IP telephony adoption goes up in AP

IDC says countries with the strongest uptake in the third quarter of 2005 included Malaysia and Taiwan, while Indonesia was "surprisingly" close.

One out of every four telephony lines shipped in the Asia-Pacific region, excluding Japan, in the third quarter of 2005 were based on Internet Protocol (IP), said IDC.

According to the research company, the region's overall enterprise telephony equipment market grew its revenues by 8 percent in the third quarter last year, compared to the previous quarter.

This increase was mainly attributed to the 16 percent quarter-over-quarter growth in the IP telephony equipment segment. Comparatively, the traditional telephony segment’s contribution was not that large and saw only a 4 percent growth sequentially in the third quarter of 2005, said IDC.

"The Asia-Pacific business environment is very challenging for enterprise telephony vendors because of the cultural diversity and the large percentage of small sized businesses in the region," said Susana Vidal, senior analyst at IDC Asia-Pacific's telecommunications division. She estimated that 89 percent of businesses in the region have fewer than 100 employees, excluding businesses with one to four employees.

"Despite the high growth rate for IP telephony equipment, migrating these businesses to IP will be complex, not only in terms of channel strategy, but also in finding the right value-price combination for each market [which] will require meticulous fine tuning," she added.

In terms of growth, the countries that experienced the strongest uptake of IP telephony tools in the third quarter of 2005 were Australia, Malaysia, New Zealand and Taiwan. Indonesia was "surprisingly" very close to generating over 50 percent of revenues from IP telephony, compared to traditional telephony equipment, said IDC.

The research company attributed this to the strong contact centre business in Indonesia which spurred large growth in terms of the number of IP lines deployed. In the third quarter of last year, Australia, China, India and Taiwan led the region's overall enterprise telephony equipment in terms of revenues.

The migration to IP continued across the Asia-Pacific region, with third-quarter sales of IP telephony equipment overtaking sales of traditional telephony in Australia, New Zealand and Singapore--58 percent of IP-based sales versus 42 percent of Time Division Multiplexing (TDM) equipment in all 3 countries.

According to IDC figures, Avaya was the leader in the overall IP telephony equipment market in the third quarter of 2005 with 27 percent market share in terms of revenues, followed by Cisco, Nortel and Alcatel.

Avaya’s lead came from major customer wins in Australia, Hong Kong, India and Thailand, IDC said. Runner-up Cisco scored major customer wins in Australia, India and Malaysia.