternative [to VoIP], as it is digital, which is superior to analog in reliability and quality,” he says.

Surprisingly, only 9 percent of our respondents said they weren’t using a VoIP system because they weren’t sure what the technology was or how it works. This implies that businesses are finally getting up to speed on the details of IP phone systems, even if they might not yet understand the business value of VoIP solutions.

Uninterrupted Service a Priority for PSTN Subscribers

In order to better understand why respondents were sticking with PSTN connections, we asked them how important uninterrupted service was to their business models. There are many ways to avoid service interruptions with VoIP systems, but we inferred that PSTN users might not be familiar with these solutions.

We found that the business models of the majority of our respondents demanded that the phones keep ringing:

Importance of Uninterrupted Service to Business Model

Importance of Uninterrupted Service to Business Model

Nearly 40 percent of our respondents said that uninterrupted phone service was an absolute necessity for the daily operations of their business, and over one-quarter (27 percent) said it was “very important.”

Businesses that prioritize uninterrupted service don’t need to be tethered to their landlines when evaluating phone systems, though many may assume that this is the case. In case of a wide area network outage (or “WAN” outage, meaning the loss of connectivity to the public Internet), businesses with hosted VoIP solutions can simply have their provider route calls to other phones (including mobile devices).

Another way to survive WAN outages is to invest in an on-premise IP PBX with backup PSTN connectivity. That way, calls can simply be sent over the PSTN if the business loses its Internet connection. The business still saves money, since in most cases, it cheaply makes and receives calls through the SIP trunking provider, and only pays higher rates for POTS or ISDN service in failover scenarios. This kind of setup offers the reliability of traditional voice service along with the savings and flexibility of VoIP service. Many providers offer both SIP trunking and ISDN services, which also simplifies billing and support for businesses.

Gal notes that “being connected to more than one provider, via more than one medium, is good practice,” but he cautions that “this policy has its cost, so the business has to perform risk management and then make a decision.”

In addition to providing reliability, Gal observes that hybrid solutions can save businesses money in many situations, as businesses “can use both the existing infrastructure and new technologies seamlessly.”

He gives an interesting example: “A hotel with 400 analog phones in its rooms, with all the cabling in place, may easily change its office phones to modern VoIP technology with all its benefits, but keep all the room phones, thus realizing substantial savings.”

PSTN Users View Network’s Future as a Backup Mechanism

In order to further understand our respondents’ perceptions of the role of the PSTN in a technological ecosystem increasingly dominated by IP communications, we asked them why a business that uses VoIP or cellular service might also need a PSTN connection.

Perceptions of PSTN’s Role as Supplement to VoIP/Cellular

Perceptions of PSTN’s Role as Supplement to VoIP/Cellular

According to our respondents, the top reason to utilize a PSTN connection in addition to a business VoIP system or cell phones was the need for emergency backup in disaster scenarios. Since many IP PBXs offer PSTN connectivity, businesses that are concerned about this possibility can look for solutions that support the kinds of backup connections most suitable for their needs.

Businesses also placed a high premium on the perceived reliability of the PSTN for services such as 911. A complex set of regulations governs a system known as “enhanced” or “E-911,” which is designed to ensure that 911 callers’ locations can be easily pinpointed. This requirement becomes much more complex when calls travel over the Internet rather than the PSTN. These businesses should thus evaluate the numerous VoIP solutions that offer out-of-the-box compliance with E-911 regulations.

Finally, 24 percent of our sample said that the PSTN still served a purpose as a supplement to cellular and VoIP solutions in areas of the country where broadband Internet and cellular coverage is spotty. This role will, of course, diminish as providers work to expand their network infrastructure to serve such areas. (Indeed, this stands in contrast to the mere 7 percent of respondents who reported using PSTN connections because of a lack of reliable Internet service in their area, noted earlier in this report.)

Conclusions

Our major finding was that other than mere familiarity, reliability concerns are the primary reason why businesses still depend on the PSTN. Decision-makers from the businesses we surveyed were interested in both the savings and the scalability offered by VoIP solutions—particularly those businesses with ISDN rather than POTS connections.

While decision-makers appreciated the expanded functionality and mobile compatibility that VoIP systems offer, they worried that such systems were less reliable than the PSTN for emergency and disaster scenarios. However, VoIP systems designed to eliminate these worries are already available, such as hosted PBX solutions with emergency routing to mobile devices.

Additionally, businesses concerned with maintaining constant voice service (64 percent of our sample) could evaluate hybrid on-premise IP PBXs, which offer PSTN connectivity as a backup mechanism for emergency situations in addition to the typically lower rates on local and long distance calls available via SIP trunking.

By taking these steps, businesses can help to ensure that their VoIP systems afford them the same reliability they’ve come to appreciate with PSTN service.

Methodology

To find the data in this report, we conducted a two-day online survey of six questions, and gathered 161 responses from random business decision-makers with PSTN connections within the United States. All survey questionnaires undergo an internal peer review process to ensure clarity in wording.

Sources attributed and products referenced in this article may or may not represent partner vendors of Software Advice, but vendor status is never used as a basis for selection. Interview sources are chosen for their expertise on the subject matter, and software choices are selected based on popularity and relevance.

Expert commentary solely represents the views of the individual. Chart values are rounded to the nearest whole number.

If you have comments or would like to obtain access to any of the charts above, please contact danielharris@softwareadvice.com.


Daniel Harris

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