Carriers, equipment vendors to do battle

28 Feb 2003

A battle royal is looming in the voice over IP (VOIP), or internet telephony space, between IP PBX (private branch exchange) makers and traditional telecoms carriers who are switching on to opportunities in this space, a new International Data Corporation (IDC) report reveals.

At present, manufacturers such as Nortel, Avaya, Alcatel, 3Com and Cisco have created a value offering to enterprises by enabling them to cut costs on calls by switching voice traffic to the internet.

However, traditional telcos, particularly the Baby Bells in the US, are realising that this is eroding available market for them and they are currently sizing up opportunities in this space, otherwise known as IP Centrex.

A new report from IDC says that traditional carriers are moving into VOIP and softswitch architectures. These opportunities will drive IP Centrex revenues from US$281m in 2003 to US$6.7bn in 2007. The report cautions that telecom carriers must move quickly if they want to prevent further erosion of their existing Centrex customers.

“Time is of the essence for these carriers. They need to quickly define and take action on their hosted services strategies since, in 2003 and beyond, enterprise solutions from vendors such as Cisco, 3Com, Nortel, Avaya, Alcatel and Siemens will gradually begin to move into larger enterprises,” said Tom Valovic, director of IDC’s IP telephony programme.

Converged networks, IDC says, have a lot of appeal in the current economic climate. The IDC research shows that economics is often a major value proposition, both on the carrier and premise sides of the market. Progress in enhanced services and applications will eventually give customers additional incentives to purchase but this adoption, which generally takes longer and will require companies to recognise the value in advanced features such as unified messaging and desktop integration.
Over the longer term, applications convergence may be the big draw in the enterprise. SIP (session initiation protocol)-based solutions could catch fire with end users, especially as they relate to user-defined communications (UDC), which IDC believes is the closest thing the IP telephony market has to a killer app. These are web-based capabilities that allow telecom administrators to provision and change services and end users to control the flow of their communications at the desktop level.

IDC predicts that UDC will achieve critical mass sometime in the next two to three years and become widely used in corporate business at all levels.

By John Kennedy