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AMI-Partners: Telecom Spending among Asian SMBs to Cross USD$50B This Year
SINGAPORE --(Business Wire)-- Small and medium businesses (SMBs, or companies with up to 999 employees) across the Asia-Pacific region outside of Japan (APeJ) are on track to invest US$50 billion on telecommunications equipment and services this year. This is up some 5% over 2006, according to the latest study by New York-based Access Markets International (AMI) Partners, Inc.
"SMBs look toward telecom operators and service providers to offer telecom services to enable profitable business growth," says Prasannavadan Gaitonde, Singapore-based analyst at AMI-Partners. "SMBs have to work harder for earning their dollar. They have tighter budgets and need high quality, low-priced telecom solutions and services."
AMI's findings reveal that developed markets such as Australia and South Korea, and fast-growing markets like India and China will account for more than 70% of the APeJ telecom spending this year. "The market is witnessing a transition from traditional PBX to IP-based PBX, with most new replacements going the IP way," Mr. Gaitonde says. "While the base switch is going IP, the end points are moving to IP more slowly. This is due to the higher price of IP end points over digital end points."
In 2006, only 8% of desk phones of medium businesses (MBs or companies with 100 to 999 employees) in a mature market like Australia had IP phones. Session Initiation Protocol (SIP) will reduce the price, making such solutions even more affordable. As for Unified Messaging--which can be considered a precursor to the more advanced Unified Communications--only 16% of Australia's MBs are utilizing this service.
"SMBs are as interested in advanced solutions like Unified Communications as large businesses," Mr. Gaitonde says. "The difference is that SMBs have smaller budgets and need higher justification for spending their budgets on such services."
As services mature and can be provided on a hosted model, SMBs can deploy enterprise class solutions. Once these enterprise class solutions are offered as a service--similar to SaaS (software as a service)--SMBs can adopt them at the right price points. Hosted communication services or managed telephony services can be provided by telecom operators and service providers in partnership with equipment vendors to provide low-cost solutions to SMBs.
Hosted communications or managed telephony services are set to grow more than three times the growth rate of premises-based equipment among SMBs over the next 3-4 years. Equipment vendors, telecom operators, and service providers need to work together to provide such hosted solutions to SMBs across the Asia-Pacific region.
MBs are expanding their horizons and need more connectivity between offices. Thus, spending on wide area network (WAN) services is expected to go up by a huge 24% in 2007 over 2006 among MBs. More than one in four MBs in this region is currently connected using WAN. In Australia, more than 75% of its MBs are connected by WANs.
"SMBs in the Asia-Pacific will continue embracing new technologies to remain competitive," Mr. Gaitonde says. "Telecom equipment vendors, operators and service providers need to offer products and services using the right model and price points to tap this growing market."
Related Study
AMI's Asia/Pacific SMB Global Model Market Forecast combines primary and secondary research to develop overall SMB market sizing and forecasts. The SMB Global Model tracks a broad spectrum of products and services, including computing, internet and connectivity, networking, storage, security, software, telephony, and services and support. Additionally, it also provides firm counts as well as shipments and installed base data for an extensive list of categories. Telecom equipment and services covers the following: Telecom equipment covers traditional and IP PBX, Wireless and Mobile phones and pager equipment spend whereas Telecom services covers Hosted Telephony including IP Centrex, Local and IDD / Long distance telephony spend, Mobile phone and pager service spend as well as WAN services spend which includes frame relay, ATM, leased line, IP WAN and related services including any additional charges built in for QOS/SLA.
For more information about this study, AMI-Partners, or our global SMB research, please call 212-944-5100, e-mail ask_ami@ami-partners.com, or visit the AMI Web site at www.ami-partners.com.
About Access Markets International (AMI) Partners, Inc.
AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence -- with a strong focus on global small and medium businesses (SMBs), and extending into large enterprises and home-based businesses. The AMI-Partners mission is to empower clients for success with the highest quality data, business strategy perspectives and "go-to-market" solutions. Led by Andy Bose, the firm has built a world-class management team with deep experience cutting across IT, telecommunications and business services sectors in established and emerging markets.
AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 25 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.
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