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4 Key Points to a Successful PSTN toAll-IP Transformation

Introduction
The evolution of the PSTN from TDM technology to IP is well underway. More and more service providers
are migrating to all-IP infrastructure, adopting IP as the technology of choice for providing business voiceservices. SIP trunking provides IP PBXs, unified communications (UC) solutions, and IP contact centerswith SIP voice connectivity. Taking into consideration factors such as end of life of the traditional TDM
switches, real-estate that is occupied by these switches and the potential for significant energy savings,
together with the need to compete with the growing popularity of SaaS and cloud services, operators
are moving towards a complete replacement of their legacy TDM networks with all-IP networks in aprocess that is also known as “All-IP Transformation”.
The migration of legacy TDM networks to all-IP is far from simple. In fact, it includes many complex
elements such as migrating the core network to IP, replacing customers’ on-premises equipment,
introducing new services to end-customers and more. In this paper, we will cover some of commercial
and technical challenges facing the fixed line operators who are planning to migrate their networks toall-IP, and we will offer some guidelines to help them to overcome these challenges.

Key Point 1: The Time is Right for All-IP Transformation
There is no denying that the world is moving to IP, and SIP is the de facto solution for business voice andUC connections.
The SIP trunking market grew 9% YoY in 1H19 to $4.1B with the majority of sales coming from North
America, and it is expected to continue solid worldwide growth over the next five years - the market willreach over $10.7B in CY23 with 70.2M trunks in service.1

Global SIP Trunks Market Size

While we are expecting continued growth in the number of SIP trunks in the coming years we willcontinue to see a significant decrease in the number of PSTN lines as users switch to mobile and VoIP
alternatives.

2

1. Source: IHS Markit, SIP Trunking Services: Annual Market Report: Regional, October 2019

4 Key Points for a Successful PSTN to All-IP Transformation

At the same time, the number of the TDM switches serving these PSTN lines will remain almost unchanged
as they will need to keep serving the remaining active PSTN lines. This means that the average numberof access lines handled per PSTN switch will decline sharply, increasing the cost per PSTN user.

All-IP Transformation Motivators

Key Point 2: Focus on Business Customers
Though one of the main triggers for operators to transition their PSTN networks to all-IP is the significant
decrease in the number of PSTN residential lines, they need to keep in mind that once they start thetransition process, it will cover 100% of their network - meaning it will also include their business lines.
It is critical for operators to focus on their business customers during the PSTN migration process because
business customers are far more sensitive to changes in voice services as they are critical to their ongoing business operations.
Moving to an all-IP network will enable operators to offer new, appealing and revenue-generating
services. The revenue potential from business customers using these services (such as cloud UC) isconsiderably higher than from residential customers.

Key Point 3: Ensure a Successful PSTN Migration Process
The PSTN to all-IP transformation process is far from being just a technology upgrade. It includes
significant challenges that the operators will need to face, such as migrating on a massive scale, ontime and on budget, and ensuring that the transformation has zero impact on existing services and end
users. A detailed description of some of these challenges can be found in a useful paper from Deutsche
Telekom covering their successful PSTN to All-IP transformation in Macedonia (http://www.ittoday.info/Excerpts/PSTN_Transformation.pdf).

3

4 Key Points for a Successful PSTN to All-IP Transformation

AudioCodes defines 5 key points that should be followed by the operator as part of the PSTN migration
process:

Cover AnyDeployment Scenario

Avoid Customer
ChurnOptimize
Migration TimeMinimize
Migration Costs

EnableCloud Services

Cover any Deployment Scenario
A key challenge of PSTN migration is migrating 100% of the network while providing solutions for any customer
type, size, or location that may be using existing telephony applications and services.
There are two models that can be deployed in such a migration. In the first model, a high capacity trunking
gateway, capable of handling multiple trunks is deployed on the service provider side. In the second model, theservice provider sends a technician to move the ISDN trunk over to the SIP trunk and puts a smaller, but dedicatedgateway at the customer site.

Smart CPE Migration Approach

CO Migration Approach•

The IP network ends at the customer’spremises•

The IP network ends in the exchange or in thebox near the customer’s premises•

New CPE has to be installed at the customersite•

A trunking gateway has to be installed at theCO or in the street cabinet•

The customer has to be informed when themigration is carried out•

•The customer can keep using their old PBXThe customer does not always have to be
informed when the migration is carriedout•

The customer can still use their old PBX

Avoid Customer Churn
The customer-based footprint is the greatest asset of the fixed-line provider. It is critical to minimize churn during
the migration process.

