IP telephony accelerates in Asia Pacific

IP telephony accelerates in Asia Pacific

The Asia-Pacific enterprise telephony market continues to see sustainable growth on the back of a high uptake in IP-based solutions.

By end-2008, the Asia-Pacific enterprise telephony market is forecast 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).

This is according to a new analysis from Frost & Sullivan (Asia Pacific Enterprise Telephony Market). It found 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).

According to the research company's findings, 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.

Main thrusts behind IP deployments

The research firm noted that 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.

Challenges for Asian companies

While conventional TDM (time-division multiplexing) systems still dominate the enterprise telephony market in the developing nations, Soni 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.

According to Soni, SMBs are more inclined towards bundled offerings, hybrid telephony and managed telephony, whereas large businesses, with bigger budgets, are more likely to deploy a mix of IP-enabled and pure-IP-based solutions.

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