SINGAPORE: Small and medium businesses (SMBs) in Australia, Japan and Korea are witnessing the continued growth of VoIP and triple play services, strong competition among 3G mobile operators in their telecommunications sector markets, the uptake of FTTP services—with a corresponding move away from DSL—and big strides taken in developing digital and mobile broadcasting.

The SMB telecom market for Australia, Japan and Korea was approximately US$40 billion in 2008. A majority of the total developed APAC SMB spend came from Japan with VoIP and mobile data services making up for declines in legacy service offerings. Korea SMBs accounted for the next largest opportunity, driven by the growth of IP video telephony and WiMAX development. As broadband uptake for SMBs in Australia continues, 2008 saw a major shift from basic access to VoIP and hosted services being adopted by SMB.

"The aggregate opportunity of the APAC SMB telecom market is shrinking primarily due to continued displacement in local phone and long-distance service spending. Nonetheless, there are substantial growth areas; in order to be more productive in a mobile environment, firms migrate to IP telephony and continue to adopt smartphones and data plans. Video and web conferencing are increasingly gaining traction as these are driven by cost cutting initiatives and the need to be more efficient and collaborative," said Gina Luk, Asia-Pacific Telecommunications and Networking Research Manager.

As digital cellular systems mature, attention is turning to 3G platforms. Mobile phones are rapidly becoming commodities; fierce price competition has set in to keep and win customers before the much-hyped next generation data services comes into play. 3G is driving a strong migration from cell phones to smart phones. The richness of mobile applications available for download will further solidify this transition. As more workers travel either locally or internationally there will be more occasion for workers to leave laptops in their offices, and use mobile and smart phones. User dependence on smart phones will continue increasing with a growing pool of downloadable applications. Smart phones are expected to be a long-term high-growth category in the SMB market.

"The developed APAC SMB telecom market also leads the region's VoIP adoption with next generation IP communications systems deployment that is moving further away from the old voice-centric model towards a desktop applications-centric model that retains the client's server structural design elements," noted Luk.

Cisco, Avaya, Alcatel-Lucent, Nortel, and NEC are the key IP communications vendors in the developed APAC SMB market. Their market success in this region will continue to be based on shifting their customers' focus from voice features to the network infrastructure supporting a mix of communications, including voice, data, text, image and video.