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The enterprise voice solutions market during 2003–04 was pegged at 13 lakh lines at an estimated worth of Rs 702 crore. This represents a 10 percent growth in number of lines and 11 percent in value. During 2002-03, the voice solutions market was pegged at 11.8 lakh lines at an estimated worth of Rs 630 crore.

In terms of value, the market was dominated by total solution providers. IP started making more headway as enterprises adopted it and all vendors started offering it. The size of deals have became bigger with several deals over 2000 seats and as prices in the organized sector crash, the gray market operating at the lower end of the spectrum had a tough time.

The demarcation between KTS and PBX has become increasingly blurred as the market became feature-driven and as also PBX prices came down steadily. However, strictly speaking KTS as a segment experienced slow growth. The overall market was still dominated by PBX at an overwhelming 82 percent, followed by IP-PBX at 12 percent and W-PBX at 5 percent.

The market is clearly demarcated by different categories of players. Tata Telecom, Cisco, Nortel are positioned at the high-end as total solutions providers, followed by the price warriors Siemens, Ericsson, NEC, ABS, Panasonic, LG in the mid-range and the Accord, Matrix, Samsung, Syntel, Crompton Greaves etc in the lower-end along with the unorganized sector.

The price dynamics among the high-end players are very different as the focus is on selling total solutions and not just number of lines. Therefore, there could be a discrepancy in determining the market share based on the number of lines sold vis-ŕ-vis the value of the market. For instance, a player like Cisco focussed on IP-centric solutions may have a insignificant market share based on the number of lines although its revenue realization would be higher than any other player. Yet for the sake of simplicity, we have taken the number of lines sold as the parameter for estimating market share.

IP Gets More Takers
The year saw IP telephony make impressive headway. Enterprises have started seeing IP as a reality. Not surprisingly every vendor has something to offer in IP and have mentioned it as their priority in the next fiscal. The arrival of IP is indicated by the fact that vendors have started offering IP platforms in the lower end. Panasonic, ABS, NEC introduced IP-ready platform in the 50–300 port system during the year. This means that IP adoption has filtered down to the smaller enterprises indicating a desire to be at least future-ready.

V&D estimates CyberMedia Research

The adoption of pure IP solutions or IP-centric solutions was still slow during the year and is expected to take some time due to the initial high cost of deployment and regulatory issues.

However the year saw increasing tendency amongst enterprises to go in for hybrid environment particularly as those with multi-locational presence are seeing the immense cost benefits that can accrue in the long run despite the initial high cost. Centralized banks and telecom operators in their bid to have connected enterprises to reduce cost of management and in order to have disaster recovery measures are taking the lead in adopting hybrid environment.

A huge consideration for the uptake of IP solutions is that enterprises are increasingly mobile-enabling more applications in order to have a connected workforce.

Tata Telecom, Nortel and Cisco have established themselves in the IP space although ABS, Panasonic and NEC also did some IP installation. Growth in IP-based contact centers was fuelled by global offshore leaders like Dell International and Convergys.

New Indian third-party players like V-Customers, TracMail, Transworks, Epicenter Technologies, Hinduja TMT, Progeon which do not have the legacy systems were early adopters in the industry.

Tata Telecom emerged the largest player in the IP space as it has offerings on the hybrid platform while Cisco, the other big player in the IP-space is only focussed on IP-centric solutions. Therefore Tata Telecom has a larger market share, as not everyone is willing to jump the IP gun completely. It was also a concerted effort on Tata Telecom that saw it gain market-share in the IP solutions space.

Cisco's IP-centric march was aided to a large extent by tech-savvy software companies like Infosys, Wipro, Intel, IBM. Among the contact centers it was existing customers like v-Customer (1000 seats), Nirvana, TransWorks who brought repeat business to Cisco with their expansion strategies. However, a proud feather in Cisco's cap is the SBI order to connect various branches on an IP platform. Another Cisco achievement during the year is that company has touched a milestone of shipping 25,000 IP phones and is expected to close the fiscal at double the figure having already shipped 20,000 phones since during this fiscal.

The other player in IP, Nortel did good business but is poised for the big leap during the next fiscal. In fact, Nortel bagged a 4,500 ports IP-centric deal across multiple location during the year. Nortel is likely to make considerable ingression into the IP domain during the next fiscal as 60 percent of its existing customers have already registered for its hybrid platform and plans to migrate within the next 2–3 months.

