Case Studies


Waterstones books £750,000 savings through IP telephone system upgrade

The Client:

Founded in 1982, Waterstones is the UK’s leading bookseller with a retail estate of 285 bookstores and complementary online presence through

The UK’s last remaining national bookshop chain, it has shrugged off the perceived threat of e-readers and online and continues to expand through new, relocated and refreshed stores. Headquartered in central London, the company also boasts a major logistics operation in Burton-on-Trent, Birmingham offices and a Northampton data centre.

The Challenge:

Waterstones was suffering from high telephony costs due to the complex and outdated structure of its existing network.

Each of the retailer’s stores operated its own telephone system, connected to leased ISDN2 and ISDN30 lines. These were not standardised with a variety of telephone systems deployed across the estate, each reliant upon external maintenance and support which required individual site visits.

This network was therefore complex and costly to maintain, with outdated technology unable to deliver the responsiveness, flexibility and features synonymous with IP and VoIP telephony.

“The motivation to upgrade was obviously cost” explains Waterstones’ IT services manager, Matt Langner. “We had 285 stores out there, each with its own telephone system, with no central management. It was extremely high cost through both our leased line provider and incumbent suppliers.”

He also saw a potential route to lower cost telephony through the retailer’s existing MPLS enabled WAN to which all its stores were already connected.

“We thought as we had the network in store that was hardly used for computing, why not use it for the ‘phones?”

“We knew Pennine so they were the people we turned to discuss a solution. We needed a switch capable of handling about 2,000 extensions and they came up with an offering for us.”

… Pennine sales and support teams were absolutely fantastic


The Solution:

Acting as independent expert consultants, Pennine worked with Langner’s team to fully understand both the challenges Waterstones faced and the opportunities presented by its existing IT infrastructure.

The company’s engineering team then designed a bespoke solution which would utilise otherwise redundant capacity on the WAN to deliver VoIP telephony over the existing data links serving each store.

This solution would see introduction of a centralised IP telephone system which would be significantly easier – and cheaper – to manage than the disparate network of PBXs it would replace.

With the existing network not only generating expensive line charges but creating redundant circuits, Pennine also recommended centralising SIP trunks. This would increase efficiency and reduce cost, with five stores able to share eight SIP trunks compared to ten leased ISDN lines.

The upgrade would also allow standardisation of handsets, with Pennine specifying Yealink’s T19P across the retail estate and T41Ps for back office operations. CP920 conferencing units were also recommended for executive use.

Having accepted the solution on paper Waterstones then took up Pennine’s suggestion of running a limited proof of concept project to test its viability and benefits.

“The proof of concept ran across ten stores with 100 extensions available. We launched it in October 2016 and let it run over Christmas just to see how it would go,” reports Langner.

“What that showed us quite obviously was that cost was greatly reduced. It also demonstrated call quality and how many concurrent calls we were making, which wasn’t many.” The latter was pertinent in determining that the available bandwidth would support a VoIP network.

“The success of the proof of concept helped justify going forward with a bigger box and into more stores,” says Langner. “I then had to raise a business case, sit down with my board, explain the solution, how it would work and what the cost savings looked like.

“I projected we would save approximately between £120,000 and £150,000 a year.” Over the term of the five-year contract with Pennine this then would result in total net savings of as much as £750,000.

Binning both leased ISDN lines and disparate and increasingly redundant traditional telephone systems would account for much of those cost reductions.

“Every store had at least two phone lines for which we paid £10 a line per month. We had maintenance on top of that, ten telephone systems that cost £2,000 a year each, plus old telephone systems that were failing and couldn’t be replaced.

“It all added up.”

The Benefits:

With the Waterstones board signing off on the upgrade, kit was ordered and a phased roll-out began in May 2018. This ran so smoothly that it was completed just three months later.

This was in no small part to the service provided by Pennine from the outset. The company allocated Information Technology Infrastructure Library (ITIL) project managers and adopted PRINCE2 methodology to ensure a seamless transition.

“Pennine’s sales and support teams were absolutely fantastic and the senior engineer on the job has been very responsive and knows exactly what we’re talking about,” confirms Langner.

“They’ve all been brilliant.”

He’s clear too that the once theoretical cost savings are set to be realised and significantly exceed the average 40 percent savings that SIP trunks typically offer over ISDN.

Crucially, having worked hand-in-hand with Waterstones’ Compliance team, Pennine was able to deliver a solution that is fully Payment Card Industry (PCI) compliant. This means all calls are encrypted with the IP-PBX standing alone from Waterstones IT infrastructure to provide a ringfence.

“Pennine deployed a fully managed and encrypted solution, ensuring we couldn’t turn off the encryption or listen into the calls.

It also provides clear demarcation of responsibilities. If it’s a telephony issue, it’s a Pennine issue, with Waterstones benefiting from a guaranteed four-hour response to any significant service issue.

Pennine also designed the solution so that it offers outstanding resilience. This includes automatic failover between the main system at the Northampton datacentre and a back up in London. All the SIP accounts are similarly protected and set up with dual endpoints serving as active sites, so each offers stand-by resilience to the other.

Centralisation has also made life easier and more efficient. “Because it’s a centralised telephone switch any call between stores are now treated as ‘phoning an extension, so it’s free.

“We’ve got short dials for every store and are now looking at centralising an address book and speed dialling for things like credit card authorisations.”

It also means that the company no longer needs to pay for external engineers to visit stores, with many changes to the network now able to be implemented centrally.

In addition, Pennine incorporated an inclusive calls tariff with premium rate barring into the SIP trunk package, to deliver tighter cost control and value.

Langner acknowledges that there are further benefits yet to be realised, including introduction of voicemail and system reports. “I want to create a report so we can see which stores aren’t answering the ‘phones when they should be.

“There’s a whole new element we can move onto. The priority was simply to get the ‘phones in and running. Now we’ve got a centralised platform we can start building on and developing even further.”