A Tectonic Shift

VoicenData Bureau
New Update

FY 2007-08 saw IP telephony deployment growing rapidly, and outgrowing TDM-based

voice telephony in India. Today, IP-based voice is regarded as the future of

telecommunications. Data previously went over voice networks, as it was a small

constituent of the overall telecommunications traffic. The existing

circuit-switched networks are not optimized for data, and are not efficient.


Some key industries that have adopted unified communications include the ITeS/BPO

sector, banking and finance, retail, government and manufacturing. As unified

communications applications become more prevalent in the workplace,

organizations are realizing the benefits associated with it. Unified

communications applications deliver a multitude of benefits, both in terms of

employee time saving and financial saving. Unified communications not only

facilitate productivity improvements for mobile employees, they also enhance the

way employees communicate. For others, the savings may simply come from having

reduced hardware requirements and operating expenses.

And in today's dynamic business environment, perhaps the most important

benefit comes from having a phone system that can change and grow at a moment's

notice, enabling new capabilities for more effective communications,

streamlining business processes, and improving profitability.


The Players

The voice solution market grew 22.1% to touch Rs 1,725 crore in 2007-08 from

Rs 1,413 crore in 2006-07. According to V&D estimates, Avaya GlobalConnect

emerged as the top voice solution vendor with 24.73% market share, with revenues

worth Rs 440 crore. At the second spot was Cisco with revenues worth Rs 355

crore followed by Siemens with Rs 280 crore.

The IT/ITeS vertical invested the highest amount in voice solutions,

especially IP-PBX. This is because, being a people-intensive segment, it focuses

on technologies to enable increased productivity of workers. The second vertical

that contributed to the growth of the segment was BFSI. Apart from private

sector banks, PSU banks have also been moving toward deploying advanced voice


Although, Avaya Globalconnect sold over 200 IP phones, a major share of its

revenue came from converged IP voice and data solutions provided to Reliance,

Max Hospital, and Le Meridian. Other segments included BSFI, IT, and



Cisco shipped over 300,000 IP phones in India as of December 2007. To

strengthen its product portfolio, Cisco has introduced Version 6.0 of Cisco

Unified Communications Manager with features that benefit enterprise-sized

business customers as well as smaller businesses. It also launched Cisco Unified

Communications 500 Series for small business, a critical part of the Cisco Smart

Business Communications System, which is a solution for small businesses and

provides voice, data, voicemail, automated attendant, video, security, and

wireless capabilities while integrating with existing desktop applications.

Alcatel-Lucent, with Rs 150 crore revenue, received a major order from BSNL

and MTNL for their maintenance and expansion plans.


Coral Telecom bagged major orders from BHEL and Apollo Hospital for providing

voice and data solution. Apart from orders from the Army and the Railways, it

also provided voice and data solution for twelve offices of Mecom.


IP telephony and voice solutions face certain challenges that impede its

growth, which will also reflect on the growth of IP PBX. In India, the biggest

of these were regulatory restrictions imposed by the Indian government and

interoperability issues resulting from a lack of standardization.

Till recently, single infrastructure was not allowed in India. However, with

Telecom Regulatory Authority of India notifying approval for “logical

partitioning” of public switched telephone network (PSTN) and closed user group

(CUG) networks, enterprises, service providers, application software developers

as well as Internet telephony vendors have lots of reasons to rejoice. Corporate

users can now slash down the investment that goes into setting up networks, as

they would not have to manage the expense of two separate PSTN and CUG networks.

Interoperability is a major concern due to lack of standardization. However,

with the adoption of standard protocol such as 'SIP' in the call control engine,

organizations can integrate their legacy or hybrid systems, thereby preserving

their investment. However, full convergence can further reduce cost and improve

RoI for customers implementing IP telephony. But it would take more time.


Another challenge is the availability of the Centrex functionality from

leading operators. Although this is hitting pure play PBX players, it is also

contributing toward growing and further evolving the PBX market.

Marching Ahead

The PBX industry is witnessing an evolutionary process with radical changes

on the technology front. The maturing of IP-based voice transport has seen the

world of telecommunication undergoing a major shift. IP-based voice is today

universally regarded as the future of telecommunications. With technologies such

as IP telephony being introduced, the definition of enterprise communication has

changed. Hence, continuous enhancement of a product mix is an absolute necessity

to not only meet technical challenges head on but to also lead the market.

The adoption of VoIP has been thick and fast in many countries. Its adoption

has been phenomenal in the recent years, in most parts of the world. Over 50% of

telephony revenues were accounted for by IP in countries such as India, the

Philippines, and Indonesia in 2007.


VoIP is seeing tremendous innovation and investment interest within the

communications and networking industry. Many factors are driving this trend: the

growing consumer adoption of low-cost broadband; the emergence of cost-effective

VoIP technology based on technical standards for interoperability, and the fact

that consumers can readily understand the value of VoIP. Positive user

experiences and heavy promotion by leading carriers and service providers will

help fuel the demand for affordable and reliable home and small-to-medium

business VoIP solutions.

As we look at the VoIP landscape today, we see an environment that reminds us

of the wireless local area network (WLAN) market segment of two years ago. VoIP

has quickly evolved from a novelty for “computer geeks” and hobbyists to a

mainstream technology that represents the next major inflection in network



To penetrate cost-effective broadband into millions of homes, small

businesses have established a large new market segment that is extremely

receptive to the delivery of rich, IP-based information and entertainment

services. These services include VoIP telephony, digital audio and video,

multimedia instant messaging and applications that enable resource

virtualization and collaboration.

Today, enterprises are looking for real-time communication that is integrated

with their IT infrastructure and business support systems. The trend is also

shifting toward adding mobility features like GSM gateways and information

mobility on the basic PBX platform.

Apart from technologies such as CTI support and ADSL capabilities, most PBX

systems in the future will have integrated soft switching capabilities which

will become a standard feature so that some of the extension users could be

sitting at remote locations connected to office PBX over the IP cloud and SIP

phones connected to DSL connections will behave as office intercoms.

In the coming years, IP-based solutions are likely to enable companies to

deploy key services such as real presence solutions, unified communication,

video collaboration solutions, and other value-added options such as directory

and XML integration applications that prioritize the incoming calls and

extension mobility. It will also help in running various business productivity

IP applications like directory assistance, live updates on inventory, orders,

sales figures, stock market and also general information on market, weather

alerts, etc.

Communication enabled Business Process (CeBP) that connects the customer's

business processes to IP telephony communication and helps accelerate the

customer's business processes will also be in demand.

The VoIP market is evolving in India and apart from a growing demand in the

enterprise space, the home user segment is also adopting VoIP solutions.

Sandeep Budki