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Hosted IP Telephony Presents Excellent Growth Opportunities to European Service Providers: Frost

March 16, 2011

The hosted IP telephony in Europe registered revenues of EUR 0.9 billion in 2010 and the annual revenue may reach EUR 4.9 billion in 2016, according to Frost & Sullivan, an independent research firm.

Hosted communications services will offer more opportunities for deploying IP telephony and unified communications (UC) applications.

The growth in hosted IP telephony is despite the advantages of the on-premise model. Though the on-premise model with its control and security advantages will dominate the enterprise communications market, the revenue share of hosted services will increase significantly.

“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,” said Dorota Oviedo, industry analyst at Frost & Sullivan, in a statement.

Services are becoming more mature, offering a complete PBX capability rather than the limited functionality of Centrex solutions previously witnessed in the market, Frost & Sullivan said in the report called “European Hosted IP Telephony and Unified Communications Services Market.”

According to Frost & Sullivan, the European hosted IP telephony and UC services market is fragmented. All the major enterprise communications providers and vendors show interest to tap the customer demand for operational expenditure (OPEX)-based solutions.

Frost & Sullivan is suggesting channel partners 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.

According to an Infonetics Research report, enterprise telephony market was hit hard in 2009 due recession. Businesses are increasingly embracing a hosted services model, as their capacity needs will depend on the economic recovery.

In a related story, a battle for supremacy between Avaya and Cisco, and an interest by businesses in green initiatives are two of the key trends shaping up on the unified communications front, according to new studies from Infonetics Research and Frost & Sullivan. The introduction of the iPhone 4 also has brought a new angle to the UC landscape.

Rajani Baburajan is a contributing editor for unified communications. To read more of Rajani's articles, please visit her columnist page.

Edited by Jennifer Russell