The Battle for the Business Customer

The global market for PBX, IP Centrex and Mobile PBX is developing quickly, and is expected to account for a majority of business lines by 2010. The development of these IP solutions will result in fundamental changes in corporate network architecture, according to a recent global study by Arthur D. Little.

The convergence of data and voice services have increased the flexibility and speed of communication for the business customer, and has resulted in growing demand for IP solutions. Based on Arthur D. Little's study, IP PBX will reach 23 percent, IP Centrex 20 percent and Mobile PBX 12 percent of total business lines by 2010.

The development of IP solutions globally has varied by region; the greatest potential for IP-based systems has been seen in countries with high broadband penetration, intensive competition between fixed and mobile players and existing VoIP regulation.

The potential of IP solutions is already being addressed by stakeholders, including equipment vendors, system integrators and value-added resellers, fixed and mobile operators, as well as the companies that invest into such systems, creating a variety of opportunities and challenges.

The equipment vendor market will continue to be highly competitive.

Traditional vendors developed migration paths to IP for their existing client base and have already entered the Genuine IP market. Genuine IP PBX vendors have to focus on a particular market segments and smart partnering is key to success. Arthur D. Little expects further consolidation within the industry, as ties between TDM and Genuine IP vendors have to be strengthened.

System integrators and value added resellers will focus increasingly on medium to large enterprises, leaving smaller companies to be served by telecom operators.

They have the opportunity to enlarge their client portfolio with new vertical IP PBX solutions and provide maintenance and migration to IP contracts to their existing client base.

However, they need to intensify their partnerships with vendors due to higher complexity in the sales process and increased demand for customised solutions.

Among operators, the battle for the business customer has intensified with IP Centrex and Mobile PBX solutions. Alternative operators are the most aggressive, offering attractive bundles and attacking the incumbent's existing business client base.

Incumbents are slow to offer IP solutions, as they are concerned about cannibalising their traditional TDM services. Mobile operators are addressing enterprises with Mobile PBX solutions with the option of completely substituting the current fixed-line infrastructure of a company.

Companies face a complex decision making process due to the variety of options available to them, resulting from the change in telecom network architectures from a technical stand point (TDM vs. Hybrid vs. IP solutions), as well as from the business model (in-house vs.outsourcing).

Furthermore, the options for sourcing telecommunication services is confusing with System Integrators, value added resellers and telecom operators offering deployments of IP PBX, and fixed and mobile operators providing hosted telecommunication solutions.