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SMEs to invest $50 bn in telecom

By Pradipta Mukherjee in Kolkata
October 11, 2007 14:11 IST
Small and medium enterprises across the Asia-Pacific region outside of Japan are on track to invest $50 billion on telecommunications equipment and services this year.

This is up some 5 per cent over 2006, according to the latest study by New York-based Access Markets International Partners, Inc.

The Indian SMEs have spent over $5 billion on telecom equipment and services last year. Further growth is expected from the cellular market which is set to grow at over 13 per cent.

"Our survey shows that 89 per cent of SMEs in India currently use mobile phone voice services while 11 per cent access email via their mobile devices. Other services such as audio conferencing are also on the rise, especially among tech-savvy MEs," said Nilanjana Mitra, analyst with AMI.

AMI's survey revealed that developed markets such as Australia and South Korea, and fast-growing markets like India and China, will account for more than 70 per cent of the APeJ telecom spending this year.

The market is witnessing a transition from traditional PBX to IP-based PBX, with most new replacements going the IP way, AMI pointed out in its report. While the base switch is going IP, the end points are moving to IP more slowly. This is due to the higher price of IP end points over digital end points.

In 2006, only 8 per cent of desk phones of medium businesses in a mature market like Australia had IP phones. Session Initiation Protocol (SIP) will reduce the price, making such solutions even more affordable.

As for Unified Messaging -- which can be considered a precursor to the more advanced Unified Communications -- only 16 per cent of Australia's MBs are utilising
this service.

SMEs are as interested in advanced solutions like Unified Communications as large businesses. The difference is that SMEs have smaller budgets and need higher justification for spending their budgets on such services.

As services mature and can be provided on a hosted model, SMEs can deploy enterprise class solutions. Once these enterprise class solutions are offered as a service -- similar to SaaS (software as a service) -- SMEs can adopt them at the right price points.

Hosted communication services or managed telephony services can be provided by telecom operators and service providers in partnership with equipment vendors to provide low-cost solutions to SMEs.

Hosted communications or managed telephony services are set to grow more than three times the growth rate of premises-based equipment among SMEs over the next three to four years.

Equipment vendors, telecom operators, and service providers need to work together to provide such hosted solutions to SMBs across the Asia-Pacific region.

SMEs are expanding their horizons and need more connectivity between offices. Thus, spending on wide area network  services is expected to go up by a huge 24 per cent in 2007 over 2006 among MBs.

More than one in four MBs in this region is currently connected using WAN. In Australia, more than 75 per cent of its MBs are connected by WANs.

According to AMI, SMEs in the Asia-Pacific will continue embracing new technologies to remain competitive. Telecom equipment vendors, operators and service providers need to offer products and services using the right model and price points to tap this growing market.
Pradipta Mukherjee in Kolkata
Source: source