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IP Telephony systems set to overtake traditional PBX sales in 2004

  • 07 April, 2004 14:01

<p>IP Telephony systems will surpass traditional PBX sales in 2004, according to a new study by Frost &amp; Sullivan.</p>
<p>IP PBX sales in Australia surged by 175.6% to US$73.3 million in 2003.</p>
<p>This led to a strong performance in the overall enterprise telephony equipment market, which was valued at US$200.2 million in the same period.</p>
<p>Much of this growth was attributed to the deployment of IP telephony solutions in large enterprises and across all levels of government in Australia.</p>
<p>“In 2004 we will reach an important inflection point where IP telephony will outsell traditional PBX systems” says Foad Fadaghi, Senior Analyst with Frost &amp; Sullivan Australia.</p>
<p>“IP is a disruptive technology that will impact equipment vendors but also the telecommunications carriers.”</p>
<p>“More IP enabled systems in the market will see an increased demand for VoIP services such as those recently launched by Comindico and AAPT”, says Fadaghi.</p>
<p>IP Telephony equipment revenues as percentage of the total market is expected grow from 36.3 percent in 2003 to over 85 percent in 2010.</p>
<p>IP telephony has the ability to reduce call costs through “toll bypass” or the ability to connect dispersed sites through the Internet. Furthermore, cost savings can also be achieved, as companies need only to manage a single IP network, rather than separate networks for voice and data.</p>
<p>In addition, Frost &amp; Sullivan believes further benefits can be achieved such as improved overall productivity and the streamlining of processes within an organisation.</p>
<p>“Most companies have overcome their early jitters associated with this technology and are seeking to move forward to deploy IP based applications such unified messaging, video and audio conferencing”, says Fadaghi.</p>
<p>However, the report finds that despite the earlier promises of value added applications, many vendors are still in the development stages of introducing new applications.</p>
<p>Currently most of these applications are still related to contact centres.</p>
<p>Most IP solutions have been deployed in the government, hospitality, manufacturing, education institutions and healthcare verticals.</p>
<p>There are still a substantial number of companies that are opting for the less costly alternative of IP enabling their legacy PBXs, as many PBXs have not reached the end of their useful life. This kind of enablement accounted for 23.2 percent of IP PBX sales in 2003.</p>
<p>This evolutionary approach is more appealing to companies that seek to protect their initial investments in PBX and also for companies that are more conservative in nature.</p>
<p>In addition, the popularity of IP enabling existing systems will remain in the short term, because the full benefit of pure IP telephony is still not widely understood.</p>
<p>The growth of IP based solutions has reduced the demand for the traditional PBXs which declined by 13.2 percent from sales in 2002. Nevertheless, the majority of PBXs sold in 2003 are capable of implementing IP telephony in the future through upgrade cards.</p>
<p>Further examples of the growth of IP telephony equipment can be demonstrated through the results of the major vendors in the market. For example, Cisco has managed to emerge as one of the top three participants in the total market (both IP and non-IP), with an IP only offering.</p>
<p>The migration towards IP telephony has yet to significantly impact the price competitive Small and Medium-size Enterprise (SME) segment. Nevertheless, the Key Telephone Systems (KTS) vendors such as LG, Samsung and Panasonic have also introduced the IP enabling options for their newer KTS systems, as traditional enterprise vendors such as Avaya and Cisco enter this space aggressively.</p>
<p>About Frost &amp; Sullivan</p>
<p>Frost &amp; Sullivan was founded in 1961 in New York City with a specific mission: To publish world-class market consulting information and intelligence on emerging high technology and industrial markets. Today, we have developed a reputation as one of the world's leading companies in growth consulting, high tech market studies and industry analysis. Currently we have over 500 consultants and market analysts based in 18 offices around the world.</p>
<p>Frost &amp; Sullivan’s Technology division is the largest dedicated telecommunications and network convergence group in the Asia Pacific. The local teams consist of highly capable and experienced analysts and consultants, operating in a network of offices across the region including Singapore, Japan, China, India, Australia, Malaysia, and Korea.</p>
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Foad Fadaghi
Senior Analyst - Technology
Direct: +61-2-8247-8910
Mobile: +61-414-992-466
<p>Asia Pacific (Singapore)
Francis Huan
Public Relations
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