What is the digital switchover, and why does it matter to small businesses?

The UK’s Public Switched Telephone Network (PSTN) is its analog telecommunications platform, which used to connect phones and other devices across the country through underground copper wires. It’s due to be shut down soon and replaced with more modern and fit-for-purpose infrastructure.

This digital switchover will bring a number of benefits to small businesses, most notably providing much more reliable and scalable communications that aren’t reliant on outdated, legacy technology.

By January 31, 2027, the UK will use a completely digital phone network through Internet Protocol (IP) technology. This will see all phone lines and equipment that uses them route signals digitally, rather than over the traditional system.

The digital switchover isn’t just about changing to new systems for the sake of adopting the latest and greatest technology. It’s also about shoring up network resilience and future-proofing business systems.

Central to this issue is the fact that the current PSTN network is slowly crumbling and often fails to work entirely during adverse weather conditions. In its 2024 Connected Nations report, the Office of Communications (Ofcom) recorded a 45% increase in the number of reported PSTN incidents.

“Managing customer migrations from analogue to digital as quickly and smoothly as possible, while making the necessary provisions for those customers with additional needs, including telecare users, is critically important,” Howard Watson, chief security and networks officer at BT Group, said in May 2024 when the digital switchover deadline was extended.

He added: “The urgency for switching customers onto digital services grows by the day because the 40-year-old analogue landline technology is increasingly fragile.”

IP technology doesn’t suffer the same downtime, ensuring businesses can rely on it for more stable operations – and because it operates using the internet, it unlocks far more capabilities and scalability for business-critical devices.

The benefits of IP systems over legacy kit

One of the main benefits of IP technology, as stated above, is improved reliability. Because these systems leverage the same fibre network used to deliver fast broadband to businesses, they require far less operational oversight and, in the event anything goes wrong, can be easily fixed by network technicians.

This is compared to copper wires, which are no longer fixed or replaced by Openreach. In short, any business still reliant on the outdated PSTN network is at constant risk of having devices cut off entirely without warning, whether from inclement weather or wire failure.

Many leaders will be looking to maintain their phone systems first and foremost, as this is a crucial function of day-to-day operations and often the primary channel for customers to engage with their business.

Cloud telephony is the first port of call here, a technology that converts analog phone signals into data that can be transmitted over the internet via a voice over IP (VoIP) service.

This is much cheaper to run and manage, as there’s no longer a need to rent separate phone lines, pay for phone maintenance, or pay extra for features such as a Private Branch Exchange (PBX) for each site you operate. Small businesses only pay for the features they need with VoIP.

BT’s Cloud Voice combines all systems under one platform, with a single access point and just one bill to track. The solution comes with call analytics and reporting tools to unlock more value from every call.

The service also allows small businesses to connect their existing work phones with employee mobile devices. This allows businesses to route, forward, and record calls and ensure workers stay connected to customers even when they’re away from their desks.

For example, John Hilton Estate Agents uses the service to open a new office using the same telephone number, as well as to employ remote and hybrid workers.

“We decided to switch over to IP technology fairly early on to try and future-proof the business,” said Marius Foster, the estate agent’s director.

“One of the benefits of the IP technology for us is that we have opened up another office. It does mean that we can all operate from the same telephone number. IP technology has allowed us to employ people from a bit further afield. Basically, we can work anywhere. We can work from home as long as we’ve got an internet point. It’s definitely given us flexibility and more efficiency within the business.”

EBC Group estimates that in total, businesses can save around 50% of their total line rental cost with VoIP, compared to legacy systems.

The digital switchover will also render Asymmetric Digital Subscriber Line (ADSL) and Fiber-to-the-Cabinet (FTTC) broadband inoperable, driving more businesses to adopt full-fiber broadband, 5G, and satellite connectivity.

Small businesses will be able to use these faster, more reliable connections to use tools that require more bandwidth – such as video calls and smart devices – as well as to improve the office experience for employees.

When is the digital switchover?

The deadline to switch is 31 January 2027, as after this point, the UK’s PSTN will cease to function altogether. But small businesses should work to adopt IP technology as soon as possible if they haven’t already started, to give themselves as much time as they need to bed in new systems and train employees with them.

BT recommends switching as soon as possible to embrace the savings of IP technology and avoid running into problems closer to the deadline that could jeopardize existing systems.

Every week spent using IP systems is also a week of cost savings, improved reliability, and better insight into customer data. With this in mind, it benefits any small business to take the plunge on an early digital switchover, far ahead of the deadline.

Any leader of a small business looking for advice can reach out to their service provider for more information – some, such as BT, offer professional services such as audits of the current PSTN kit to prevent any unwanted difficulties when the digital switchover is finally complete.