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  • Hosted Communications Services Present Excellent Growth Opportunities to European Service Providers

    Although the on-premise model with its control and security advantages will dominate the enterprise communications market in the immediate future, the revenue share of hosted services is poised to increase significantly, according to Frost & Sullivan. Hosted communications services present an ever more popular alternative for deploying IP telephony and unified communications applications.

    New analysis from Frost & Sullivan – European Hosted IP Telephony and Unified Communications Services Market – finds that the hosted IP telephony market in Europe earned revenues of €0.9 billion in 2010 and estimates this to reach €4.9 billion in 2016.

    "The hosted IP telephony and UC services market in Europe is witnessing rapid growth mainly due to the increasing awareness about hosted solutions and improved feature sets," notes Frost & Sullivan Industry Analyst Dorota Oviedo. "The economic slowdown and limited capital availability for investments urged many enterprises to consider alternative communications delivery methods."

    Once companies experience the actual functionality and service level offered, they become more comfortable with communications being delivered as a service. Services are becoming more mature, offering a complete PBX capability rather than the limited functionality of Centrex solutions previously witnessed in the market.

    "With the economy rebounding, companies will continue using hosted IP telephony services," adds Oviedo. "At the same time, they are also expected to complement them with new communications and collaboration applications."

    The European hosted IP telephony and UC services market is highly fragmented. All the major enterprise communications providers and vendors show interest in tapping this opportunity to leverage the strong customer demand for operational expenditure (OPEX)-based solutions.

    However, building a distribution channel is one of the key challenges faced by this growing industry.

    "Channel partners need to be educated on the benefits of predictable revenues based on recurring monthly revenues and commissions, which are less sensitive to the general economic fluctuations and will increase as hosted services gain traction," concludes Oviedo.

  • Consumer LBS Market – a Multi-Billion Dollar Opportunity

    New analysis from Frost & Sullivan , 2010 North American Consumer Location-based Services (LBS) Market – The Wireless Carrier Opportunity, finds that the wireless carrier-generated segment of the North American consumer LBS market amounted to on-deck application software revenues of approximately $718 million in 2009 and forecasts this to reach $1.58 billion in 2015.

    The consumer location-based services sector has experienced tremendous change during the past eighteen months, forcing North American wireless carriers to cope with a vastly different competitive landscape.

    According to the research group, carrier dominance in the North American consumer LBS sector, which was carefully developed during the past decade, is now being directly assaulted by smartphone application storefronts and free off-deck solutions.

    The analysts think that wireless carriers must become more creative and aggressive in leveraging their unique assets if they want to successfully carve out and keep a significant portion of this sector’s potential revenue. Powerful technology and greater customer awareness are driving the consumer LBS market and providing even more opportunities for carriers to partner with top-tier application developers and create, launch, and promote new LBS solutions.

    "In tandem with smartphone advances, carriers are making their networks and locationing capability more accessible to LBS application developers," said Frost & Sullivan Senior Industry Analyst Jeanine Sterling. "Partnerships with location aggregators, open application programming interface (API) platforms, and simpler, quicker certification reviews make it easier for LBS developers to stake a claim to the market."

    However, new monetization models and higher channel fragmentation encourage smartphone users, in particular, to bypass wireless carriers and download LBS solutions directly from the phone’s application store. The majority of location-based applications available through smartphone storefronts are free or available for a one-time fee. In such an environment, carriers will have to strategize cleverly to justify their monthly subscription model. They will also have to find ways to appeal to a smartphone user population that is quickly growing in terms of size and demands.

    According to Sterling, wireless carriers have to bring a strong marketing sensibility to the consumer LBS sector. Their gatekeeper role and control over products and partners have disappeared in the smartphone sector and has been weakened with feature phone users. Carriers need to decide where they can compete successfully in this sector.