Vendor Performance
Tata Telecom continued to dominate as the largest player both in terms of revenue and number of lines sold. Sadly, this player will not feature in our next annual issue as the company has been taken over by Avaya and is expected to see a name change soon.

The total revenue of Tata Telecom is Rs 401 crore with the estimated revenue from pure voice solutions pegged around Rs 220 crore. In terms of the number of lines also, Tata Telecom takes the clear lead and would have sold about four lakh lines.

V&D estimates CyberMedia Research

The company had a major presence in the contact center space with over 48 percent of its revenues coming from the segment followed by the enterprises space bringing in 38 percent revenues and services bringing the rest. Tata Telecom's success in the contact center space is not surprising considering that Avaya is the vendor of choice amongst most outsourcing players in the US.

Besides, Tata Telecom has actively positioned as the solution provider in the contact centre space by aligning itself with a wide range of solution providers. ACD comprise a major chunk of the business bringing in as much as 30 percent of the segment's revenue to the company.

The company's contact center business was led by voice-based offshore centers in the telecom and BFSI. Interestingly most of the business in this sector was for expansion with not many new customers. The scene was very different in the previous fiscal when growth was led by new customers setting up operations in India.

Telecom as a sector has also been active in the domestic front. As the growth of wireless telephony spread like wildfire, operators had to make provision for customer care. Tata Telecom bagged two large deals in this space: a 500 seat call center for Reliance and a 2000 seat call center for Tata Indicom across multiple locations.

Banking which was a large driver the year before was a poor customer during this year bringing in only 2–3 percent growth. Tata Telecom has the distinction of bagging one of the largest deal of the year-a 5000-seat order from Tata BPO company Tata Airline.

Education as a segment was lucrative as institutions made substantial investments to enable converged networks within campuses. A major win for Tata Telecom was the Kalinga Institute of Information Technology.

Siemens Ltd, the second largest player, focussed on traditional PBX during the year. With the launch of its hybrid platform, High Path 400, it will become active in the IP space. The company made progress by increasing its presence from 15 locations to 30 locations. It also appointed more channel partners up from 80 partners in the previous fiscal to 130 partners during the last fiscal. A good deal of Siemens' business came from two large deals from the defense forces.

Panasonic emerged a strong player in the mid-segment range with a formidable brand name. It won a number of large deals including IDBI, ICICI Bank and Max New York Life. The largest deal was a 5,000-port deal from Reliance Infocomm at an estimated value of Rs 12 crore. The company mostly focussed on digital PBX systems but sold some analog systems as well. This year the company also forayed into IP on which it is betting big in the next fiscal.

Ericsson, represented by HCL and BPL, performed moderately. There are speculations that the company will reposition its enterprise business with stronger focus on the carrier switching market. Consequently it is expected that the company would phase out the BP series by 2005 and increase the price of MD series. Accenture has placed orders to HCL Infinet for 6000+ ports of Ericsson MD110 system for its facilities at Bangalore and Mumbai.

Nortel did well particularly in the call center market, courtesy its huge presence in the US call center market. Other segments like corporate houses, defense and government institutions also brought good business. In fact Nortel bagged the largest IP deployment of 5,000 ports in the enterprise segment. Although it is focussed in the total solutions space, it also offers a lower end product called NorthStar, which is a digital KTS.

Last year saw ABS (formerly Alcatel Business Systems) valiantly trying to build up its team and presence in the market. It increased the number of employees from 40 people a year ago to 125, set up offices in five locations and indirect presence in 25 other locations. ABS addressed the market with its two categories of products: OmniPCX Office targeted at the lower end and the OmniPCX Enterprise a hybrid solution targeted at large enterprises. The Omni Enterprise, which was launched in mid of last year, is expected to boost company's performance during the next year. The company also tied up with SNOM, a German company for IP and SIP phones.

The company did well as compared to the previous year during which the transition from Alcatel to ABS was effected. Yet the performance may not have been good enough as the market is agog with rumors that Alcatel has appointed GTL as its second distributor.

NEC did well in niches particularly in the hospitality sector and the broker community. It also made its foray into the lower end of the call center market during the third quarter by launching its product Aspila (called Aspire in the US market) with 512 ports. The company will target the domestic call center market with 300 seats with Aspila. It has made a beginning by winning the Taj Group order.

NEC dominated the hospitality sector with deals from ITC (in which 27 hotels were networked on its IP platform), Intercontinental (Park Royal and Grand Mumbai), Natraj Udaipur, Ecotel Group of Hotels, Best Western Group and Kwality and Group.

Balaka Baruah Aggarwal