IP Telephony Sales Estimated at
\100 Bill. Led by IP Contact Centers
--End-Users to Expand to Telecom., Large Cos. and SMBs
--Timing of Economic Recovery is Major Variable
The domestic IP (Internet protocol) telephony market, which was initiated by Cisco, Avaya, Nortel and other foreign network superpowers, attained notable growth last year, in line with an IP contact center building boom led by two leading domestic life insurance firms -- Samsung and Kyobo. But such growth from a limited number of companies leaves much room for improvement, industrial experts said. There is a long way to go before the IP telephony market reaches a wide scope of industries. The economic slowdown and lingering doubts about its growth potential are pulling it down.
Nevertheless, market survey institutes and the industry are still optimistic, convinced that IP telephony is not a passing trend, but will become a basic infrastructure in the IP environment. Besides, linking with business application solutions such as ERP (Enterprise Resource Planning) and CRM (Customer Relationship Management), it will be consolidated as a key tool to improve ROI (Return On Investment) and efficiency of businesses.
Average Annual Growth of 66%
The domestic IP telephony market is forecast to grow 66 percent annually on average over the next five years. According to the report, "Korean IP Telephony Service Market Analysis and Prospects," released by IT market survey firm Korea IDC Co., the domestic IP telephony market amounted to \63.5 billion won last year. Five years of growth will lead to \808 billion in sales by 2008.
Korea IDC said that due to cost advantages and integrated operations of voice and data networks IP telephony will be more useful to businesses than individuals. Furthermore, expanding Internet telephony services led by telecommunications service firms will power high growth. The domestic IP telephony service introduction ratio will jump from 23 percent last year to 30.7 percent this year, demonstrating that industry growth is on track.
By industrial sector, the telecommunications service industry led in terms of the IP telephony service introduction with a ratio of 48.9 percent as the industry actively built telephone service networks for their customers. General manufacturing firms showed a high introduction ratio, while retail and wholesale firms and universities posted very low rates of below 10 percent each.
Market Expected to Rise to 100 Bill. This Year
Industrial experts said that despite the higher awareness of IP telephony, the economic recession is hindering industry growth. Most experts agreed that if the economy recovers this year, the market will achieve better-than-expected growth, but the situation is not too bright at the moment.
Actually, this year there were a series of potential IP contact center projects, but few of them led to actual contracts. As a result, skepticism prevails in the industry, but in view of the industry consensus that only the IP telephony sector can turn around the sluggish domestic network market, the expectation for the emerging field is bright. Industrial officials said that most of the new PBX-related (private branch exchange) investments this year will be channeled into IP telephony projects.
As a handful of unexpected customers of call centers have started to consider new investment, the industry will be on a gradual growth path, industry sources added. A survey group, Gartner, forecast that in 2004 the IP PBX market will surpass the existing TDM (Time-Division Multiplexing) PBX market across the world, and will continue to grow through 2007. Korea IDC also expected domestic IP telephony sales to reach $40 billion by 2007, and nobody doubts the growth potential.
The domestic IP telephony market was estimated at \50 billion last year and will double those sales by the end of this year. Based on higher awareness of the business and somewhat verified security and improved reliability of the business, the industry is looking forward to securing two or three contracts per company during the first half of this year.