Next Generation Waves Break on the Conferencing Shores - A European Insight

Frost: The market for audio conferencing services in Europe is under threat from next-generation technologies and services, with audio service providers being forced to respond and adapt to the potential loss of a core revenue source. As a result, the provision of value-enhanced conferencing services will be vital to sustaining revenue generation.The European Audio Conferencing Service Provider Market earned revenues of $542.2 million in 2005 and estimates this to reach $712.6 million in 2010. The market's unremarkable compound annual revenue growth (CAGR) of 4.7 per cent masks significant volume growth rates and a marked divergence of business opportunity between reservationless and value-enhanced conferencing service types.

Under considerable threat from emerging next-generation products and services, European audio conferencing service providers are developing new strategies for growth and survival. The well-developed and rapidly maturing markets they service are attracting new participants such as software manufacturers, telecommunications equipment vendors, and network operators, all eager to stake a claim to the growing demand for conferencing and collaboration technologies.

Key strategic responses will centre on the development of VoIP-based applications for enterprise IP-PBX and VoIP-based hosted services at the network's edge. These will create direct and compelling alternatives to the near pervasive reservationless voice conferencing services. At the same time, efforts by major software companies to integrate common desktop applications into these infrastructures and services will present users with attractive routes to more effective business communications and business process-enhancing collaboration.

Even as the demand for reservationless audio conferencing continues to grow strongly in Europe, audio conferencing service providers are facing the combined threat of falling prices and an increased level of competition in their major markets from IP-PBX and new network-based value-added services.

Migrating existing service applications to pure-IP delivery platforms as well as identifying new vertical and business integration opportunities will be strategic imperatives for audio conferencing services providers. Total revenues for Europe from automated and reservationless voice conferencing services are set to decline after 2010 due to continuing commoditisation of pricing and the roll out of next-generation VoIP-based capacity.

To ensure future growth, audio conferencing service providers must actively move customers up the value chain by finding added ways to differentiate and enhance basic services, including vertical application specialisation, improving the quality of service, as well as expanding into new markets.

European Audio Conferencing Service Provider Market Publ 20060605