    "Some LBS solutions – such as the kid finder services – are just an automatic and perfect fit. Other applications and capabilities may not be as obvious. To thrive in this market, carriers have to be real marketers – monitoring customer needs, identifying product voids, working with creative partners, and publicizing the distinct benefits that carriers bring to today’s mobile user," advises Sterling.

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  • Mobile VoIP Becomes a Threat to Tradicional Voice Revenues

    Mobile VoIP is no longer just hype, but has become a credible threat to traditional voice revenues, says Frost & Sullivan.

    According to the research group, considering, that this is only a matter of time when IP becomes the principal transport for various access technologies, an ambitious group of mobile VoIP start-up companies are creating a paradigm shift in the way users communicate with each other, with voice services moving to a true internet era of Telco 2.0.

    New analysis from Frost & Sullivan, Impact of Mobile VoIP on Next Generation Cellular Networks, finds that at the end of 2008, approximately $605.8 million of mobile VoIP revenues were generated in North America, Europe, Asia Pacific and Latin America. This is expected to grow to $29.57 billion by 2015.

    The technologies covered in this research service are high-speed packet access (HSPA), third-generation long-term evolution (3G LTE), global system of mobile communications (GSM), IP multimedia subsystem (IMS), HSPA+, general packet radio service (GPRS), voice over Internet protocol (VoIP) and session initiation protocol (SIP).

    "The emergence of flat rate mobile data pricing, positive growth of smartphone shipments, and high-speed mobile broadband availability has spurred the adoption rate of mobile VoIP," saiid Frost & Sullivan Senior Industry Analyst Saverio Romeo.

    He added that mobile operators realise they can no longer ignore the fact that mobile will be a key component of integrated IP-based communications and next generation wireless technologies such as HSPA+ and LTE.

    According to the report, significant traction in the application space, primarily driven by the success of the iPhone, has resulted in several smartphone vendors making provisions in their applications stores for users to download and use third-party VoIP clients over both wireless fidelity (WiFi) and cellular broadband networks.

    “However –the report continues– many cellular operators have prohibited the use of mobile VoIP over their cellular networks, with some imposing a surcharge to avoid cannibalisation of their circuit-switched voice revenue streams. Moreover, cellular operators face intense competition from the more popular Web-based VoIP alternatives that are permeating the mass market.”

    Romeo claims that despite user demand for cost-effective services, some mobile operators will continue to discourage mobile subscribers from using VoIP over cellular networks and suggest that it will not provide the same quality, efficiency and reliability of services offered by the GSM network.

    "Recent surveys indicate that nearly 60 to 70 per cent of the major European mobile operators prohibit or restrict the usage of VoIP over their popular mobile broadband data plans," he said.

    Analysts say that mobile operators should eventually do away with imposing bans or surcharges to their mobile broadband packages to support mobile VoIP, as the client devices supporting HSPA+ and LTE will be based on open platforms and support SIP for third-party applications.

    "When the operators migrate to an all-IP IMS network, they should drive innovative services such as multimedia telephony, high definition voice, integrating voice with context-based information about the user, and the device from a converged presence-enabled address book," concludes Romeo. "This will enable them to differentiate their services from mobile VoIP start-ups."

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  • Report: European Videoconferencing Endpoints Market

    Videoconferencing has proved to be a viable solution for companies that are reducing their travel expenditure, thereby boosting the European videoconferencing endpoints market growth, says Frost & Sullivan.

    New analysis from the research group, European Videoconferencing Endpoints Market, finds that the market earned revenues of $383.6 million in 2009 and estimates this to reach $1.03 billion in 2015 at a compound annual growth rate of 18.0 per cent.

    According to Frost & Sullivan, the major growth factors of the videoconferencing endpoints market in Europe include the need for companies to decrease travel expenses, search for alternative ways to meet their workers and clients and the stringent environment policies imposed by the European Parliament.

    Additionally, videoconferencing is stepping up the decision-making process and enhancing teamwork in the more-than-ever dispersed workforce.

