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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

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