Speaking at Westminster Forum

Simon Woodhead

Simon Woodhead

7th December 2021

By Simon Woodhead

I had the pleasure of speaking to Parliamentarians at the Westminster Forum today, on all things Wholesale IP Voice, but specifically on IP migration. I was also asked to Chair a few sessions which was a great opportunity to raise some pertinent issues close to my heart with key industry decision makers.

The transcript of my panel address is below:

Good morning. 

I’ve been asked to Chair this session but am also a panelist. We’re dealing with IP migration, which is a wide topic and means different things to different stakeholders and is thus quite broad. I propose giving my own opening remarks and then inviting the other panelists to give their views before turning to Q&A. I’m pretty confident we’re going to have a wide spectrum of views here.

I’m Founder and was CEO of Simwood, a disruptive telco’s telco offering the component infrastructure telco’s need in the IP Voice space – for example we host 4,000 odd blocks of numbers on our network for other telcos, both fixed and mobile. I’ll come back to the ‘was CEO’ part later because it is relevant.

Twenty-five years ago this industry was so exciting to me. The Internet was gaining acceptance, mobile phones that didn’t need their own trailer were starting to appear, and nobody had heard of Peppa Pig. Even a spotty Herbert like me could play in this space. For someone entrepreneurial to be able to start a business unconstrained and add value was fantastic. For someone of an engineering bent to be able to build solutions and see them make a real-world difference was incredible. Thousands trod a similar path and the UK led the world. I was proud to be British.

I’m here to talk about the great IP migration which is somewhat amusing. 20 years after we exclusively adopted IP Voice in my businesses, and 16 years after we began selling it via our value chain to early adopters, I feel a sense of bemusement that we’re here. On the face of it BT has just woken up to realise it is 2021 and we apparently all need to jump, again. Many providers moved to IP in their core and interconnects wherever possible years ago. Where it wasn’t possible was facing BT and we’re pleased that is finally happening. I’d like to look at the consumer end of things though – the so-called PSTN switch-off – because I expect that is most relevant to your Constituents. 

Let’s be clear, amongst them, those who want IP Voice already have it and have had for many years. The carrot of improved quality, price and features won them over. COVID pushed many others to seek out flexibility and business-saving economics. Those who are left are those for whom the carrot isn’t enough – amongst them the reservoirs that will lose their monitoring, the emergency phones at level crossings that won’t work because they have no power, and older people who have only just got used to dialling with a keypad rather than a rotary handset. In fact on that note, you may wish to familiarise yourselves with the ‘Grannies vs BT’ class action over landline pricing, where BT’s defence that it’d have been cheaper if you had broadband too doesn’t seem to be landing too well.

Don’t get me wrong, I love IP, but I loved it 20 years ago and BT playing catch-up does not get me excited. On the contrary, I’d suggest the upside to the wider population is behind us and this is now about managing cost and disruption, for example educating an entire generation to not switch everything off at the wall when they go to bed. Arguably, for many of those applications remaining the plain old phone system was pretty perfect.

I haven’t had a traditional voice line in 20 years, millennials don’t know what one is, and we now have a plethora of apps that deliver a superior service for those who want it. They can’t dial 999 but Ofcom says that’s ok, as long as the phone nobody uses can. 

So what has changed and what is this really about? This is the end-game of what, for me, started in 2012. That is when Ofcom first indicated they were taking away 86% of our revenue on inbound calls to gift to BT. At that point I described Ofcom as the single greatest threat to our business, above terrorism and even above BT. And they’ve made me look positively clairvoyant since!

We highlighted then that in a stroke they would not only take away a massive amount of our income and gift BT a windfall, but crucially that they would be taxing competition by consequence. This change, and a compensatory change we proposed but Ofcom refused to make, means that to this day my business loses money on every call to every number it has ever won from BT, as do others. All the foretold and avoidable consequence of a single Ofcom decision 9 years ago.

I’d suggest that pretty much every decision since has further greased the pole in BT’s favour. 

Then there is the Huawei debacle, where most sensible networks didn’t touch the stuff however cheap it was, but now the consumer needs to wait an entire capital cycle for BT to partly rid itself of it, at no penalty. 

Meanwhile, in an exercise in double standards, “IP Migration” could see up to 200 billion minutes a year of voice traffic over the public Internet unencrypted – BT don’t support encryption on their wholesale IP platform and they also make it very hard for peer operators to diversely connect in other ways. Not impossible – we do it – but hard and expensive, hence I refer to a greasing of the pole. We also warned Ofcom of this; although in this case they did defer to Parliament and the (now) Telecommunications Security Act. We await the Act’s operative instruments but we have some faith that the gaping hole in national security may get at least partly filled by DCMS. 

Lastly, there was one hope for true infrastructure based competition in this country, in the form of alternative networks building full fibre where BT had failed to finish the job. After years of having the begging bowl out, BT has now decided that it actually needs to cut its prices by 30% and offer its own loyalty scheme to resellers to encourage take-up of fibre. In my mind, the biggest impediment to the take up of fibre is the damn stuff existing in the first place, and this change greatly undermines the business case for altnets! Ofcom disagree. 

You’ll be told of course, when Ofcom next mark their own homework, that BT only have 30% market share but remember their “competitors” in much of the other 70% are at some level simply resellers, not competitors at all. As a thought experiment, picture waking up to learn Openreach had been sold to the Chinese and how that might change your outlook. I’d welcome that at some level because at least I would have confidence that every future decision would be made in a different way. I do not have that confidence today.

I’m not saying Ofcom are complicit by the way, but that is a very easy accusation to make, one I hear often, and I can see where those who make it find justification. I don’t even think they’re incompetent – there’s some very capable people with decades in post and some were in industry before that. What I do think they are is misguided, and that they refuse to see the bigger picture or place due weight on important input. This causes the industry to lurch from unintended consequence to unintended consequence, whilst the ratchet of re-monopolisation clicks a few more notches in the process.  

Somewhere between your expression of ‘commander’s intent’ and the bullets being fired there is a massive disconnect over what the mission is. It isn’t too late, there’s still time for a radical change of course, but metaphorically the car is doing 70 and the cliff is 50 yards in front of us! But remember, Ofcom will tell you that based on their analysis gravity doesn’t apply here.

I mentioned I ‘was’ CEO of Simwood. I stepped down a few months ago. My daughter’s health was a massive factor in that, I can’t blame BT and Ofcom entirely. However, if you love what you do, you make it work, and it provides respite. But I don’t love this industry as it is today, and aspects of it shake me to the core. I do love the technology and the consumers deeply though, so I remain available to put the cat amongst the pigeons wherever helpful and provide insight hard-won over 25 years. We first need a regulatory environment more inclined to listen however.

Thank you.

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