The global market for PBX, IP Centrex and Mobile PBX is developing quickly, and is expected to account for a majority of business lines by 2010. The development of these IP solutions will result in fundamental changes in corporate network architecture, according to a recent global study by Arthur D. Little.
The convergence of data and voice services have increased the flexibility and speed of communication for the business customer, and has resulted in growing demand for IP solutions. "From the corporate side, the market for IP-based solutions is driven by an increasing corporate focus on cost-savings, outsourcing and the impact, as well as the value, of an increasingly mobile workforce," states Dr. Karim Taga, Director of the TIME (Telecommunications, Information technology, Media and Electronics) practice at Arthur D. Little.
The development of IP solutions globally has varied by region; the greatest potential for IP-based systems has been seen in countries with high broadband penetration, intensive competition between fixed and mobile players and existing VoIP regulation. (Figure 1)
Source: Arthur D. Little analysis
Regardless of geography and current penetration, a majority of industry players have indicated high expectations regarding the development of business IP solutions. Based on Arthur D. Little's study, IP PBX will reach 23 percent, IP Centrex 20 percent and Mobile PBX 12 percent of total business lines by 2010.
The potential of IP solutions is already being addressed by all stakeholders, including equipment vendors, system integrators and value-added resellers, fixed and mobile operators, as well as the companies that invest into such systems, creating a variety of opportunities and challenges. More than 60 percent of enterprises will use VoIP solutions by 2010.
The equipment vendor market will continue to be highly competitive. Traditional vendors developed migration paths to IP for their existing client base and have already entered the Genuine IP market. Genuine IP PBX vendors have to focus on a particular market segments and smart partnering is key to success. Arthur D. Little expects further consolidation within the industry, as ties between TDM and Genuine IP vendors have to be strengthened.
System integrators and value added resellers will increasingly focus on medium to large enterprises, leaving smaller companies to be served by telecom operators. They have the opportunity to enlarge their client portfolio with new vertical IP PBX solutions and provide maintenance and migration to IP contracts to their existing client base. However, they need to intensify their partnerships with vendors due to higher complexity in sales process and increased demand for customized solutions.
Among operators, the battle for the business customer has intensified with IP Centrex and Mobile PBX solutions. More than 70 percent of enterprises are projected to outsource their voice services completely or in parts. Alternative operators are the most aggressive, offering attractive bundles and attacking the incumbent's existing business client base. Incumbents are slow to offer IP solutions, as they are concerned about cannibalizing their traditional TDM services. Until 2010 all mobile operators within our study will address the enterprises market with Mobile PBX solutions and provide options of completely substituting the current fixed-line infrastructure of a company.
"Companies which are looking to invest into an IP solution face the greatest challenges." continues Mr. Taga. There are a wide variety of options available to companies today, and there are difficult decisions to be made in terms of technology (TDM vs. Hybrid vs. IP solutions), the operating model (in-house vs. outsourcing), as well as an array of companies offering hosted telecommunication solutions, such as system integrators, value-added resellers and telecom operators.