Although majority of the countries in Africa has a broadband penetration of below 10% in 2010, the access to wireline and wireless technologies are improving driven by fibre-optic cables and 3G+ mobile technologies The mature standards of WiFi and WiMAX technologies, these technologies have become the emerging technologies for local and wide area network coverage in emerging African countries
For those services reaching maturity and decline stage such as Mobile voice and fixed voice services, rejuvenates the offering by adding new features (such as VAS) and targeting new customer groups. For example integrating mobility and mobile media such as SMS with fixed VoIP and unify various messaging applications voicemail, IM, Email and fax The deployment of Blackberry server (improve mobility) and One Number (enhancing voicemail) Operators offer managed fixed VoIP solutions with ADSL and FTTB Enterprises use IP Centrex and one number services Enterprises to adopt unified communications The proliferation of mobile devices and tablet devices Expected growth of mobile applications FMC Mobile VPN Mobilce Centrex LTE is expected to emerge in the South African market in 2013 and would be a key platform to support advanced services such as face to face communications (Video conferencing) Market acceptance for FMC is expected to mature in this period This period is likely to experience the growth of VoIP services (Video call) Due to the growing demand for VPN services in the Kenyan and Nigerian enterprise markets, service providers need to offer VPN services as part of an integrated internet access solution Service providers need to ensure that enterprises have fast and reliable internet access on which the VPN services can be delivered Service providers should offer VPN services as part of a wider managed internet security solution Frost & Sullivan expects VPN services over fibre to emerge and complement the dominant VPN over satellite -- offer managed VPN services to enterprises in both countries
If you look at services like cloud computing and social media in the work place or even some aspects on Unified Communications such as IM, they were all introduced to the workplace after individual employees had grown accustomed to the services outside of the workplace . Work efficiency: mobility and Telecollaboration Outsourced Contact Centre Services Drive the UC Demand South Africa is seen as a key outsourcing destination in Africa and the world. This is attributed to the country’s highly commended English language skills and good work ethics of its people and its efficient service industry. The contact centre business, being one of the labour-intensive and service-oriented businesses, has been the major outsourcing revenue generator in the past. Many vendors focus on providing UC solutions for contact centre operations. The immediate benefits brought by UC applications will improve several performance indicators like customer response rate. The impact of this driver is expected to increase from low to high over the forecast period. Usage of Low-cost and High-quality Fibre Optic Cables Enhance the UC Service Quality Several undersea cables have been linking and will link South Africa to the rest of the world, this will greatly increase the international bandwidth capacity. Increased network performance is conducive to support better quality of UC services, which will effectively help organisations to improve operational efficiency, reduce costs and enhance employee productivity. As the roll-out of fibre optic cables takes time to reach the customer premises, noticeable benefits of increased efficiency will only be reflected in 3-5 years. The impact of this driver is expected to remain high in the short and medium terms and decrease to low in the long term of the forecast period. Wireless Technologies Improve UC Mobility (Efficiency) Booming wireless communications have changed the whole situation of the lack of means to access telecommunications services in Africa. South Africa is the leader in voice and Internet connectivity in terms of penetration in the continent. Advanced wireless technologies like Worldwide Interoperability for Microwave Access (WiMAX) and long term evolution (LTE) will drive the demand for UC services, as these technologies support faster, broader-band Internet services. Sales personnel demand high flexibility in UC solutions, as it will allow them to work remotely and seamlessly connect to their offices. The impact of this driver will decrease from high in the short term to medium in the medium and long terms. Tele-collaboration Improves Operational Efficiency As the new and extended UC concept, tele-collaboration has been gradually accepted by large corporate customers, most of which are multinational corporations that require advanced collaboration capabilities. Vendors are enhancing their UC solutions through supporting functions like file sharing and Web portals; this improves clients’ operational efficiency, as the traditional email system cannot support large-size file transfer and portal collaboration. Currently, the adoption of tele-collaboration remains low; however, the impact of this driver is expected to increase from low to medium over the forecast period. Software-centric UC Solutions Reduce CAPEX and OPEX Traditional IP telephony, which is a hardware-intensive telephone and switch system, has gradually evolved into a software-driven UC application. This eliminates the need for UC vendors and system integrators to invest in equipment manufacturing and procurement as well as spend for equipment maintenance and replacement. This software-centric model becomes an effective tool to reduce the capital expenditure (CAPEX) and operational expenditure (OPEX) of suppliers and end users. The impact of this driver is expected to decrease from high to low over the forecast period. Restraints Low Awareness of UC Benefits Most organisations have not yet fully realized UC as a strategic tool to improve their operational efficiency in the long term. They simply focus on the short-term costs of deploying a UC system without a concrete measure of the long-term benefits of operational cost savings. Some business customers even perceive instant messaging (IM) or presence function as a distraction and security threat to their daily operation. As more customers deploy UC system with which