Study: Asian IP telephony market to double yearly

The market for IP telephony in the Asia-Pacific region will more than double each year to be worth $US6.9 billion by the year 2005, according to a new report from market researcher International Data Corporation (IDC).

          The market for IP (Internet Protocol) telephony in the Asia-Pacific region (excluding Japan) will more than double each year to be worth $US6.9 billion by the year 2005, according to a new report from market researcher International Data Corporation (IDC).

          The region's IP telephony market is currently worth $US213 million, IDC says. As defined by IDC, the IP telephony market covers calls made over the public Internet, but not those made through a corporation's private networks. It is therefore subject to regulation in many countries, which may hamper its growth, according to IDC.

          Currently, the major markets are Australia, Korea, Hong Kong and Singapore, but IDC expects the next wave of growth to come from China, India and Taiwan -- regulations permitting. Many markets including India and Taiwan still do not allow IP telephony, as regulators fear it may cannibalise the national and international call revenues of the incumbent carriers. The speed at which the IP telephony market develops will mainly depend on the speed and extent of telecommunications deregulation.

          National long distance and international calls using IP telephony can now be made at 30% to 80% discounts from traditional IDD (international direct dial) or long distance rates, according to IDC.

          The number of new market entrants, growth in internet penetration, electronic commerce and on-line transactions as well as overall awareness of IP telephony will also be major contributors to the growth of this market. Inhibitors include regulations, low internet penetration and the slow pace of IP infrastructure deployment, IDC says.

          In particular, government intervention policies such as the 'domestic products only' purchasing policy by the Korean government in the first half of 2000, the high cost of existing hardware investments such as traditional PABX (private automatic branch exchange) systems and local taxation laws may slow IP telephony adoption, according to IDC.

          But IDC expects the IP telephony market to grow rapidly in the next five years due to the strong moves made by many Asian governments to open up or further deregulate their telecommunications sectors. Those governments now accept that such a move will help to boost their local economies, IDC says.

          The IP telephony hardware market was worth just under $US300 million in the fist half of 2000, according to IDC figures. Sales of IP-PBX (Internet Protocol private branch exchanges), voice-enabled routers, voice-enabled switches, voice-enabled remote access servers and voice gateways, should begin to take off next year, IDC says.

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