Going Wireless

India, Australia, South Korea and China put together contributed 75% of the
total APAC enterprise telephony market, as per a Frost & Sullivan report.
Resilient performance in these countries helped reduce the magnitude of decline
across the APAC enterprise telephony market. Higher growth is expected from
India and China in the forthcoming quarters.

In India, the PBX market size is around Rs 800 crore. Market in terms of
number of lines would be around 3 to 3.5 mn per year. Small and medium sized
PBXs form a significant portion due to their sheer numbers.

The worldwide PBX sales grew by approximately 1% last year. However, in
2008-09 the market grew by almost 7% reportedly.

The economic slowdown has had a negative impact on every sector. In India,
the growth in the government sector has gone up, which in turn has compensated
for the slowdown in other sectors. Purchase orders have been reduced or stopped
or deferred; however, there are signs of recovery. The market will start showing
reasonable growth this year onwards.

The Technology

The PBX technology can be divided into three categories-analog, digital, (PCM-TDM)
and IP. Analog technology is prevalent in mainly small PBX up to sixteen lines.
Digital (PCM-TDM) PBXs with ISDN BRI and PRI interfaces are popular in all
configurations up to 500 lines. And the penetration of IP PBX technology is on
the rise. There are still some regulatory issues resulting in confusion in the
market regarding the usage of IP for voice communication. But once it is
resolved, IP is likely to replace PCM-TDM sooner than the industry expects.

IP telephony technology has gained a strong mindset in the mainstream market.
Enterprises are deploying hybrid and IP-PBX systems even for PSTN network. In
fact, the demand has percolated from large enterprise networks down to SMBs
since they too have realized the immense benefits that these systems can offer.
Reduction in equipments costs and the lower TCO has made them adopt these
systems with greater vigor.

Further, high speed broadband, inexpensive end terminals, and international
long distance carrier options will encourage the growth of VoIP in India.
Increase in the adoption of unified communication applications, availability of
required bandwidth, and increased awareness levels will drive the growth of the
Indian VoIP market.

The industry is moving towards unification. Enterprise and carrier networks
are overlapping in functionality. The way forward in such a scenario is to offer
comprehensive solutions catering to different market segments like SOHO, SME and
large enterprises. Extensive customer reach backed by high quality service
support will be the differentiating factor. Offering solutions for verticals
like hospitality, trading, etc, will generate a new market segment. IP converged
network is a basic requirement of an enterprise now. Real-time IP applications
on converged networks will revolutionize the enterprise communications market.

Wireless PBX

Exponential growth in the personal mobile telephony has led to the evolution
of various wireless technologies and convergence of these technologies like
Wi-Fi, WiMax, GSM, 3G and CDMA that has given birth to wireless PBX. These are
technologies which are built on to perform on the IP or PCM/TDM platform.

Enterprises that are widely spread and having many of its employees who work
on mobile will require opting for wireless PBX for the obvious benefits of round
the clock connectivity, easy deployment and cost.

Migration to IP

IP based voice transport has matured in the last one year, and has seen the
world of telecommunications undergoing a humongous change. IP based voice is
today universally regarded as the future of telecommunications. Data previously
went over voice networks, as data was a small constituent of the overall
telecommunications traffic. Existing circuit-switched networks are not optimized
for data and not that efficient.

The last decade has seen the greatest technological shift in voice
communications in over a century. The maturing of IP based voice transport has
seen the world of telecommunication undergoing a tectonic shift.

Today customers are looking at unified communications to solve the
communication chaos by integrating their various communication systems with
their business applications to improve their business processes. These improved
business processes lead to higher productivity for employees and greater
customer satisfaction which in turn results in higher revenues and profits.

Growth is expected in the SMB markets, and vendors will concentrate more in
this sector as more people look to start up small businesses or work from home.
Most of the growth will be observed from the government vertical this year as
well for PBX vendors over the next year. Customer awareness has been increased
by vendors on the benefits of IP PBXs, this helps them to overcome the fear of
new technology in turbulent times as was recently witnessed.

What Lies Ahead?

PBX market is moving towards IP technology. Although IP is being accepted as
the next wave in communications across all enterprise segments, some of the key
industries that are first movers include ITeS and ITS, banking and finance,
government, and manufacturing.

Enterprises have realized the value of VoIP given its inherent cost
effectiveness, ease of deployment and management since it allows enterprises to
invest in a single communication pipe that can deliver voice and data
communications to the enterprise desktop. Best suited for multi-location
industries, VoIP is being deployed in IT services and BPO companies,
manufacturing, telecom service providers, banking and financial services
companies.

With reference to India, omnipresent POTS and GSM would still play a major
role in offering connectivity across the length and breadth of India. The
requirement sought after would be hybrid IP solutions. The demand for unified
communications would also grow among enterprises. The traditional PBX market
will come down. It is expected that the PBX industry will grow from 20% to 25%
in line with the expected Indian GDP growth of 10%.

However, the challenges would be to address the requirement of customized
solutions. Service providers being bulk buyers are pushing the price level down.
Above all, the vague regulatory policy for the usage of VoIP network in India is
restricting the expansion of VoIP to a certain extent. The secondary challenges
would be competition from the unorganized players and cheap products from across
the border.

Akhilesh Shukla

akhileshs@cybermedia.co.in