IP telephony adoption is shooting up among organizations, as workers become increasingly enamored by the enhanced mobility that the technology provides, say industry observers.

In 2002, sales of IP PBX (Internet Protocol Private Branch eXchange) systems in the Asia-Pacific region, excluding Japan, was US$100.8 million. Three years later, that number swelled by 10 times to reach US$1.1 billion, according to consulting company Frost & Sullivan.

An IP PBX is a telephone switch that supports voice over IP (VoIP). IP PBXs convert IP phone calls into traditional circuit-switched TDM (time division multiplexing) connections for the PSTN (public switch telephone network). They also support traditional analog and digital telephones, allowing enterprises to eventually migrate to an all-IP telephony environment.

Conversely, sales of traditional PBX systems have been falling steadily in the region since 2003, where revenues from the systems dropped from US$1.4 billion in 2002 to US$1.3 billion. By 2010, this market is expected to be worth only US$294 million, according to Frost & Sullivan forecasts.

Teyew Sin Siew, head of telecoms research at Frost & Sullivan Asia-Pacific, told ZDNet Asia that the region's enterprise IP telephony market is "picking up tremendously".

"Enterprises are either migrating totally onto [a pure IP telephony] platform or going to IP-enabled PBXs," he said.

Frost & Sullivan expects sales of IP-PBX systems to post a strong compound annual growth rate of 16.7 percent, from now, to eventually reach US$3.2 billion by 2012 in the Asia-Pacific region.

The main vendors supplying these systems include Avaya, Cisco Systems, NEC and Nortel Networks. Cisco, for example, reported strong sales of its IP telephones in the region.

Simon Lim, solutions market manager at Cisco Asia-Pacific's unified communications division, told ZDNet Asia that in the first three quarters of the company's fiscal year, ended April 2006, Cisco has seen IP phone bookings increase by nearly 30 percent over the same period in the previous financial year.

Globally, Cisco has an installed base of over 8 million IP phones, he said. "The demand for IP communications is growing in all enterprises, even in small and medium businesses," he added.

Freedom of movement
Teyew noted that IP telephony allows workers to be more mobile in their own office. "When they move around an IP telephony network, one of the benefits is they can plug their phones into any LAN (local area network) points (and still retain their call preference)," he explained. "They can carry their [phone] extensions along to meeting rooms."

Robbie Kruger, who is Avaya Asia-Pacific's industry solutions manager, agreed, highlighting that contrary to popular belief, it is the benefit of mobility--and not so much collaboration--that drives enterprises to adopt IP telephony.

The biggest cost savings of IP telephony come from giving workers mobility, he said. "Using the same extension number, with an IP phone, I can move from room to room. It empowers users," Kruger said.

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