4•

Minimize business disruption during the migration process with a quick installation of the new devices•Improve quality of service (QoS) and quality of experience (QoE) with the new IP network

4 Key Points for a Successful PSTN to All-IP Transformation

Optimize Migration TimeReduce the migration time of a large-scale deployment•

Quick installation and configuration of on-site devices is made possible by using wide-ranging interoperability
devices, auto configuration wizards and zero touch provisioning•

Remote management tools enable remote configuration and installation of new applications while saving
costs of technician time and visits

Minimize Migration Costs
The migration process is long and complex and requires detailed cost planning.
•Reduce equipment and logistics costs by using a single provider•Reduce installation and engineering costs with a quick and easy deployment of the new devices, together
with holistic management that saves the costs of on-site technician time and visits

Enable Cloud Services
Once the all-IP network is in place, the operator will have the ability to offer additional revenue generating
services. These include new applications from the cloud, all the way up to a full migration to the cloud with hosted
unified communications services, all offering higher ARPU, improved differentiation and increased stickiness.

Key Point 4: Use Smart Cloud Transformation
The need to enhance collaboration among mobile and remote workers is the driving factor for the adoption of SIP
trunking services among businesses. This enables operators to bring forward new revenue.
During the PSTN migration process the operator will need to disconnect the SMB’s voice systems from the PSTN
and reconnect them to the IP network using on-premises or central office (CO) VoIP gateways, and their focus
should be on doing this with minimum customer disruption. Many of these businesses are still using on-premises
PBX systems today and even if they are connected to a new all-IP network, there will still be another phaseneeded to migrate these businesses to cloud-based services. This situation reflects a challenge that the operator
needs to face.
Moving an SMB customer to the cloud can be a complex task which includes replacing existing equipment such as
desk-phones, cables etc. This task will require sending a technician to the customer and can increase the cost of
the migration to the point where it will be higher than the potential revenue from this customer.

54 Key Points for a Successful PSTN to All-IP Transformation

Gradual Cloud Migration
The main concern that the operator needs to address during the migration from TDM to IP is ensuring that it isdone with minimal impact to the customer. If the operator deploys a smart CPE device to connect the customer
to the new all-IP network, the device now serves as a “foot in the door” that can be used to offer additional
cloud services. These new services can be offered in a gradual way where some applications are offered asenhancements in the first stage, increasing the stickiness of the SIP trunk. Then, the business can expand thenumber of extensions by adding virtual extensions from hosted/cloud UC platforms, together with enhanced
features such as mobile workers, collaboration, monitoring, quality enhancements and resiliency.

Using smart CPE devices will allow the operators to promote the cloud
advantages and to allay their customers‫ ׳‬fears of the cloud.
Modular Design
AudioCodes’ CPE unique modular design enables
remote installation of session border controllers(SBCs), gateways, and routing applications in the samedevice, as well as the activation of the most suitableconfiguration for the desired service. This unique design
enables fixed line operators to connect their customers
to their SIP trunking services quickly and with minimum
disruption, while being able to migrate those customers
to cloud services without a technician needing to visit
the customer and reinstall equipment.

AudioCodes CPEHybrid Solution
The AudioCodes hybrid CPE enables service providers tobenefit from a coexistence solution that merges the onpremises PBX and the new UC and hosted/cloud PBX intoa single telephony solution. This hybrid design paves theway for a gradual migration to hosted PBX services while
continuing to use the existing on-premises PBX system.
Hybrid IP PBXs remain the dominant line shipments,
representing 61% of all lines shipped in 4Q19
and 59% of lines shipped in CY19. Hybrid systems
appeal to businesses that want to continue using
existing TDM handsets rather than fully replacing
them, thereby minimizing upfront capital.
Source: Omdia - Enterprise UC and Voice Equipment Quarterly
Market Tracker: Q4 201964 Key Points for a Successful PSTN to All-IP Transformation

Resiliency
By deploying a CPE that has resiliency features such as survivability or dual WAN capability to access an alternative
WAN service, the voice network can continue to operate even if there is a problem with the data connection.
Resiliency features ensure that WAN connectivity continues either through a dual WAN or 3G/4G backup.

Multiple WAN Options

Conclusion
In this paper we have seen that the telecommunications market is going through a significant change as more andmore operators undertake their transformation from TDM networks to IP. There is no doubt that operators needa holistic plan to avoid confronting the looming issues of the end-of-life of PSTN infrastructure. If carried out ina pre-planned and controlled manner, PSTN migration can provide multiple benefits such as additional revenue
streams from cloud and IP services. We have highlighted several commercial and technical key factors that webelieve every operator should take into account as part of their journey to a successful all-IP transformation.

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