    "The videoconferencing endpoints market has been witnessing a slow transformation in the recent years, largely attributed to the introduction of high-quality products, such as high-definition conferencing and telepresence, the market’s shift towards converged audio, video and web conferencing solutions, and integration with other existing collaborative applications," states Iwona Petruczynik, Frost & Sullivan Research Analyst.

    However, the report says, the European videoconferencing endpoints market is restrained by several factors. For example, the misconception that videoconferencing services are communications tools used only by large enterprises is hindering the adoption among small and medium businesses.

    Moreover, new communications and collaboration vendors are delivering videoconferencing as a part of a unified solution, creating a one-stop-shop for their customers; however, this is hampering the growth of standalone videoconferencing providers. Poor infrastructure and low bandwidth, especially in the Central and Eastern Europe (CEE), also have adverse effects on the videoconferencing endpoints market growth.

    "The two main challenges with which the market is constantly battling are – the long-standing belief that videoconferencing is a complicated tool, reserved only for the top level management in large enterprises, and the rise of unified communications (UC), where audio, web, and video-conferencing tools are converging," said Petruczynik.

    Analyst claims that overcoming the first barrier is a constant challenge for vendors. However, with the recession spurring the growth of videoconferencing, these collaboration tools and their benefits have been brought to the fore, especially their increasing ease of use.

    “Videoconferencing vendors should be able to proactively address their clients’ needs and evolve constantly in this market. The trend of shifting towards UC is leading to an increased attention to the adoption and usage of visual collaboration in business,” concluded Petruczynik.

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  • Need for Converged Devices Makes a Case for Smartphones in India

    According to Frost & Sullivan, smartphones are expected to hit “a purple patch” in the Indian market, as consumers increasingly seek a single converged device to support multiple functionalities on the go. Smartphones cater to both individual and enterprise users due to their consumer- and productivity-centric approaches.

    Analysts claim that the application development community and mobile operating systems participants are the key enablers of smartphone ecosystem, wherein users prefer a single point of access and management of content. In this scenario, product innovation and the application portfolio will be the primary market growth drivers.

    "With Web 2.0 (social networking, microblogging) technologies gaining traction and the youth demographic keen on adopting smartphones, applications are expected to emerge as the key differentiating factor," says Frost & Sullivan Senior Research Analyst Thejaswi Parameshwaran.

    "Touch screen technologies and customized interfaces in terms of innovative product features will also propel the market ahead."

    With the urban markets having matured in terms of feature phone usage, numerous mobile users in this demographic are looking to upgrade to a smartphone. This replacement market will be predominantly populated by the younger demographic, which are early adopters of technology and avid users of Web 2.0 technologies.

    "The smartphone ecosystem is looking to build a distinct identity in the application community with handset manufacturers, service providers, and operating system developers having content portals that enable consumers to access a wide variety of applications," notes Parameshwaran.

    "However, over 70 percent of the population consumes only voice services, and data services have not yet gained traction, which can slow down the adoption rates of smartphones."

    To compound participants’ issues, the existing data bandwidth is insufficient to support data-intensive applications. They are hoping to remedy this issue and support smartphone-based applications by deploying high-speed 3G networks, as Frost & Sullivan claims.

    According to the report, in a highly competitive market where handset manufacturers and service providers vie for subscribers, a comprehensive value proposition is likely to be the factor that will tip the scales. Both these stakeholders will be aiming to lure consumers with an end-to-end service offering, significant investment in product R&D, and attractive revenue sharing agreements with content developers.

    Meanwhile, with the emergence of open source operating systems, there is a paradigm shift toward a collaborative ecosystem, wherein participants leverage each other’s expertise. This has fostered an environment of strategic alliances that will help offer a one-stop shop for handsets, data plans, and the point of access for an application ecosystem.

    "All participants of the ecosystem will have to collaborate to develop an end-to-end value proposition that will engage consumers and thereby, increase customer loyalty and satisfaction," observes Parameshwaran.