How the desire for truly unified communications is transforming the telecoms industry

Telephony is old and boring. Right? Wrong! That might have been true five years ago but, today, post-pandemic, the telecoms industry is in the midst of another – and perhaps its final – major transformation.

At the onset of the COVID-19 outbreak, social distancing and work-from-home mandates forced enterprises to think and work very differently. This shift fundamentally changed the way multinational businesses operate today. Employees are now far more likely to work from home, remotely or in a hybrid setup than solely in the office.

The draw of seamless communication

The virtualisation of telephony through cloud technology is something that most companies have already implemented to some extent. And if they haven't already, they're almost certainly thinking about it. In today's global business landscape, seamless communications, regardless of physical location, are more critical than ever.

 While many larger enterprises have been slower to adopt cloud telephony - having often invested heavily in on-premises equipment – it is rare to find a small or medium enterprise (SME) today where phone numbers don't travel with people rather than being fixed to a desk in an office.

 By 2034, it is estimated that over 75% of businesses will use cloud-based rather than on-premises-based telephony services[1], with the market expected to grow from $23.2 billion in 2024 to $42.7 billion by 2032[2]. 

The first iteration of cloud telephony

Several years ago – pre-pandemic – network giants such as BT, Gamma, Colt, AT&T, Verizon and Lumen Technologies first started offering cloud-based services. This was the first iteration of cloud telephony. The on-premises Private Branch Exchange (PBX) infrastructure that businesses used to handle calls was replaced by servers in the cloud as part of the carrier's technology and network. This led to the virtualisation of calls that could be received wherever the user had an internet connection, as opposed to a physical location in the office dictated by a Public Switched Telephone Network (PSTN).

This marked the beginning of the end of phone calls coming into a building, being routed to a desk, and that being the only place they ring.

Around the same time, we started to see collaboration tools take off too.

The dawn of Microsoft Teams

With around 320 million active daily users[3], Microsoft Teams is by far the market-leading collaboration tool today, particularly amongst larger multinational companies. Following previous iterations with OCS, Lync and Skype for Business, Microsoft Teams came to the fore pre-COVID-19, and certainly enduring the pandemic, as the Unified Communications (UC) platform of choice, allowing organisations and their workforces to function in both remote and hybrid settings.

 In fact, Teams is Microsoft's fastest-growing business app in the company's history[4]. The pandemic was the catalyst for the platform achieving mainstream adoption. At the time (in 2020), the CEO Satya Nadella said, "We have seen two years' worth of digital transformation in two months".[5]

The unification gap in Unified Communications

The gap in the major UC platforms, such as Microsoft Teams, Cisco's WebEx, and Zoom, is that telecoms is a separate implementation.

What many multinational businesses fail to realise is that something must be done additionally and separately from simply investing in a UC platform to deliver truly unified communications. With an out-of-the-box Microsoft solution, for example, it's not possible to make or receive a call to or from a mobile or business phone directly to or from Teams – far from unified.

It's this demand for a more seamless model that supports telephony, audio/video conferencing, messaging and collaboration, that has led to another big restructuring within the telecoms industry in a relatively short time frame.

Telephony has not only migrated to the cloud, but it's now being integrated with UC platforms. With the integration of telecoms into Microsoft Teams, for example, if you have a business phone, the experience of making and receiving calls to and from all numbers is fully incorporated… fully unified.

The limitations of geographically defined telcos

Riding this wave, the likes of BT, Gamma, Colt, AT&T, Verizon and Lumen Technologies are all part of Microsoft's Operator Connect partnership programme - an operator-managed service that allows external phone calls to and from Teams. While this cannibalises their own cloud telephony solutions to some extent, it allows them to integrate their telecom capabilities with Microsoft Teams.

But, for enterprises, there are limitations to working with these telco giants, particularly when it comes to global organisations. Their legacy was laying copper wire into buildings to deliver telephony. While network provision, i.e. broadband with peripheral services on top, has replaced telephony as carriers' primary business, their core asset of fibre and network is still very much a physical business. And, as such, they remain largely geographically defined, whereas enterprises, on the other hand, are scaling at a multinational level.

The attraction of multinational consolidation

So where does that leave multinational enterprises who are still dealing with the perceived reality of managing an international patchwork of multiple in-country carriers, contracts, tariffs, equipment and services, and the prohibitive complexity that comes with it? These multinational businesses are naturally keen to consolidate how they buy and manage telephony integrated with UC platforms, such as Microsoft Teams, globally.​ Why would they choose to continue managing telephony disparately and locally when they are now managing their primary Teams communications set-up centrally and globally? 

With the advent of single vendor service providers capable of deploying, delivering and supporting telephony anywhere in the world - all integrated with Teams - multinational customers benefit from the equipment-free implementation of Teams cloud telephony. They can also achieve this with one global contract, one global management portal, one global tariff, and one global support team.

For the enterprise, the cost savings and operational efficiencies are compelling, and for the end users the communications are, finally, truly unified.