VOIP to exceed traditional telephony in 2006

The number of voice over Internet Protocol (VOIP) systems sold worldwide in 2006 is set to overtake the number of traditional telephony systems, says Paul Butcher, CEO of Mitel Networks.

Butcher was speaking at a seminar organised by Mitel Networks SA at the Melrose Arch this week.

He said Mitel has already gone through the crossover threshold, with IP telephony accounting for 90% of the company`s sales revenues in 2005. He said Mitel shipped 30 000 IP telephone systems worldwide, with 385 units shipped in SA.

However, analysts say 2006 is not the crossover year for VOIP sales in SA. MarketWorks business and strategy advisor Craig Terblanche says it will take at least three years before sales of VOIP telephony systems exceed traditional telephony sales in SA.

"Our local telephony environment is way behind Europe due to lack of competition, customers sweating the assets and the regulatory environment only beginning to transform recently," he says.

Richard Hurst, an analyst with BMI-TechKnowledge, agrees 2006 is not a crossover year for SA.

VOIP will only start making serious inroads into the telephony market in SA around 2007/8, he says. However, 2006 is going to be interesting in terms of VOIP as companies test it for viability, he says.

In addition to broadband availability and pricing, VOIP adoption would also be influenced by the availability of application software that can improve network efficiencies, Hurst says.

Butcher said that in the past, VOIP was sold on the basis that it saved telephony costs. However, sales of IP telephony systems are driven by the need to accomplish more with fewer resources, thus extracting maxim return on investment. In the future, there will be greater focus on improving business processes, he noted.

Campbell Williams, head of solutions marketing for the EMEA region at Mitel Networks, said intelligent, intuitive IP telephony would allow the user to work anywhere, anytime as if they were in their offices. Calls to the fixed-line at the office would be redirected to the mobile phone if the user was on the move, or to a 'hot desk` if the user was working at another venue, he said.

Customers and colleagues would require only one telephone number to connect with the user, he said. The ability to register the presence of users on the network regardless of their location also allows users to find colleagues and staff, establish whether they are available or on call and collaborate easily.

Williams and Butcher also noted that IP telephony could help considerably in keeping the cost of cellular phone usage down. Quoting a Gartner study conducted in the UK, Williams said mobile calls account for 64% of business calls made.

Calls between employees while in the same building accounted for a third of the mobile calls, he said, while calls from home accounted for 15% to 20%. These calls are an unnecessary expenditure that would not need to be made if the company was using an IP telephony system, Williams said.