Asia/Pacific IP Telephony Services Market Is Worth US$213 Million in 2000, IDC Reports

NORTH SYDNEY — DECEMBER 8, 2000 — The Asia/Pacific (excluding Japan) IP Telephony Services market is projected to be worth US$213 million in 2000, and this is expected to grow to US$6.9 billion at a CAGR of 104% by 2005. Currently, the major markets are Australia, Korea, Hong Kong and Singapore, but IDC expects the next wave of growth to come from PRC, India and Taiwan, regulations permitting. Many markets including India and Taiwan still do not allow Internet Telephony, as this will cannibalize the national and international call revenues of the incumbent carriers. However, this is changing as more people have access to the Internet and the ability to monitor calls made over the Internet is becoming more and more difficult.

 

Unlike the US and European markets where IP Telephony services have been provided for some time, this market is still in its nascent stage in the Asia/Pacific region. For the purpose of this research, two portions of the market have been identified, Internet Telephony and Voice over Internet Protocol (VoIP). Calls made over the public Internet is classified as Internet Telephony, while calls made through a corporate's private networks are known as VoIP. This report covers both the equipment and services markets for IP Telephony in the region.

Accelerators in this marketplace include the opportunities for value-added services like video-conferencing and the demand for low cost calls. National long distance and international calls using IP Telephony can now be made at 30% to 80% discount from traditional IDD or long distance rates, making it a much cheaper alternative for both the residential and business segments. Inhibitors include regulations, Internet penetration and the pace of IP infrastructure deployment.

According to Simon Chew, Senior Analyst of IDC Asia/Pacific Datacommunications Research group, "The opportunity of the IP Telephony market will mainly depend on the speed and extent of telecommunications deregulation. The number of ITSP entrants, growth in Internet penetration and eCommerce/on-line transactions and the overall awareness generated by the hardware vendor community will also be major contributors to the growth of this market. Key inhibitors include government intervention policies (for example, the 'domestic products only' purchasing policy by the Korean government in 1H 2000), high cost of initial hardware investments (for example the traditional PABX systems) and local taxation laws.

Nevertheless, IDC expects the IP Telephony market to grow rapidly in the next 5 years due to the strong positioning taken by many Asian governments to open up or further deregulate their telecom sectors as they believe that such a move will help to boost their local economies."

The Asia/Pacific (excluding Japan) IP Telephony equipment market is also currently in an embryonic stage. As at the first half of 2000, operational networks are mostly found in leading edge ISPs, ITSPs and carriers – and limited at that. Most corporations are currently beta-testing platforms and products, and government regulations in countries like Taiwan and Korea have a significant impact on the adoption rate. In general, corporates are adopting phased migration plans to introduce voice into their networks.

IDC estimates that the IP Telephony hardware market, i.e. IP-PBX, voice-enabled Routers, voice-enabled Switches, voice-enabled RAS and voice gateways, to be just under US$300 million for the first half of 2000. Most vendors are only expected to have major rollouts around the Q4 2000 time frame. The major markets for IP Telephony hardware are PRC, Korea, and Australia. Barring a major economic disaster, 2001 should be the take-off ramp for IP Telephony hardware and by 2005, IDC predicts that the overall A/P market for equipment to be in the region of US$4 billion.

More information such as the above can be found in IDC's report "Asia/Pacific IP Telephony Market: Analysis and Forecast, 2000-2004". The research provides an in-depth (country by country) analysis of key and emerging trends in the IP telephony (services and equipment) market across the Asia/Pacific region. The report also profiles key and emerging IP Telephony service providers (ITSPs) in major and emerging markets like Australia, Korea, PRC, Hong Kong and Singapore. It looks at their service offerings, infrastructure deployment and strategies. Some of the service providers profiled include carriers like Singapore Telecom and China Unicom, ISPs like Pacific Internet, and ITSPs like Wherever.net and SK Telink.

To purchase the report, please contact John Mlynowsky at (02) 9925-2237 or email jmlynowsky@idc.com

About IDC:

IDC is the foremost global market intelligence and advisory firm helping clients gain insight into technology and eBusiness trends to develop sound business strategies. Using a combination of rigorous primary research, in-depth analysis, and client interaction, IDC forecasts local and worldwide markets and trends to deliver dependable service and client advice. More than 700 analysts in 43 countries provide global research with local content. IDC's customers comprise the world's leading IT suppliers, IT organisations, eBusiness companies and the financial community.

Additional information can be found at www.idc.com.au

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The Asia Pacific IT Forum is recognized as the most prestigious information and communication technology conference in Asia. It provides an invaluable opportunity to meet key industry personalities and enables attendees to exchange ideas and discuss important topics with the most influential users and opinion leaders in the IT industry. More than 1000 IT professionals / business leaders attended the event in January 2000 and CEOs/Senior Executives from leading organizations provided the attendees with their vision on the new economy. More than 100 journalists also attended the event and provided a comprehensive coverage in the most important and renowned publications across Asia.

Once again, in February 2001, IDC will be holding a two-day Asia/Pacific IT Forum in Singapore which aims to provide an in-depth analysis on the state of the e-economy in the region. Senior IDC analysts and distinguished speakers from sponsoring companies will address the challenges and opportunities associated with e-commerce in the Asia/Pacific region.