Slow but steady development of VoIP in Western Europe

Stuttgart, Germany - 2nd October, 2002 - InfoCom's recent research shows that although most manufacturers now offer IP PBX (PBX systems also offering VoIP) and although these should quickly represent the majority of the sales, the development of VoIP within companies remains slow in Western Europe.

There are five main factors slowing down the development of VoIP in Western Europe. Firstly up until recently the quality and reliability was not always guaranteed. Although this has been now by and large solved, the perception (by telecom managers) lingers on. Secondly, although one of the main arguments to buy IP solutions is to save money in running only one network and system instead of two, IP solutions are currently still more expensive particularly as they require initial upgrading of network, software, terminals etc. Thirdly, in the current economic climate, companies are cautious in their investments and new technologies are viewed with peculiar prudence. Thus many companies are waiting to see how the technology and prices evolve in the medium term. Fourthly the distribution channels are not quite ready as some IT resellers lack telecom knowledge, while some telecom resellers lack IT competence. Finally, there are organisational and cultural barriers, particularly within large organisation, as the presence of separate telecom and IT departments and managers make the marketing, selling and implementation of IP telephony quite challenging.

So in about 70% of the cases IP PBX are still sold and installed as pure PBX solutions and when they are installed to provide both standard and VoIP, IP stations represent typically about 15% of the total lines. In addition full IP installations are still the exception (less than 1%), so that IP stations represent currently about 4% of all lines. Thus 2004 or 2005 are felt to be more realistic years for a real take-off of VoIP in Western Europe.

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InfoCom is a market research and consultancy company with over 15 years experience providing strategic planning assistance to stakeholders in the telecommunications and multimedia industry. InfoCom’s independent and fact-based perspective on the telecommunications and multimedia environment contributes to decision makers understanding of market dynamics, trends and opportunities in the key markets.