IP Centrex is booming in EMEA, says analyst company Infonetics Research. In a recent report, Infonetics identified more than 100 service providers offering business VoIP services across EMEA, with more launching products each quarter. We think this is an underestimate, but there’s no doubting the attractiveness of the market opportunity. Gintel has considerable expertise in helping service providers of all sizes develop propositions, strategy and the right product portfolio to address the IP Centrex and Mobile IP Centrex opportunity. We are engaged in projects throughout EMEA and are well placed to help share our experiences with service providers considering launching business VoIP solutions. Learn more about how we can help.

A recent article* has suggested that the UK SME market is underserved by communications providers. Despite this, the SME segment contributes significantly to UK GDP, outperforming many larger corporations in terms of productivity. The 25 – 49 employee group alone contributes 8% of all GDP, but supports only 6.2% of the workforce. Contrast this with corporations with more than 250 employees, which support 52% of the workforce, but contribute only 50.2% of GDP.

The message is clear – there is a huge opportunity to address the needs of SME subscribers. IP and Mobile Centrex, with low capital requirements and manageable OPEX make a compelling proposition. Service providers need to consider the needs of smaller businesses and develop a targeted approach to capitalise on this opportunity. In our opinion, much of the growth in demand for IP and Mobile IP Centrex services will come from this segment, so it’s essential to launch the right services now in order to capture market share – and to secure the revenue and profits which will follow.

*Total Telecom, 14^th May 2010

Recent research from Moriana suggested that Apple gains between $20 – 45 million per billion application downloads. That’s a lot of effort and customer activity for a relatively modest return. If the UK IP Centrex market alone is worth around £43 million, this figure is put into stark perspective. What are the global numbers? What will they grow to in the next three to five years? Running an application store is an intensive business and that doesn’t sound like a great return – not unless you own the platform as well.

Service providers and operators simply can’t afford to ignore the IP and Mobile IP Centrex opportunity any longer. It’s a market with proven growth potential, clear revenue prospects and does not face the uncertainty of unproven application store business models.

IP and Mobile Centrex, with clear business models provide a much more attractive opportunity. Selecting a platform that scales effectively allows service providers to begin addressing the market and to add capacity with ease. If you haven’t seriously considered deploying an IP Centrex or Mobile IP Centrex solution, now’s the time to investigate your options.

According to recent reports, the UK IP Centrex market is expected to reach more than 2 million extensions by 2013*. This suggests a market with a potential value of at least £240 million from basic extension license costs alone, based on an approximate average price of £10 per user per month, increasing from around £43 million today. This represents excellent growth prospects and is likely to be mirrored in many other economies around the world. IP Centrex is now well and truly in the mainstream and is likely to experience significant growth globally.

*Comms Dealer, June 2010

Today, much of the attention of the telecoms and IT media seems to be focused on non-voice revenues. Figures, such as Cisco’s prediction of 3.6 Exabytes of mobile broadband traffic per month in 2014 grab the headlines. Similarly, forecasts for the declining value of broadband bits occupy much current debate in the telecoms industry. While that’s understandable, given the general decline in the per unit cost of simple voice and the proliferation of flat-rate plans with increasing numbers of minutes, it’s easy to forget that the majority of all mobile revenue is still generated by traditional voice-based services. What’s more, the data-centric view overlooks the fact that plain old voice still has real value with strong opportunities for growth and increased profit. You just have to look harder to find them.

Perhaps the most promising opportunity for good old fashioned voice lies in the Enterprise domain. Yet many operators and service providers struggle to offer a clear enterprise strategy and focus, and have a mixed product offering that doesn’t truly address the needs of the majority of enterprises, but reflects those of a selected number of key accounts.

Enterprises have a variety of needs, but the most important is simple communication, internally and externally. Since employees need to communicate with each other, with prospects, suppliers and customers, voice communications is at the heart of the enterprise. Get this right, and you solve many of their immediate problems. Of course, sophisticated solutions have emerged to meet these needs, such as the office PBX, but needs evolve and mobility is also becoming an essential consideration. User mobility means that they need access to the same voice communications features and functions across multiple devices and irrespective of their location.

Some operators and service providers are seeking to compete with office-based PBX solutions by offering hosted services in the form of IP Centrex. While IP Centrex meets the needs of fixed users and there are many terrific services available, offering the features and functions of a traditional PBX but in a more flexible fashion, the inclusion of mobility transforms the offer. Mobile Network Operators, of course, are best placed to capitalise on the evolved demands of enterprises, as they have the means to deliver communications anywhere. But, in the process they have to embrace a culture more focused on the general needs of the enterprise at large, rather than the specific needs of few marquee customers.

Mobile IP Centrex or Mobile PBX services combine the features of IP Centrex, but extend the capabilities directly to mobile handsets and devices, ensuring that all employees, regardless of location have access to the same features and functions that are available in the office. Mobile IP Centrex has the potential to liberate enterprise users from the constraints of their location and can provide a compelling product proposition necessary for mobile network operators to launch capitalise on opportunities to grow voice revenue profitably.

But that’s only part of the story. Mobile IP Centrex in and of itself is necessary, but not sufficient as a solution: it is only part of the proposition. Today’s enterprise customers look for more than simply a compelling product. They are as discriminatory as the most selected consumer customers. They need a compelling proposition that delivers on several other key requirements.

1. With capital constraints growing ever more stringent, enterprises are looking for ways to lower their capital budgets.
2. Enterprises also need to manage their operating expenses.
3. Enterprises need to obtain real efficiency and productivity benefits from the solutions they adopt.
4. Finally, enterprises also need to consider the most efficient means of deploying their own resources.

Mobile IP Centrex helps enterprises meet all of these goals. How?

1. There is no major upfront capital investment.
2. Operating expenses are shifted to predictable monthly rental bills for each user.
3. The seamless transition between fixed and mobile devices and the ability to enjoy the same features on the road as when in the office promotes productivity and efficiency, truly liberating employees and ensuring that they can operate as effectively inside or outside the office.
4. Finally, maintaining costly, capital intensive solutions in-house places demands on the organisation. Instead of managing a bloated system, IT analysts and support staff can spend their time more profitably designing processes that further enhance the organisation, adding real value rather than simply looking after an investment.

Voice in the form of Mobile IP Centrex can become part of a compelling proposition for enterprise customers, but it’s essential to emphasise the associated benefits. The ROI is much more than based on the feature set. For mobile operators to carve out a significant share of the enterprise service market, they need to focus on these attributes and ensure that a fully rounded proposition is made clear to potential customers. Ultimately, this is what will differentiate one service provider from another and allow them to grow voice revenues profitably.

What’s more, the chosen solution needs to be future proof. With IMS on the horizon, if not already deployed, service providers have to select a platform that is truly network independent and supports the converged environment enabled by IMS. With major network evolution in progress, the Mobile IP Centrex solution must be able to operate seamlessly regardless of the ongoing network transformation.

Why not talk to us and see how we can help create a truly compelling proposition for your customers?

Tore Saeter, August 2010