Leap of Faith



Nothing is more alluring to enterprises than being able to tone down their
communication link to one, from the existing two-data networks and traditional
telephone lines. VoIP allows one to route voice over an existing data network,
thus helping bypass PSTN toll charges, and bringing down calling costs, along
with other benefits. Although everyone is aware of VoIP, there is still lack of
clarity and understanding of the technology. This was apparent even in the
survey carried out by IDC in which companies stated ‘not legal’ as a reason
for not using the technology before de-regulation. Most corporates assumed that
VoIP was not permitted, although all along VoIP in a closed user group (CUG) was
legal.

In India, we will not see a complete migration to a single network because of
the ongoing regulation, barring calls from IP telephones or soft phones to
terminate on a PSTN in India from anywhere inland or overseas.

So what draws it?
So far, around 10% of Indian enterprises are already using VoIP for internal
connect between their branches and overseas offices. Shorter RoI and lowered
costs from using a single network, rate high among the reasons for having
implemented it. IDC has shown that the strongest motivator for using VoIP among
corporates is cost effectiveness, vis-à-vis other conventional modes of
communication.

The report shows that while more than half of the top corporates in the US
are not even considering implementing VoIP in their organization, 43% of Indian
corporates are considering it in the near future. One of the reasons for lower
adoption levels in the US and European countries could be because of low cost
toll structure of their PSTN networks.

New opportunities
"As the technology has only begun to be understood and people have
started considering it presents a huge opportunity to both carriers and solution
providers," says Parijat Chakravarty, Manager, IDC. Among service
providers, Satyam enjoys the largest mind share among those considering
implementing VoIP in the near future, while a third of them are yet to decide on
a particular company.

Though Indian companies are showing a high degree of similarity with advanced
countries like the US as far as adopting a technology is concerned, there seems
to be one aspect where the difference comes. While two third of the larger
corporates in the US are not interested in outsourcing VoIP services, more than
90% of their Indian counterparts are ready to go in for outsourcing. Apparently
users have become more cautious on the cost effectiveness of any new adoption
and this could be one of the reasons for outsourcing. "The difference is
predominantly an after affect of the slowdown, which led companies to outsource
most of their operations and manage their bottom line. This study also reveals
the change in the Indian psyche which had been largely traditional," says
Parijat.

According to the report, the overall market is huge and there is an early
mover advantage here. Those that are not considering VoIP as yet, which
constitutes 55% of those surveyed, state ‘costs of implementation’ as their
strongest barrier. IDC estimates the market size for the year 2002-03 in India,
to be as large as Rs 684 crore. The opportunity is thrown open to both solution
providers like Cisco, Vocaltech, and Multitech and ISPs like Satyam and
Net4India. Satyam already occupies a 40% mind share among those considering
implementing VoIP, while the other ISP players occupy 7% each.

So given the conditions we will soon be subjected to another battle among the
players in this front. If mindsets prevail then maybe the revolution will take
longer to succeed. But as of now the bird seems poised for flight!

Radhika Bhuyan In New Delhi

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