Telephony Mart To More Than Double In Six Years
Manila, Philippines - August 20, 2008
THE MARKET for enterprise telephony, or telecommunication with-in companies, in the Philippines is expected to grow by more than a tenth every year into an $87.5-million industry in the next six years — more than double its worth in 2007.
A recent study by research firm, Frost and Sullivan, showed that this growth will be driven by the demand of outsourcing firms for Internet Protocol (IP) Telephony services like voice-over IP (VOIP), which is expected to corner 90% of the enterprise telephony market by 2014.
"The strong demand for IP telephony is attributed mainly to the country’s robust offshore BPO [business process outsourcing] industry that has been aggressively adopting IP telephony solutions," Shailendra Soni, a Frost and Sullivan analyst said in an E-mailed reply to questions.
In 2007, the local enterprise telephony market was worth $40.6 million, growing 45.4%, year on year. The VOIP accounted for around three-fourths or 73.2% of these total revenues. By 2014, the VOIP segment is expected to account for 90% of the entire business telephony market.
In Asia and the Pacific, the enterprise telephony market is forecasted to grow by 9.4% to $2.98 billion by yearend from last year. More than half of this, or 59.2%, is expected to come from VOIP, which will be worth $1.76 billion by yearend, the study said.
Diana Cortes, an analyst of information technology research firm, XMG, Inc., said in an interview yesterday that, "given that the Philippines is one of the leading offshoring markets for voice services, it is expected that the demand for the IP telephony services will grow in the Philippines. Currently, the country’s offshoring and outsourcing revenue is at $4.11 billion (YE2007), where 49.8% are gained from the call center segment."
Geoffrey Chen, assistant to the chief executive of Aeonic Seiche WiFi Philippines, Inc. — provider of wireless digital solutions for Internet broadband and multimedia communications — said in a separate interview that companies have patronized this kind of service due to its reliability, and low costs as compared with conventional international direct dial, or IDD, services. He said the savings for every minute of voice service may amount to more than 90%, with IDD calls costing around 44-cents or as much as P20 per minute, and VOIP calls, costing only four cents.
Obstacles
However, Mr. Chen said it may take as long as five years for this service to be picked up by the mass market.
One of the problems faced by this kind of technology is the country’s weak telecommunications infrastructure in remote areas. Ms. Cortes said this technology "requires good infrastructure to accommodate voice and data integration such as placing good fiber optics. The ability to transmit data expediently especially when traffic is intense is a must."
Another obstacle is educating the market. Mr. Chen said there seems to be little effort by the government and private sectors to educate the public.
Frost’s Mr. Soni said "the biggest challenge towards quicker and larger-scale uptake of IP telephony" in developing markets like the Philippines revolves around old telecoms services. Mr. Soni noted that such "conventional systems still dominate the enterprise telephony markets in emerging markets."
By Paolo Luis G. Montecillo
for Business World |
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