their customers interact with, more of them will start to be aware of the UC benefits and integrate UC into their business process. The impact of this driver is expected to be high in the short term and will decrease to medium during the remaining forecast period. Lack of Proven Business Cases to Justify Full-UC Adoption UC is still new to the South African market, as a majority of business customers stick to the traditional UC concept including VoIP and unified messaging features. UC does not provide attractive value proposition to all business functions to justify mainstream adoption to streamline their business processes. An increasing number of companies are deploying a full suite of UC system that includes voice over Internet protocol (VoIP), unified messaging, conferencing and collaboration features. The impact of this driver is expected to decrease from high to medium over the forecast period. Legacy Customer Premise Equipment Most small businesses, governments and educational institutions in South Africa are still using the legacy TDM and PBX telephone system. Legacy infrastructure on customers’ premises prevent businesses from deploying and integrating advanced and cost-effective UC applications. This is due to the fact that these organizations will not benefit from improved voice and data communications, as their business are small in scale. However, this situation is expected to change, especially in educational institutions where distance learning is becoming an effective tool to extend their reach to people in remote areas. The impact of this driver is expected to decline from high to low over the forecast period. Interoperability of Different Applications and Systems Although vendors have been seeking industry standards to align their hardware and software, system integration remains an issue when products of different vendors are connected on site. This often leads to the demand for UC specialists to monitor and solve technical issues continuously, as many organisations are still using the traditional TDM voice system in the silo of a business process, which restricts the interoperability with IP-based network equipment and applications. The inconsistent standards of UC products are expected to change, as vendors are willing to form partnerships with each other to bundle their competitive strengths. The impact of this driver is expected to decrease from high to low over the forecast period.
With improving quality of fixed and mobile broadband services in South Africa and other African emerging markets such as Kenya, medium-sized enterprises (measured by the number of employees between 51 and 250) are expected to drive the growth of UC&C systems containing VoIP, unified messaging, conferencing and collaboration applications, in the next 5 to 7 years. The financial services industry is expected to be a key vertical of earlier adopters.
Enterprises in different verticals are migrating to VoIP for inter-branch voice telephony Service providers also create entry and exit points for VoIP to the public switched telephone network Enterprises in all verticals use bulk SMS services Enterprises use third party bulk SMS providers for this service Enterprises use bulk SMS for various purposes Government departments use this service for telemedicine applications such as the anti-retroviral program In the financial sector bulk SMS is used for sending transaction notifications or security information such as one-time-passwords to account holders Enterprises in the retail and financial sectors use bulk SMS for customer care and notification services Frost and Sullivan predicts that enterprises will integrate bulk SMS in unified communications platforms Premium rated SMS services are not widely used by enterprises This service is mainly used by financial enterprises However, enterprises are interested in USSD for customer support
In South Africa, the growth of VoIP penetration is closely related to the growth of broadband penetration rate The majority of South Africans were first exposed to Voice over Internet Protocol or VoIP services through the introduction of Skype. This free service made its presence felt in 2005 and soon there were many individuals and companies alike that were eager to try the service. A major driver for this growth in demand was the perception that making calls was free. This perception was not incorrect, but it did not take into account the fact that one has to pay for the bandwidth used while making the call. The application utilised a large amount of bandwidth and given the relatively high cost of internet connectivity in South Africa, this took many by surprise. In addition to this, it was clear that reliable broadband connections were best suited if callers wanted to achieve their required level of quality. A major driver for the use of VoIP is cost optimisation, but it seems as if the market has moved past this now. The VoIP market’s next wave of technology is to come from the mobile channel with the introduction of mobile VoIP. Increased workforce mobility is a key demand driver for this service and the operator that brings it to the market in the shortest span of time is expected to make significant gains in terms of the corporate market. ECN Telecoms and VOX telecom are likely to be primary providers of this and related services. Significant improvements to voice quality position VoIP as viable alternative to traditional voice services VoIP represents a first step towards broader IP telephony utilisation, a growing market segment Multinationals using South Africa as a staging area for expansion into the rest of Africa, drive demand for VoIP services The tourism and healthcare sectors have demonstrated significant take up of VoIP due to the cost saving on both call and CPE expenses. As leading industry verticals on uptake of VoIP, the nature of the government and financial organisations is such that they most often have a multi-branch network. VoIP services are utilised for inter-branch communications and for calls outside these networks when service providers are able to ensure the required levels of quality. The other segment represented above consists of verticals such as mining and manufacturing, agriculture and FMCG. These verticals have seen the proof of VoIP’s capabilities and are likely to show greater uptake of these services during the forecast period.
