Voice Solutions : IP Wave On

The global trend of decline in TDM based enterprise telephony and increase in
adoption of IP telephony is being witnessed in India. Avaya GlobalConnect
retained its leading position in the enterprise telephony segment followed by
Alcatel-Lucent. According to VOICE&DATA estimates, Avaya GlobalConnect has 30.7%
market share with total revenue of approximately Rs 629 crore. Even though the
growth rate was much higher for Alcatel-Lucent at 168%, revenue of the company
jumped from Rs 150 crore in FY 2007-08 to Rs 402 crore in FY 2008-09. Siemens
stood second in the market with business from TDM, hybrid and IP phones.
However, revenue of Cisco and Panasonic declined this year by 20% and 12.8%
respectively. Revenue of Cisco was derived from only IP phones and 80% of
Panasonic business came from hybrid phones. TDM based enterprise phones and IP
phones contributed 15% and 5% revenue respectively to the business of Panasonic.

IP telephony witnessed adoption in most of the organizations, especially
large multi-locational organizations including large enterprises, government,
retail, manufacturing, BFSI. However, today mid-sized organizations are also
seriously evaluating this technology.

Until recently, the IP communications debate focused on whether it was a
viable, 'ready-for-prime-time' technology. But in the last few years this new
technology has gained a strong foothold in the mainstream market. As a result,
the traditional EPABX has evolved from a TDM architecture (traditional systems
switch calls using a digital circuit-switch technology called TDM) to an IP
architecture.

Market Curves

Indian organizations like their global counterparts are seeing end of life
of their existing EPABX which lacks scalability. IP telephony is ready to
provide collaboration of voice, video and data at reduced cost to these
organizations.

TDM based traditional PBX market in the country is stagnating as India is
embracing IP telephony rapidly due to the inherent benefits of this technology.
Enterprise voice telephony is becoming business user centric. It is moving
towards unified communications and multi-vendor applications with tight
integration of all real-time and non-real time communications.

The transition from TDM based phone to IP telephones is seeing some business
for converged multi-service communications systems. The converged systems give a
capability to provide legacy connectivity, like PCM-TDM and IP as well. On an
average, reliable converged systems in Indian market are available at Rs 4,000
per user while pure IP systems including IP terminals are estimated to be
available at Rs 15,000 per user.

To support this kind of transition, Siemens developed OpenScape Unified
Communications Server to provide enterprises with UC capabilities that combine
enterprise-grade voice with carrier-grade scalability and reliability, IP least
cost routing, videoconferencing and role and presence based UC applications.
Siemens claims that this server supports open communication philosophy as it
operates in any existing IT or telephony environment. This includes current
generation IP telephony, as well as legacy PBX environments, whether from
Siemens or any other company.

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

The Indian market saw sales of close to 4 lakh units of IP telephones.
Selling solutions like enterprise mobility brought revenues to the company.

Industry Outlook

The trend of decline in TDM based phones will continue, and IP telephony
seems to be poised for a big boost in the coming years. Siemens, focusing on
BFSI, hospitality and government, sees three main technology viz-IP enabled
PBXs, IP converged systems and pure IP systems-that will replace PBX market. It
is expected that the enterprise communications systems will grow at the rate of
18%.

The mid-markets and SMBs in India will be driving the growth of
voiceconferencing in the coming years. Also, the future of voice solutions in
India will be voice calling over broadband, especially with legal constraints
slowly fading and reduction in cost of ownership. The next obvious step would be
for VoIP to evolve in the mobile industry which is already being done in
landline phones. 3G users are expected to reach over 230 mn by the end of 2012.
The integration of VoIP into web browsers for better accesibility is another
innovation to look forward to. Moreover, factors such as a single call rate
across the country could be important in achieving concurrence on a telecom
policy. VoIP could prove to be the most effective and cheapest means of
connecting towns and cities across India.

The industry is waiting for DoT to open up domestic VoIP market. Players in
the industry believe that DoT cannot ignore the benefits derived from Internet
telephony for long. The delay in opening of Internet telephony impacts national
economy as enterprises are unable to get the benefits of low price calls and
hence, are unable to reduce their operational expenditure. The enormous increase
in data traffic in international scenario, increasing acceptability of IP
network, increase in adoption of NGN by many countries, and global liberal
regulatory regime for Internet telephony require a fresh review of existing
licensing conditions in India.

Hence, when Internet telephony will be liberalized in India, it is expected
that IP telephones will entice retail segment, which is expected to reduce their
prices.

Prasoon Srivastava

prasoons@cybermedia.co.in