Asian SMB telecom spend to hit US$50B

Small and medium-sized businesses in the region are projected to increase their telecommunication spending by 5 percent this year.

update Small and medium-sized businesses (SMBs) in the Asia-Pacific region, excluding Japan, will spend over US$50 billion on telecommunications this year, according to a new AMI-Partners study.

In a statement released Tuesday, Prasannavadan Gaitonde, an AMI analyst, attributed the increased 5 percent investment over 2006 to the rise in spending in categories such as cellphone services, wide area networks, and IP telephony equipment.

"The market is witnessing a transition from traditional PBX to IP-based PBX," Gaitonde said.

According to the study, Australia, South Korea, China and India make up 70 percent of the spending. SMBs are defined as companies with up to 999 employees.

However, the study also noted that sales of end-point IP devices are moving slower than that of their digital counterparts, due to the former's higher price tag.

To encourage adoption, the study suggested SIP- (Sesssion Initiation Protocol-) enabled phones would provide a more attractive cost option for companies, based on lowered call costs.

"[Asian SMBs] have tighter budgets and need high quality, low-priced telecom solutions and services," Gaitonde said.

He added that SMBs will continue embracing new technologies to remain competitive, and advised telecom equipment vendors, operators and service providers to offer products and services using "the right model and price points" to tap this growing market.

Over the next four years, AMI projects hosted communication services to grow more than three times the growth rate projected for premise-based equipment amongst SMBs.

With increased connectivity, medium-sized businesses will spend significantly more on wide area networks (WAN). WAN spending is projected to rise by 24 percent this year over 2006 amongst medium-sized businesses, which are defined as having 100 to 999 employees.

According to AMI, currently more than one in four medium-sized businesses has a WAN.