VoIP: Cisco, Avaya, Alcatel-Lucent, Huawei, Aspect Largest in the world IP telephony vendor market: Avaya, Cisco, Shoretel, AT&T and Verizon Initially, there were significant restrictions on the provision of VoIP services. , with only Telkom, the SNO (Neotel) and under-serviced area licensees (USALs) were granted the ability to do so. This situation has since changed with an amendment to the Electronic Communications Act, which effectively liberalised the VoIP market. The law meant that from February 1, 2005, all value-added network services (VANS) license holders were permitted to provide VoIP services. As a result, VoIP services proliferated in the market and there has been steady growth since then. In 2009, more than 500 companies that have the ability to self provision their own infrastructure. The prospect of having so many companies with this ability was alarming at first, until it became clear that it is highly unlikely that most of these companies will follow this route. It is simply too expensive and the ROI period will be too lengthy for most of the market participants. Despite the financial challenges associated with infrastructure deployment, there are indeed expectations that at least a few additional ISPs will move forward with this option.
IP and Mobile Centrex The demand for VoIP is high in the Kenyan and Nigerian enterprise markets This is driven by the cost effective nature of VoIP when compared to regular voice services Communication services providers need to offer VoIP in order to meet the telephony needs of enterprise users In order to be attractive to enterprise users, service prviders need to establish cost effective VoIP termination providers for off network calls The emerging trend is providing free VoIP services for calls confined to the providers IP network Service providers need to provide internet/data services and VoIP as a converged service to guarantee a sound service offering The low penetration level of fixed lines restricted the growth of PABX services The penetration of fast internet access in the Kenyan and Nigerian enterprise markets is creating demand for IP PABX systems that support VoIP IP PABX that use open Session Initiation Protocol (SIP) standards are proffered due to cross vendor interoperability VoIP providers need to offer IP PABX services as a managed telephony service The services should be customised to the different needs of large enterprises and SMEs - offer managed IP PABX services as part of integrated VoIP solutions
Vendor market: UM: Microsoft, IBM, Cisco, Google, NEC, Nashua Communication, Avaya, Mitel Networks, Interactive Intelligence, Mobile OS: RIM, Android, Windows Phone 7, Apple, Nokia UC&C: Cisco, Avaya, Pansolutions, Alcatel-Lucent, Astra Technologies, NEC, Mitel Networks, HP Moving to mobile VoIP, UM, and UC&C, and cloud computing System integrator and telecom wholesaler market: Dimension Data, BCX, ATIO, GijimaAST, EOH, Internet Solutions, Vox telecom, ECN Telecoms, Skycall, Switch One-stop shop vs Multiple vendor products integrated to the unified platform Interoperability of different vendor products remain an issue UM and UC&C for external communication: security is a concern
3450 enterprise subscribers of UC&C solutions in 2010 in South Africa
Large enterprises in the financial, mining and utilities industries often have large IT departments and data centres operated internally, but the outsourcing of ICT maintenance and/or infrastructure is taking off in emerging Africa although slowly This is driven by the cost reduction and consolidation of data centres nationwide. Cloud computing is an emerging area to see strong growth in the next 3 years Managed and Hosted UC Solutions New service delivery methods, such as managed and hosted UC solutions, provide system integrators and vendors a significant growth opportunity. These new service areas are in line with many organisations’ strategic shift from the reduction of capital expenditure (CAPEX) to operational expenditure (OPEX). As the bandwidth cost is expected to decline, hosted UC solutions are preferred by SMEs. Managed services are also likely to continue to remain a competitive advantage for system integrators and service providers, as organisations seek to outsource the management of the increasingly complex UC architectures.
