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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