Irish Corporates Demand Lower Voice Telephony Costs, Says IDC

DUBLIN – SEPTEMBER 20, 2002 – Large Irish organisations are expecting to pay a lot less for voice telephony in 2002 than they did last year, according to a survey conducted by IDC into the Irish telecoms market. A total of 38% of those organisations with more than 500 employees expect their voice expenditure in 2002 to be lower than last year.

 

A large proportion (31%) of respondents believe their overall telecoms expenditure will be higher this year than last. However, nearly a quarter or organisations (23%) take the opposite view. Most expect the share taken up by data communications to increase and the voice share to decrease. Survey respondents estimate that, on average, 46% of their telecoms budget goes on voice telephony.

The economic downturn of 2001 had very little effect on telecoms expenditure, with only 6% of organisations spending less than they had planned to do. Meanwhile, significant 27% of organisations spent more than their original budget, and among organisations of over 500 employees the figures rose to 44%.

"This over-spend by so many organisations strongly suggests that prices are not falling as quickly as might be expected by customers. However, this year the larger customers are expecting lower prices and have adjusted their budgets accordingly," said IDC Consultant, John Gilsenan. "This underlines the low level of competitive pressures in the Irish market."

Lack of competition, and consequent high prices, are also part of the reason why, in the mobile sector, average revenue per user (ARPU) in Ireland is among the highest in Europe. This will decrease slightly over the next few years and IDC believes that there is still growth to come from the mobile sector in Ireland, with user penetration increasing even further. Mobile data services will be a key driver of growth.

Wireless LANs are already in use in more than a third of all large organisations in Ireland, while the government sector is the most receptive to this technology.

Much has been written about the dearth of broadband access in Ireland. Now that DSL offerings have been launched by both Eircom and Esat BT, it remains to be seen how quickly it will be adopted. IDC believes that take-up will be slow because of the high price set for those users who should benefit most from the offering – small businesses and home users.

IDC's study Telecoms Trends and Expenditure in Ireland 2002 (IDC #QU02J) offers an up-to-date overview of telecommunications spending trends and forecasts in the Irish market. Starting from buying plans for telecoms solutions, the study explores major drivers and trends in telecoms adoption among Irish enterprises.

On the quantitative side, the focus is on spending on data and voice as well as market sizes and forecasts (2002-2006) for the Irish telecoms market.

To purchase this document, call your local IDC office or visit http://www.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 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 organizations, ebusiness companies, and the financial community. Additional information can be found at www.idc.com.

IDC is a division of IDG, the world's leading IT media, research and exposition company.

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