Avaya eyes IP telephony for AP growth

By Jeanne Lim, ZDNet Asia
Wednesday, August 17, 2005 03:13 PM
SINGAPORE--Avaya is hedging its bets on the surging Internet protocol (IP) telephony market to grow its Asia-Pacific business, said the company's top executives.

The communications applications and services vendor claims that its IP telephony product has crossed the 7-millionth mark in line shipments with customer ING Vysya Bank, a private sector bank in India. Avaya started tracking shipment figures in 2002.

"We're very pleased about this. Our closest competitor is at least a million lines behind us, by their own confession," said Peterson, in a thinly-veiled reference to rival Cisco Systems, during a media conference here Wednesday.

Vendors in this hotly contested space include Alcatel, NEC, and Nortel.

Sandra Ng, IDC Asia-Pacific's vice president of communications, verticals and peripherals research, declined to comment on Avaya's internally-generated figures, but she concurred that the enterprise IP telephony market is growing fast and that Avaya has taken the top spot since the first half of 2004.

IDC's research showed that enterprises in the Asia-Pacific region, excluding Japan, in 2004 spent a total of US$480 million on IP telephony lines and equipment, more than twice the US$218 million invested in 2003.

The firm's August 2005 preliminary research also revealed that 24 percent of the 2,000-plus companies surveyed across 11 Asia-Pacific countries are already using IP telephony, compared to 16 percent last year, said Ng.

IDC's findings match that of another research firm. According to Frost & Sullivan, Avaya led the Asia-Pacific IP-PBX market in 2004 with a 27.1 percent share, followed by Cisco at 21.7 percent, NEC at 12.7 percent, and Alcatel at 9.3 percent. Frost & Sullivan, however, valued the total market size at US$636.8 million.

Also noteworthy, is that fact that last year marked the first time that Avaya's IP line shipment revenues surpassed traditional (TDM) line shipment revenues. Based on Frost & Sullivan findings, Avaya's 2004 Asia-Pacific IP line shipment revenue was US$172.4 million, versus its TDM line shipments revenue of US$42.2 million.

In 2003, the vendors IP line shipment revenue was US$76.6 million, more than its TDM line shipment revenue of US$95.5 million.

But the top contender is not sitting on its laurels, emphasizing there is still much room for Avaya to grow, and that there are huge market opportunities in the region.

Noting that the Asia-Pacific region represents 25 percent of the IP telephony global opportunity, CEO Peterson said: "We're going to claw our way there in a few years."

Currently, the Asia-Pacific region makes up about 8 percent of Avaya's total revenues, and is growing at a "high single-digit" rate this year, said Mark Leigh, the company's Asia-Pacific president. "Our challenge is to take it, at least, into the double-digits next year."

Avaya generated US$4 billion in total revenues in 2004.

Leigh added: "One of the things we expect to do is to leverage the strong experience we've had in contact centers in the enterprise area."


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