Business Communications

By : |August 10, 1999 0

The definition of business communications
is changing. Value and not units is deciding the investment decisions. The decision making
is shifting from administration to technology domain. As businesses are becoming more
customer oriented, technology investments are going to the front-office technologies. So
voice mail, CTI and call centre are more in the corporate users’ mind than the fax
machines and telephone instruments.

EPABX
• Despite a slowdown in corporate spending on technology, the EPABX market
actually registered a growth.
• The total EPABX market in 1998-99 is estimated to be of the order
of Rs 260 crore, 18.2 percent up from an estimated size of Rs 220 crore in 1997-98. This
includes all sizes of EPABXs—low-end, high-end, and medium-end but excludes
KTSs.
• EPABX, sales of which has a direct co-relation with number of
telephone lines added, however, did not keep pace with the growth of DELs. This anomaly is
explained by the fact that the EPABX market follows the growth of the new telephone
connections, by a period of six-nine months. As much as 56.5 percent of DELs added last
year were added in the last quarter of JFM ’99. The impact of that will take some
time to reflect in the growth of EPABX sales.
• The low-end (below 48 port) segment has registered a growth of 20
percent, thanks to a change in market moods in the third quarter. Many first time
deployments happened pushing the total sales in this segment to an estimated Rs 48
crore,
up from Rs 40 crore last year.
• In the mid-range (48-100 ports), the growth was much less because
of a slowdown in the large businesses, a virtual stagnancy in replacement sales, and KTS
eating into this market. The market grew by 15 percent from last year’s estimated
sales of Rs 80 crore in 1997-98 to a total of Rs 92 crore in 1998-99.
• The high-end EPABX (more than 100 lines) market grew moderately as
it recorded a total sales of Rs 120 crore, a growth of 20 percent over the previous year.
The growth, however, was far from uniform across vertical segments. Most of the sales
happened in the private telecom operators, especially the paging operators. The
banking/finance segment also contributed to the growth.
•  After-sales support has become a significant area of revenue
generation for the industry. About 8-9 percent of revenues of established players came
from that.
• The per line price of EPABX, which was showing a decline in the
high-end market actually has stabilised. At the high-end, the average price remains at
around Rs 5,300, only marginally lower than the figure in 1997-98.
• The players were the familiar faces. While Tata Telecom, Siemens,
Nortel, BPL, and Alcatel remained the top players in the high-end segment, in the
medium-end, Tata Telecom, Usha Informatics, BPL, Siemens, and Alcatel were dominant. The
low-end had too many players. The major names were Accord, Syntel, Matrix,
Ruchi, Star,
and L&T.
• Tata Telecom is the undisputed number one with as much as 28
percent marketshare. Though exact break-ups are difficult to estimate, it can be assumed
that its marketshare is even more in the high-end segment. Siemens comes a distant second
with about 16 percent marketshare. Other overall major players are Alcatel, Nortel, Arvind
Telecom, and Crompton Greaves. This is in terms of total business done across all
segments. Individual segment-wise break-ups are difficult to estimate, on the wake of
companies not sharing the break-up details.
• This year, the market is expected to register a better growth. The
factors that will influence the growth of EPABX sales in India are quick deployment of
telephone connections, new corporate offices, and growth of CTI market.
• India is expected to be a base for global offshore call centres.
If and when that happens, there will be a boom in the sales of very high-end
EPABXes,
whose sales are now confined to only the hospitality industry, with banking and telecom
following.



Growth
of EPABX Market
SALES
(in Rs crore)
1997-98 1998-99
Low-end 40 48
Medium-end 80 92
High-end 100 120
Total 220 260

KTS
• High share of the grey market makes it difficult to estimate this
market’s movements. On the wake of non-availability of demand side data, we have made
some assumptions. The actual figures could swing a bit, depending on the accuracy of our
estimates for the grey markets.
• This market grew by about 25 percent to reach an estimated figure
of Rs 112.5 crore, up from last year’s Rs 90 crore.
• The total KTS market size is only 19.6 percent lower than the
combined market size of low-end and medium-end EPABXes. This implies KTSs are slowly
eating into the EPABX marketshare.
• While there are many players, two companies dominate the market.
They are Nitshuko-Enkay and Panasonic. Others who compete in this market are Tata Telecom,
Siemens, Samsung, BPL, LG, and Nortel (through GEIL). Panasonic, incidentally, also
remains the favourite of the grey market operators.
• This market is going to grow, mostly in the vertical segments of
small non-service industries and the SOHO market.

Voice Processing & CTI
• The CTI market recorded a total sales of Rs 84 crore, thus growing by
about 14.3 percent over the previous year’s figure of Rs 72 crore. However, a large
number of orders were placed towards the end of the year, which will make the 1999-2000
figure look more impressive.
• Surprisingly, the market grew by only about 2,500 ports. That is
only 16.5 percent growth over 1997-98 figures. This is primarily due to absence of any big
independent company. The vendors have not spent enough time, energy, and money in
developing the market.
• The total number of ports sold in India in 1998-99 was about
19,000 ports. Dialogic sold about 13,000 ports and continued to hold the lion’s share
of the market. Among solution providers, Tata Telecom still holds the maximum marketshare
of about 13.3 percent.
• The average port size in Indian market is eight. However, this
figure is slightly deceptive, as there are quite a few big projects. For most
installations, it varies between four to six.
• One factor that was expected to help the IVR/FOD market grow was
the availability of long-distance toll-free lines. That did not happen, delaying the
growth of the market.
• Unified messaging, which has so far been a non-starter is expected
to pick-up. This is being driven by two reasons. First, increased penetration of e-mail
and second, aggressive pushing of fax over IP technology by a few vendors.
• In 1999-2000, CTI market is expected to grow in two
segments—the telecom operators and the call centres.



As
businesses are becoming more customer oriented, technology investments are going to the
front-office technologies.

Call Centres
• By March 1999, there were an estimated number of 440 call centres in
India, with about 9,000 agent positions.
• Banking accounted for the highest share of the market in terms of
value and number of locations, whereas telecom led in terms of agent positions, mostly due
to paging, where call centres are an operation support system. Travel/airlines and other
services industries accounted for the rest. Few non-service companies have full-fledged
working call centres.
• There is virtually no outsourced call centre. This, however, is
likely to change drastically in the next two years.
• With new "IT for the common man" projects, call centres
could find a major buyer in the government sector. This could happen in the current year
itself.
• PC-based call centres have not been able to make their mark, as
just a couple of players are promoting it. PC-based call centres will be adopted initially
only by the direct marketing companies for outbound call centres, because the service
industry is still not very confident about the reliability of Windows NT, the operating
system on which most of them are built.
• Training and consultancy on call centres could be a major
opportunity area.
• India is being considered as the venue for big offshore call
centre by MNCs, particularly in the finance/banking and infotech industries. India enjoys
three distinct advantages—availability of English-speaking workforce, low manpower
cost, and availability of technical expertise to integrate call centre applications. The
international leased line cost have dropped making India even more attractive.
• This is an area where a lot of serious companies are entering. The
venture capital companies are also attaching significance to this industry.
• Call centres, once they come, could push up the sales of CTI
market as well as EPABX sales. 

Voice&Data

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