IP Telephony driver for UC

Adoption of IP Telephony to Spur the Deployment of Unified Communications Solutions in Kenya, Finds Frost & Sullivan

May 4, 2010

Adoption of IP Telephony to Spur the Deployment of Unified Communications Solutions in Kenya, Finds Frost & Sullivan

A rise in the uptake of Internet protocol (IP) telephony is expected to drive the increased deployment of unified communications (UC) solutions in Kenya. The landing of the undersea cable and resultant greater availability of bandwidth will provide an additional growth stimulus. However, the large installed base of legacy equipment and limited understanding of the merits of advanced communications technology necessitate the need for consumer education in order to promote increased market adoption of IP and UC solutions.

New analysis from Frost & Sullivan (http://www.enterprise.frost.com), the growth partnership company, finds that the Kenyan UC market earned revenues of $101.9 million in 2008, and estimates this to reach $134.3 million in 2015. The sectors covered in this analysis are business and financial services, telecommunications, government and others such as healthcare, hospitality and manufacturing.

“Early adopters like large enterprises are deploying IP telephony and UC solutions, thus promoting market growth,” says Frost & Sullivan ICT programme manager Birgitta Cederstrom. “Large enterprises typically have multiple branch offices, mobile or remote works, and seek to consolidate several resources to reduce costs. The business and financial services industry (BFSI), telecommunications, and government sectors are early adopter segments.”

Growth in the telecommunications sector is driving demand for innovative products and services, creating new information and communication technology (ICT) requirements such as IP telephony and UC solutions.

However, some organisations do not see the immediate value of adopting UC solutions. High investments in stand-alone technologies make it difficult to justify new purchases, as the return on investment on the existing systems is not fully realised.

“Large investments made in legacy equipment along with the cost perceptions about IP telephony are the greatest threat to the growth of the Kenyan UC market,” explains Cederstrom. “Pricing is often out of the reach of local companies as the industry is largely dominated by small and medium-sized enterprises (SMEs).”

One of the main concerns for both SMEs and large enterprises is appreciating the benefits of migrating to IP technology and advanced solutions such as UC. Price is an important factor for companies contemplating on a purchase decision, particularly in the case of telephony solutions that are generally considered expensive. Therefore, market participants should consider price discounts for highly price-sensitive end users.