Rising Demand for IP Telephony

The Asia-Pacific enterprise telephony market continues to see sustainable growth on the back of a high uptake in IP-based solutions which offer a giant step forward in improving business communications.

New analysis from Frost & Sullivan (http://www.enterprisecommunications.frost.com), Asia Pacific Enterprise Telephony Market, finds that the market - covering 14 Asia-Pacific countries - earned revenues of close to US$2.73 billion in 2007 and estimates this to reach nearly US$4.1 billion by end-2014, at a CAGR (compound annual growth rate) of six percent (2007-2014).

IP telephony (IP-PBX) alone accounted for 53.9 percent (US$1.47 billion) of the total revenues in 2007. The remaining 46.1 percent is split between KTS (key telephone system) - 18.5 percent, PBX (private branch exchange) - 25.7 percent, and WPBX (wireless PBX) - 1.9 percent.

By end-2008, the Asia-Pac enterprise telephony market is forecasted to grow by 9.4 percent (year-on-year) to reach revenues of about US$2.98 billion - IP telephony is expected to account for 59.2 percent (US$1.76 billion) of this.

If you are interested in a virtual brochure, which provides service providers, vendors/manufacturers, end users, and other industry participants with an overview of the Asia-Pacific enterprise telephony market, then send an e-mail to Sarah Lourdes at sarah.lourdes@frost.com, with your full name, company name, title, telephone number, fax number, and e-mail address. Upon receipt of the above information, an overview will be sent to you by e-mail.

Bridging present-day enterprise communication needs through the use of next-generation applications that enable convenience, cost savings and enhanced productivity has been the main thrust driving IP deployments.

“Businesses, especially those in the more advanced markets, are investing in IP telephony solutions and upgrades that can be embedded or integrated with UC (unified communications) applications,” says Frost & Sullivan senior industry analyst Shailendra Soni.

He adds that in the developed countries such as Australia, Singapore and New Zealand, IP telephony sales already account for about 60 percent and upwards of the local telephony revenues, with the BFSI (banking, financial services and insurance) sector being the biggest adopters.

“Tools such as presence, unified messaging and peer-to-peer technologies that ride on IP systems have been some of the reasons for the early deployments, and will likely continue to drive wider adoption of IP telephony,” he says.

Soni notes however that in the developing nations, conventional TDM (time-division multiplexing) systems still dominate the enterprise telephony market, although he believes that IP telephony will likely gain increasing traction in these countries.

The biggest challenge towards quicker and larger-scale uptake of IP telephony is the issue of legacy equipment. He says, “Asia-Pacific has a very large amount of legacy TDM-based infrastructure, making it difficult and costly, particularly for SMBs (small and medium businesses), to upgrade or replace the existing systems.

“IP telephony deployment typically involves a greater amount of vendor services such as network assessment and network optimisation, further slowing down the adoption curve,” adds Soni.

Telephony equipment vendors are as such adopting open standards and offering solutions that are backward compatible with legacy equipment to facilitate the migration towards next-generation networks.

Targeting the huge SMB segment - which accounted for over 53 percent (US$1.45 billion) of the region’s telephony revenues last year, but is still a segment that remains largely untapped - vendors have begun to offer peer-to-peer telephony and solutions customised for small- to mid-size operations.

According to Soni, SMBs are more inclined towards such bundled offerings, hybrid telephony and managed telephony solutions given their limited budgets and the need for more immediate ROI (return on investment).

Large businesses with bigger budgets on the other hand are more likely to deploy a mix of IP-enabled and pure-IP-based solutions.

The Asia Pacific Enterprise Telephony Market study is part of the Enterprise Communications Growth Partnership Service program, which also includes research in the following markets: enterprise telephony quarterly trackers and managed telephony services. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Analyst interviews are available to the press.

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