IP-based Next Generation Voice Services Set to Dominate the Asia Pacific Enterprise Voice Market

Frost: Although the next-generation enterprise voice (NGEV) services market in the Asia Pacific region comprises diverse countries with varying levels of adoption, the overall market in the region is experiencing strapping growth. With rapidly changing technology, cost pressures, improved productivity requirements as well as greater focus on core business, enterprises are increasingly viewing managed NGEV solutions more favorably.

Consequently, with burgeoning opportunities, Internet service providers (ISPs) as well as system integrators (SIs) and platform vendors are making a foray into the Asia Pacific NGEV services market, intensifying the competition for traditional carriers in the voice segment.

Revenues in this market - covering 13 major Asia Pacific economies - totaled USD114.7 million in 2005 and is forecasted to reach USD1.13 billion in 2011.

The Asia Pacific NGEV services market is at a relatively early stage of growth, and to harness the move by enterprises onto the IP telephony platform, an increasing number of operators are looking to offer such services.

The growth of the NGEV services market will be primarily driven by three factors. These include the growing demand for business voice services due to declining prices, increasing teledensity, and overall expansion of the economies of nations in the Asia Pacific region; migration of Centrex users; and the adoption of hosted telephony by new users, particularly the small and medium enterprises (SMEs).

The Centrex market is fairly saturated and is expected to be largely replaced by a solution that offers enhanced features and cost benefits. This will lead to a technology shift from Time Division Multiplexing (TDM) Centrex to IP-based NGEV services.

By 2011, we expect emerging IP-based NGEV services, including IP Centrex and managed IP PBX, to account for nearly 87 percent of the total enterprise voice market in Asia Pacific, up from a mere 15.7 percent in 2005,adds Baidya.

However, amidst this market expansion, traditional telecom carriers in the enterprise segment are facing increasing competition. Smaller, emerging service providers especially ISPs (Internet service providers) are targeting small- and medium-sized businesses by offering hosted telephony solutions.

Moreover, these solutions are frequently bundled with local calling capabilities, Internet access, a leased T1 line or DSL (Digital Subscriber Line), unified messaging, and selected business telephony features. Such bundled packages are offered at a flat monthly fee and represent a competitive alternative to purchasing all these capabilities from multiple vendors.

At the same time, platform vendors are also continuously enhancing their solutions by adding new features such as unified messaging, web-based service management, and conferencing, in order to be more competitive. Hence, given the intense competition, telecom carriers may need to forge strong relationships with equipment vendors and channel partners to offer co-branded services.

At this early stage of market development, NGEV service providers will need to build customer awareness, attract early adopters, and secure competitive market positioning. Strategic partnerships and alliances could facilitate better market penetration. Companies ought to focus on core competencies and find the most competitive position in the value chain.Analysis of Asia Pacific Next Generation Enterprise Voice Services Market

Publ 20060418