SMEs to Fuel Growth of IP Centrex

SINGAPORE: IP (Internet Protocol) Centrex has the capacity to evolve into a popular IP-hosted telephony service in Asia Pacific, as developed markets are leading the way with increasing adoption.

Many enterprise users are undergoing a platform shift from traditional TDM (time division multiplexing) Centrex to IP-based services. While IP-PBX (Internet Protocol private branch exchange) is popular amongst large enterprises, SMEs (small- and medium-sized enterprises) are leveraging the cost advantages of IP Centrex for their growing communication needs.

New analysis from global growth consulting company, Frost & Sullivan IP Centrex Market Opportunity in Asia Pacific, profiles the IP Centrex/hosted IP telephony service offerings and market opportunities in four countries - namely Australia, Hong Kong, Singapore and South Korea - that are leading adopters of IP Centrex solutions in the region.

"IP Centrex solutions have the potential to gain popularity not only with the SME segment but also large enterprises due to the inherent benefits," says Frost & Sullivan research analyst Aravind Venkatesh. "The increasing reliability of IP-based telephony service coupled with its feature-rich functionalities offer compelling value proposition and added appeal for enterprises of all sizes to adopt IP Centrex solutions," he adds.

Competition in the IP telephony market is intensifying, with vendors, system integrators (SIs), and service providers competing to gain market share.

While IP-PBX solutions are widely adopted, many companies across Asia-Pac are beginning to leverage on the cost efficiencies of IP Centrex solutions to meet their telecommunication needs. Countries such as Australia, Japan, Singapore and Hong Kong hold promising growth for IP Centrex. These markets are also significant in influencing the widespread adoption of IP Centrex solutions in other countries such as South Korea, China and India.

While reduction in total cost of ownership is a key differentiator for IP Centrex, concerns over VoIP (Voice over Internet Protocol) call quality and system security have hampered the growth of this market.

Growing security concerns have also deterred users, particularly large enterprises, from embracing this technology. Moreover, as quality of service (QoS) concerns and user mindset are likely to hinder the uptake of IP Centrex in the near term, service providers need to educate enterprise customers on the benefits of IP Centrex, and encourage the outsourcing of enterprise IP telephony requirements.

"As the majority of information exchange is carried out electronically, enterprises are wary of transferring control of their customer premise equipment (CPE) to service providers," notes Venkatesh. "The 'feel good factor' of housing and maintaining the CPE in-house has contributed to the delayed uptake of IP Centrex in many countries across Asia Pacific."

In an effort to enhance confidence in these systems to increase deployments, service providers should aggressively promote the advantages of IP Centrex offerings. Rigorous service level agreement (SLA) guidelines should also be introduced to allay concerns of data security. These combined strategies are expected to radically drive the growth of this sector, the analysis says.

© CIOL Bureau