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The state of PSTN connectivity: Separating PSTN from UCaaS

UCaaS isn't for everybody. Some organizations are keeping their phone systems on premises to maintain control over PSTN access, cut licensing costs and ensure service reliability.

Enterprise communications has undergone a profound transformation over the last several years as video meetings have largely replaced conference calls and as many organizations have moved from on-premises private branch exchanges, or PBXs, to unified communications as a service, or UCaaS. However, on-premises calling platforms and self-managed PSTN connectivity still play an important, if not a growing role, in the enterprise communications and collaboration landscape.

UCaaS isn't always the answer

The use of on-premises calling platforms has largely remained unchanged over the last year, according to Metrigy's "Workplace Collaboration: 2023-24" global study of 440 organizations. Nearly 32% of participants use them for their calling needs. Of those still on premises, just over 25% plan to move to the cloud in the next few years. Why are these companies bucking the UCaaS trend? It's largely due to costs.

A company running a fully depreciated and paid-for on-premises calling platform may not want to incur additional costs for licenses for UCaaS, even if doing so may reduce operational time and costs. Other factors also come into play, including 36% of organizations who view their on-premises platforms as more reliable than cloud services -- some of which only guarantee four-nines availability.

Additionally, some companies prefer to maintain control of the security of their calling platforms and to more easily integrate on-premises calling applications with contact center and other business apps. Some companies also prefer a private-hosted platform, which offers many of the benefits of on premises coupled with the ability to outsource day-to-day management and switch to subscription pricing.

Separating UCaaS and PSTN connectivity

For those that have moved or are moving to UCaaS, many still retain their own public switched telephone network (PSTN) services using bring your own carrier (BYOC) options where available. For example, of those in our study using Microsoft Teams Phone System for calling, just 9.8% get PSTN access directly from Microsoft's Teams Calling Plan.

The rest obtain PSTN access through Direct Routing or Operator Connect, which enables organizations to access the PSTN through third-party carriers. Among other UCaaS providers, BYOC adoption is low, but we expect it to continue to climb as larger companies embrace UCaaS.

Like the decision to stay on premises, choosing to purchase PSTN access separate from a UCaaS service often boils down to cost. About 70% of participants who buy separate Session Initiation Protocol trunking services with UCaaS said cost savings is the top reason for choosing to separate PSTN connectivity from UCaaS. Additional adoption drivers include the following:

  • Phone number control. Maintaining separate PSTN access services enables companies to avoid porting their phone numbers to their UCaaS provider. This is especially useful if the organization is concerned about the ability of UCaaS providers to deliver a high-quality service or to accelerate adoption time by eliminating number porting. It's also useful if a company is still maintaining multiple calling platforms or separate contact center applications.
  • Supporting existing telecom contracts. Some companies, especially larger ones, may have long-term PSTN access contracts they must maintain, which requires separating PSTN access from UCaaS.
  • Geographic availability. Some UCaaS providers may be limited in the number of countries where they can provide local PSTN access. Using a separate PSTN access provider may increase geographic reach.
  • Resiliency. If the UCaaS provider has an outage, then all phone services cease to work. However, if using a separate PSTN access provider, along with remote site survivability solutions, companies may be able to continue to place and receive phone calls even when there's a UCaaS outage.
The state of the PSTN

How to decide what's best?

Choosing to stay on premises or move to the cloud, and how to connect to the PSTN if moving to the cloud, is a complex set of decisions. IT leaders should evaluate a variety of factors, including cost, feature and integration needs, reliability and security when comparing on-premises and cloud services. If moving to UCaaS, consider cost, geographic reach, existing contracts and resiliency to guide your decision between obtaining PSTN access from your UCaaS provider or buying it separately. Understand that in all cases it is possible to mix and match, potentially using a combination of on premises and cloud based on user need, cost and flexibility.

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