For those of you in smaller metropolitan areas or rural locations you may not know what an ILEC is, but you know who your local phone company is - and they are one and the same. Since I won’t do a better job than Wikipedia of providing a definition:
An incumbent local exchange carrier (ILEC), is a local telephone company which held the regional monopoly on landline service before the market was opened to competitive local exchange carriers, or the corporate successor of such a firm. In much of the United States, these were originally Bell System companies, although various regional independents (including GTE) in the US held incumbent monopolies in their respective regions.
Most of these businesses are still around, taking care of their customers, providing dial tone and service and broadband to the companies and families in their region. Sure, there is likely a cable company providing broadband and telephony in the area, but in most smaller markets that is about the extent of the competition for your business dollars. However, with the rapid movement to VoIP, the small and medium businesses in these regions now have a broad choice of services with a wide variety of features available for a competitive price from service providers all around the world. So what does this shift mean for the local telephone companies and their customers?
According to Dave Manfredo, the VP of Sales, Carrier Solutions at ANPI, a company that has been working with ILECs and CLECs (competitive local exchange carriers) for over 20 years, ILEC customers are looking for the same advanced communications and collaboration capabilities that every other company wants. “For most ILEC customers, enterprise (business) telephony service has traditionally been a PBX (Mitel or Avaya box) in a closet connected to the local telephone company. They may have had a different service for broadband, another for mobile, a conference call service, maybe a third-party web conferencing solution. They’ve been building out solutions piecemeal based on need and now these businesses are looking for convergence. That is why we are seeing a rapid movement towards hosted UC among these business users.
The Phone System is now the Phone Service with UCaaS
We have discussed here in the past the significant benefits of UCaaS for small and medium businesses. For many companies in these smaller markets thinking about making that move, the first call is to their local telephone company. According to Manfredo, “ILECs have been trusted business advisors in their communities when it comes to telephony for over a hundred years in some instances. As their customers look to move towards a unified communications solution, it is nice to have a local business you’ve known for a long time help you make that transition.”
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To deliver hosted UC services, ILECs are often private labeling UC platforms from companies like Broadsoft or ANPI to deliver a robust set of features to their customer base. “Hosted UC is a very different model for the end user. It provides a single solution for all major telephony services, from local and long distance calling, to voice, web and video conferencing, to IM and presence management. Having one company that you trust delivering these capabilities to you - and one throat to choke - means a lot to businesses in smaller markets.” Many ILECs can help their customers address the networking challenges related to hosted UC and also provide managed services to keep everything functioning at peak efficiency. This relationship can be especially important since the line between the telephone system (now UCaaS) and the telephone service (now UCaaS) essentially goes away. Businesses pay for broadband internet connection and all telephony, collaboration and billing for communications goes through the hosted UC provider.
Why ILECs Are Gaining Traction With Hosted UC
For many small and medium businesses, the move to hosted UC makes good business sense. The solution delivers a simplified, unified platform for all employees to collaborate on and for the company it delivers centralized billing and can deliver cost savings.
According to Manfredo, the reason that ILECs are starting to get so much grip with hosted UC really comes down to the local relationship. “ILECs can have the discussion with their customers that national providers struggle with. They can say, ‘we’re local, you know us, you trust us, let us help you,’ and that goes a long way. Especially when it comes to customer service.”
And offering UCaaS makes good sense for the ILECs too, says Manfredo. “Not only are they able to offer a powerful solution to their existing customer base and protect their business, but it also provides them with a solution they can leverage if they want to start expanding outside their traditional geographic region.”