The French telecoms operator Orange has notified the country’s regulator, the Autorite de Regulation des Communications Electroniques et des Postes (ARCEP), and its rival providers that it intends to phase out its PSTN network due to its unsustainability. Although the operator has not specified a date for the switch-off, ARCEP has imposed a number of requirements to minimize the switch-off’s effect on the sector. As this legacy equipment becomes harder to maintain, operators around the world will start to consider phasing it out; discussions have already begun in countries such as Ireland, the UK, the US, and Germany.
Operators need to migrate away from PSTN in a timely manner to remain competitive and reduce costs
Orange’s PSTNnetwork is the backbone of traditional analog and digital telephone services, but is proving unsustainable for the business in the long term. In an effort to become more efficient, the operator is engaged in an upgrade program to migrate its networks to IP and in the process decide on the future of its legacy systems. The equipment designed for its legacy telephone network is starting to become obsolete, making it difficult to maintain and creating concerns that there could be service outages in the future. Orange has clarified that the shutdown does not include VoIP, leased-line services, or the copper-pair access network that provides broadband access.
In line with the outcome of its market review in 2014, ARCEP will not be opposing Orange’s desire to streamline its network. However, to minimize the effect on the market it will be imposing requirements that Orange gives at least five years’ notice of the shutdown of any part of the country and that it ensures the technological transition is carried out under fair and competitive terms. ARCEP will be holding a meeting on the matter on March 17, 2016.
Withdrawal of copper networks should coincide with NGA rollout to reduce the impact on customers
The PSTN switch-off is already happening in a number of countries, including the US (which plans to transition away from PSTN by 2020), Germany (which plans to migrate by 2018), and the UK (which intends to switch off the PSTN network by 2025). Recently there have also been talks in Ireland around decommissioning the copper network and a consultation was launched in January 2016. The Irish operator Eircom had previously stated its intention to replace its PSTN narrowband network with a managed voice-over-broadband service, which it could deliver as part of a broadband bundle. This has given rise to a consultation designed to assess the potential implications of such a transition from Eircom’s existing copper access network.
The operator currently requires the consent of the Irish telecoms regulator, the Commission for Communications Regulation (ComReg), to phase out its copper network.This is because it has an obligation in several regulated markets not to withdraw access to services and facilities already granted, as well as requirements under its universal service obligation. ComReg has signaled that to give its consent it will require a five-year notice period and for the withdrawal of the copper network to coincide with the rollout of National Broadband Plan services to reduce the impact on customers.
The decommissioning of copper networks remains a low priority for most operators. However, delaying this migration will be increasingly costly for providers, so it is likely to become an urgent issue over the next five years. As PSTN switching technologies approach the end of their life and VoIP costs decrease, fixed operators will need to transition from PSTN to IP-based networks to remain competitive and reduce costs. Newer forms of communication using IP-enabled applications and devices, which cannot be supported by PSTN, are increasing the pressure on providers to migrate customers to more competitive IP-based services. Such migrations can bring significant benefits if they are done in a timely manner and in combination with next-generation access upgrades.
Ireland (Country Regulation Overview), TE0007-000988 (February 2016)
France (Country Regulation Overview), TE0007-000870 (January 2015)
Sarah McBride, Analyst, Regulation