On market size and your company share

According to a Frost and Sullivan market report for Q1 2008-09, the Indian IP telephony market has been estimated at Rs. 304 crore, and Cisco has emerged as the leading player with a market share of 34.4 percent.

As per IDC, the total hosted IP voice services market, comprising IP Centrex and hosted IP PBX services, is forecast to reach Rs. 1,837 crore by 2011 at a five-year CAGR of 68.3 percent from Rs 136.54 crore in 2006. In India, the market is expected to grow at a CAGR of 64.7 percent.

VoIP in India is a unique market especially services offering price advantages to users. The top Indian enterprises are bridging the gap of market understanding and capturing any new possibility. The end-user analysis addresses the user's perspective of IP telephony, local vs. global trends in adoption, awareness vs. intensity of use, motivator vs. barriers, etc.

The market is growing at a phenomenal rate globally and the Indian phone market can't be left far behind. VoIP is picking up in the Indian market and is expected to be the second largest market in the APAC after China.

Although IP is being accepted as the next wave in communications, across all enterprise segments, some of the key industries that are first movers include ITes and ITS, banking and finance, government, and manufacturing.

Many factors are driving this trend: the growing consumer adoption of low-cost broadband, the emergence of cost-effective VoIP technology based on technical standards for interoperability, and the fact that consumers can readily understand the value position of VoIP. Positive user experiences and heavy promotion by leading carriers and service providers will help fuel the demand for affordable and reliable home and small-to-medium business VoIP solutions.

We see an environment now that reminds us of the wireless local area network market segment just two years ago. VoIP has quickly evolved from a novelty for "computer geeks" and hobbyists to a mainstream technology that represents the next major inflection in network technology.

Some of the factors promoting the growth of VoIP solutions are:

• Increase in adoption of converged networks by corporates
• Increase in PC penetration
• Growth in the consumer communication services segment i.e. PCOs and cybercafes thereby driving entrepreneurship and employment
• Fall in communication costs (local and International) through other devices (landlines, mobiles, etc.)
• Increase of traffic minutes within and from India
• Considerable increase in tele-density

Cisco is the leading IP telephony vendor having shipped over 300,000 IP phones in India as of December 2007 and growing at a CAGR of 61 percent.

To strengthen its product portfolio, Cisco recently introduced Version 6.0 of Cisco Unified Communications Manager that includes features that will benefit enterprise-sized business customers as well as smaller businesses. It also launched Cisco Unified Communications 500 series for small business, a critical part of the Cisco Smart Business Communications System, which is a unified communications solution for small businesses that provides voice, data, voicemail, automated attendant, video, security, and wireless capabilities while integrating with existing desktop applications such as calendar, e-mail, and customer relationship management (CRM) programs.

The "Network on Wheels" program is amongst the largest marketing programs by Cisco in India. Besides the U.S. and Canada, India is the only market where the NOW program has been launched and this reiterates Cisco's commitment to India and its identification as a strategic growth market for small and medium-sized businesses (SMBs).

The 'Network on Wheels' van is a 25 foot mobile showcase equipped with the latest SMB customised Cisco networking solutions aimed at helping SMBs leverage the power of networking technology for business growth. The mobile van will visit strategic industrial locations across key tier I, II and III cities and host live demonstrations for more than 100 customers per city in the country. The Cisco NOW van will demonstrate for SMBs exciting interactive technology solutions designed to enhance their competitive advantage, maximize productivity and ROI, enhance customer care and loyalty, increase user satisfaction, and reduce operation costs-ultimately driving business growth. We have successfully covered New Delhi (NCR), Chandigarh, Ludhiana, Karnal, Lucknow, Kanpur, Varanasi, Jaipur, Ahmedabad, Pune, Mumbai, and Hyderabad. Going forward, the NOW van will cover key industrial cities including Coimbatore, Hubli, Guwahati, Raipur, Cochin, and Surat among others.

In India, the biggest of challenges were regulatory restrictions imposed by the government and interoperability issues that result from a lack of standardization.

Till recently, single infrastructure was not allowed in India. However with TRAI notifying approval for "logical partitioning" of public switched telephone network (PSTN) and Closed User Group (CUG) networks, enterprises, service providers, application software developers as well as Internet telephony vendors have a lot of reason to rejoice. Corporate users would not have to manage the expense of two separate PSTN and CUG networks. Interoperability is a major concern due to lack of standardization. However, with the adoption of standard protocol such as "SIP" in the Call Control Engine, organizations can integrate their legacy or hybrid systems with Cisco IPT solutions thereby preserving their investment.

Cisco IP telephony solutions are an integral part of Cisco Unified Communications, which unify voice, video, data, and mobile applications on fixed and mobile networks enabling users to easily communicate in any workspace using any media, device, or operating system.

Cisco IP telephony solutions comprise of call processing and IP phones which are wired, wireless and soft phones. Cisco IP phones are available in wired and wireless versions and provide handset functionality for Cisco Unified Communications Manager, Cisco Unified Communications Manager Business Edition, Cisco Unified Communications Manager Express, SBCS, and XML applications. Soft phones such as Cisco IP Communicator and Cisco Unified Personal Communicator are also available to extend voice and multimedia functionality to clients which run on Windows or Mac computers.

One of the key challenges is the relatively high prices of IP phones. But the cost and productivity benefits from VoIP implementations could address this issue.

Interoperability is another issue that needs to be resolved. Not all phones, soft phones, gateways, and call managers are interoperable as they support some proprietary variant of a standard protocol. Many suppliers have developed products that support open standards such as the session initiation protocol (SIP), which not only allows for VoIP communication but also supports video, fax, and presence and instant messaging. Open standards are important because they provide a foundation that can be built upon.

IP-based voice is today universally regarded as the future of telecommunications. Data previously went over voice networks, as it was a small constituent of the overall telecommunications traffic. Existing circuit-switched networks are not optimized for data and are not efficient. Today, we use multiple devices for business communications like a desk phone in the office, mobile phones, radios, IM, emails, etc. While each of these devices has its own usefulness, they add more complexity for users and therefore communication chaos. This complexity can only be resolved when these devices can be integrated together rather than working in silos. New communication standard like "Session Initiation Protocol (SIP)" provide the possibility of integrating these systems from multiple vendors.

Today customers are looking at unified communication to solve the communication chaos by integrating their various communication systems with their business applications to improve their business processes. Some of the key industries that have adopted unified communication include ITES/ BPO sector, banking and finance, retail, government, and manufacturing.

Results documented by Sage Research demonstrate that unified communication applications deliver a multitude of benefits, both in terms of employee time savings and financial savings. Unified communication applications not only facilitate productivity improvements for mobile employees, they can also enhance the way employees communicate.

Recently, TRAI recommended that restrictions be removed from making phone calls over the internet using VoIP (Voice over Internet Protocol). Until now, consumers could only use their computers to call other computers equipped with software for phone conversations over the internet. But if the Department of Telecom (DoT) accepts TRAI's proposal, consumers will be able to use their computers or even their fixed lines and mobile phones to call fixed lines and mobile phones anywhere in India and across the world, dramatically reducing the costs involved.

Vendors like Cisco are analyzing this development to understand impact of TRAI's recommendation on business and industry.