It’s the end of an era for legacy telephony technologies, as 5G and XG wireless technologies introduce more speed and agility to business communications. But as companies grapple with upgrading their antiquated analog telecom services, they face many decisions. Learn about POTS lines, PSTN services, how much money companies can save in transitioning them, and the key considerations for designing a POTS migration strategy.
POTS stands for “Plain Old Telephone Service,” and much like the words describe, it’s an antiquated telephone service that uses legacy Public Switched Telephone Network (PSTN) infrastructure to enable phone calls.
POTS and PSTN are aging analog technologies that are being discontinued in favor of digital communications. In the U.K., the PSTN infrastructure is being permanently turned off in 2025 (more on the big switch-off later).
Think of POTS as the business equivalent of the traditional landline phone connections that were once prevalent inside residential homes. Just as homeowners are increasingly trading in their landlines for more modern digital voice technologies, companies are also modernizing their POTS line connections and PSTN services, namely upgrading to Voice over IP networks (VoIP).
The term PSTN is also used to refer to POTS lines, because POTS lines use PSTN infrastructure.
POTS lines use traditional copper cable wires and electrical currents to connect callers. Unlike today’s digital infrastructure supported by fiber optic cables, gigabits, and virtual technologies, POTS lines still rely on physical circuit-switching architectures. Their one key advantage stems from their analog technology – unlike digital technologies prone to network failures, they are resilient even in power outages.
POTS lines are still prevalent inside companies that have not yet updated their communications systems. Beyond just telephony, they are commonly used for alarm systems, elevators, and emergency-use phones to name just a few.
While the numbers are declining, there are still millions in operation. In fact, the Federal Communications Commission reports the number of POTS lines in the U.S. declined from 122 million in 2010 to 41 million in 2019.
Here at Tangoe, many of our clients are still working on their POTS migration plans. We are helping them manage or migrate about 325,000 POTS lines.
Newer technologies are replacing them, which can also mean they are no longer profitable for their providers. POTS lines are being retired, the same way 3G and 4G networking is being replaced by 5G wireless networks. When the majority of clients want the newest, fastest generation of services, it no longer makes financial or business sense for providers to continue to support legacy technologies for the few still hanging onto them. Demand is a core issue.
Companies are being strongly encouraged and, in some cases, forced by providers to upgrade.
In the U.S., the real pressure comes from telecom carriers increasing the price of their POTS line services – sometimes as much as $800 per line. According to the Bureau of Labor, POTS charge rates increased 36% from 2010 to 2021, even as mobile phone rates have declined. Learn more about POTS lines price increases. Providers are also bringing their maintenance and support services to an end or refusing to renew contracts, making it more difficult or impossible for customers to hold onto their lines.
It should also be noted that a U.S. federal mandate from the FCC spawned many misconceptions and scare tactics, giving clients the impression that there would be a full-scale decommissioning of POTS services by a deadline of August 2, 2022. That was not the case; nonetheless, the strong-arm tactics continue.
In the U.K. legacy Public Switched Telephone Network (PSTN) technology services are being turned off in 2025, forcing companies to migrate to new services, creating logistical challenges with a deadline and the implications of a strict cutover. The PSTN upgrade project is a national effort to transform the telecom industry. The vast majority of British businesses are on still dragging their heels in the PSTN upgrade with 77% of organizations having not yet prepared for the end date.
Sometimes, companies are pressured to modernize their telecommunications due to the changing times. Employees no longer use their desk phones like they did decades ago, and today’s mobile trends, hybrid work, and work-from-home business models generate a new and different set of business needs as well as a new level of user expectations.
In short, the biggest benefits of migrating from POTS lines to more modern telecom systems is time and money.
Perhaps the biggest gain is a superior user experience — unified communications platforms bring instant messaging, video conferencing capabilities, and voice services all into one platform helping to increase productivity for employee
At the end of the day, businesses investing in VoIP and cloud-based communications are getting rid of antiquated, labor-intensive, and expensive services in order to gain a superior service, more productivity and cost savings.
In most cases companies can lower their telecom costs due to the savings gained from switching to more affordable rates and avoiding the price hikes that are increasingly common with POTS services.
But results may vary.
Here at Tangoe we see companies save on average 15% to 30%.
The exact amount depends on the starting point. POTS line costs can vary widely, ranging from around $20 to $800+ per line per month (depending on the type, location, telecom carrier and whether the service is under contract or billed at tariff rates. If a company’s current costs are in the $20-$50 range savings may be less significant; however, if they are in the $100+/month range and they have a high quantity of lines, the savings can be quite substantial.
Results also depend on the number of POTS lines per location, as some POTS replacement solutions are designed for high-quantity discounts, so you can save more if you have 2 to 4 lines per location rather than a single POTS line.
Companies transitioning POTS lines should keep in mind these key considerations.
First and foremost, take a proactive approach to POTS replacement, planning for a digital alternative, knowing where your copper lines are (using a telecom inventory management approach), and understanding how service decommissioning is affecting you. Most importantly, know when your provider plans to sunset POTS offerings, so you can define the window of time you will have replace them – a proactive plan is far better than scrambling!
1- Build your business case, understanding the productivity and cost savings you can achieve – a professional cost-savings assessment can help you with this
2- Choose the type of technology you will upgrade to (SIP trunking, VoIP or unified cloud communications as a service, for example) and the specific solution you will standardize on
3- Evaluate your IT network, including the capacity of your infrastructure and your ability to support high-performance digital communications – network modernization plans can take a significant amount of time!
4- Establish a smooth migration plan that takes a phased approach but also transitions services without disrupting employee productivity and business continuity
5- Consider the resources, partners, and support you’ll need to make the migration a success
In the U.K., the digital telephone switchover should not be ignored, and the government’s new plan to invest £150M in 5G connectivity means that the country will more quickly be blanketed in high-speed connectivity even in remote areas. These upgrades will help make it increasingly easier for companies to transform their POTS lines to reliable digital alternatives at a time when pressures are on the rise.
Tangoe can assist companies both strategically and tactically execute and manage the transition of POTS lines. But more critically, Tangoe is the industry expert in understanding the alternatives available, helping IT and finance leaders pinpoint specifically how much they can save in a transition, based on our market price indexes and pricing intelligence gleaned from tracking $34B in IT spending. With a clearer view into your situation, Tangoe can then outline a plan for companies to execute internally – or better yet — Tangoe can do the work on your behalf.
Auditing POTS lines and telecom expense audits: Tangoe can conduct a thorough inventory of POTS, DSL, PBX and other telecom services, so companies have visibility into their needs and the impact of retiring services
PSTN or POTS cost-savings assessment: Tangoe is the leader in guiding companies through an evaluation of their current prices and comparing them to market-competitive pricing for POTS alternatives delivering high-performance reliability and resilience
Negotiating new telecom service contracts: With 60 cost-management consultants, Tangoe negotiates more than 400 IT service contracts for clients every year, achieving cost savings via provider consolidation, bulk or volume pricing discounts, and other strategies
Strategic and tactical plans to transition POTS lines: From understanding the differences between migrating to SIP vs PRI vs UCaaS to building an end-to-end migration approach, Tangoe has experience in smoothing the bumps and disruptions in service known to occur with POTS technology upgrades
Staff Augmentation: When companies need more boots on the ground to turn their POTS plans into action, Tangoe can also support you
Ongoing cost optimization programs for telecom services: Tangoe’s core competency is in giving companies the AI-powered analytics and automated platforms they need for both reducing the long-term telecom costs and accelerating the financial management tasks associated with them
Learn more about Tangoe Advisory Services and our telecom cost management solutions
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