Based on postings here in the various RadioReference Forums and what appears to be the direction of the commercial/professional communications industry, is there any reason at all to even consider buying/building a P25 Phase I system? Are manufacturers even telling their customers they have a choice (Phase I or Phase 2), or is the message "It's all Phase 2 if you install new"? Has P25 Phase II arrived and become the de facto standard for all new P25 systems?
You need to define your question some to get a better answer. The FCC has stayed the requirement to narrow band the 700 MHz channels, so there is now no reason to go to P25 phase 2 on the 700 band.
The real reason for the P25 phase 2 was to provide additional channel capacity and be able to have what would basically be 2 conversations going within one RF carrier. If your agency is not strapped for the need to have additional channels, there is no need to spend the extra money for phase 2 radio equipment.
Again with my above statement, some but not all the radios being sold today have the ability to do phase 2. Most of them have the phase 2 ability in the radio, but it may not be activated by the version of firmware the radio was sold with. Bottom line here is the cost of having the radios do phase 2. If you don't need it, don't buy the feature.
Having slightly missed your main question about going to P25 phase one, let me try to continue. P25 phase one is basically adding digital to the mode of communications. Are you required to go digital, not really. Many of the federal grant money sources available (most are starting to dry up) have a statement in them that recommends going to a digital mode radio system. There are some advantages to going digital. Not all of them mean much to the average user. Most of these requirements state that the radios need to be P25 capable, but they don't say that you have to have that feature active in the radio.
The digital radio system allows for the user radio and the radio system to pass some information back and forth. You have the ability in some radios to do recovery of poor signals so it will error correct (if I can use this simple term) parts of the digital signal. This can extend the range a finite amount in low signal areas to some extent. It just won't drop off the end of the cliff when you get to the edge of the coverage areas like the first digital systems did with no warning.
You can purchase the option of over the air programming of the radios. This will save the time of having to bring the radio back to the shop for program channel changes. But the over the air programming is slow. You have the ability to send the radio ID and emergency notification without the annoying MDC data bursts that you had with an analog radio system. The quality of the voice audio can be a mixed blessing. Some people like it others hate it. Originally loud background noises covered up the voice audio. This has been corrected for the most part with the current family of radios and accessories.
The real choice depends what you want out of your radios and radio systems. Each agency and users have different requirements. If you look up the guidelines from NFPA, they recommend that fire ground operations stay analog. Having some 45 years under my belt around and with the fire service, i have to support this recommendation.
Bottom line here is it really depends on what your using the radio system for, how your using it and what the coverage requirements are. If you have very good coverage with your radio system, then digital would probably be just fine for you. If your always out on the distant ends of the coverage, the digital system is not a good choice. If your always inside large buildings with poor inside radio coverage, digital is probably a poor choice for your operations.