Private cloud for enterprise customers; while public cloud for consumers such as Google
With mobility as one of the drivers of unified communications, the strong growth of SMS is expected to drive the growth of VoIP and UM via mobile devices By leveraging the current VAS applications EmailtoIM, SMStoEmail, VoiceSMS, FaxtoEmail, mobile VoIP and UM becomes the cost-effective enterprise grade VAS Mobile Enterprise VAS: Vodacom, MTN, Safaricom, Orange, Emtel, Airtel are major providers Fixed-line and fixed-wireless operators are expected to grow strongly in the FMC VAS: Call management VAS (Call blocking, ...) Multimedia (Messaging, conferencing and collaboration) Bulk SMS, premium SMS Application based VAS (mobile commerce, FMC VAS (mobile VPN, tracking, monitoring, machine-to-machine applications, self service portals, One Number, CUG, Shared Bundles) Trends Multimedia VAS SMS-based services represent the major form of VAS offerings from network operators. With fast advancement of mobile technologies, premium content VAS such as music and ringtone downloads are expected to grow strongly in the next three to five years. However, innovative multimedia VAS tend to combine several delivery mediums; for example, SMStoIM, whereby SMS is connected to the real-time communication tool of instant messaging. Other examples include SMStoWeb, SMStoEmail, and vice versa, which links SMS with Web and e-mail. By incorporating local content, mobile money/banking, ringback tones, USSD-based information and entertainment services are expected to continue to grow in SSA. Enterprise VAS and Other Innovative VAS With the declining trend of consumer ARPU, enterprises are becoming an important source of revenue for network operators in SSA. Fleet management applications and mobile VPN are expected to grow because of their value to enhance the operating efficiency of enterprises. Rate analyzers and CUG are expected to drive ARPU growth in the next five to seven years (2015–2017), as they help enterprises better understand their spending patterns so as to deploy cost-effective communication solutions. Other innovative VAS targeting consumers include mobile payment services and local content as well as security- and emergency-related services such as tracking of mobile phones and Netcare 911, all of which are expected to grow in SSA depending on the realization of economies of scale.
VAS is primarily a practice to enhance customer loyalty and, in some cases, to attract new customers depending on the level of competitive environment and mobile penetration rate. Person-to-person and person-to-machine applications, such as mobile payment and commerce, bridge the gap between the consumer and enterprise service market in SSA. Machine-to-machine services targeting enterprises such as tracking, monitoring, and other telemetry services driving VAS revenues. Self-service portals improve the efficiency of customer support services through user-friendly online account management, targeting both consumers and enterprises. With the continual network upgrade in high-growth markets such as South Africa, Kenya, and Nigeria, opportunities exist by offering consumers VAS such as mobile TV and video calls based on 3G along with more advanced technologies and devices. Opportunities exist by offering enterprise VAS, such as consulting and maintenance services relating to FMC services, as network convergence in SSA is expected to be the driving force for enterprises to deploy cost-effective solutions. The revenue growth impact and probability of success of offering mobile advertising/marketing, mobile TV, and CUG services are relatively low, as they require partnerships and advanced devices and are short-term-oriented services. By offering social networking and mobile phone tracking applications, as well as rate analyzers, network operators can realize quick revenue generation due to their effectiveness and practicality to enhance quality of communications and reduce costs. With the emerging cloud-based technologies, SMEs are expected to deploy cost-effective communications solutions through hosted or managed solutions by outsourcing infrastructure and maintenance services. Enterprises do not make use of CUG services This is in spite of CUG services being available on South African operator networks This failure of uptake of the service is partly due to mobile operators failing to offer it to enterprise users Limited marketing initiatives for the service may also be a key cause Enterprises in different verticals are interested in CUG service to lower mobile telephony costs The enterprises expect a discounted tariff rate with CUG services Frost and Sullivan consider CUG to be to be useful for enterprise sales personnel in all verticals Frost and Sullivan has established that in future enterprises will adopt unified communications and convergence This will enable employees to communicate by different means including fixed and mobile voice, email and instant messaging Frost and Sullivan predicts that the growth of managed VoIP services is likely to result in a significant uptake of one number services MTN and Vodacom already have Next Generation Platforms offering one number services to VoIP subscribers
The emerging trend involves the integration of pico cells (known to customers as cellular routers) with the fixed VoIP platforms Mobile and managed VoIP service providers are integrating cellular systems with their VoIP platforms Smart Phones (Blackberry and Apple iPhones) are becoming part of the value-added service offerings for major operators in Africa such as Airtel and MTN. Smart Phones are driving the growth of data services for corporate and individual consumers. Considering the network coverage issue on-premise of enterprises, a dedicated cellular router (eg Femtocell) improves the quality of enterprise communications while workers are travelling within and between office buildings with their Smart Phones. Mobile and managed VoIP service providers are integrating cellular systems with their VoIP platforms Service providers offer free VoIP services for calls made between enterprise branches This is offered as part of bundled managed services which include broadband services This is achieved by installing pico cells at the enterprise premises Operators are primarily using pico cells to improve the quality of voice telephony services The deployment of femto cells has been limited 3G (HSPA) femto cells present an opportunity for operators to offer high quality data services as well The use of femto cells faces the challenge of a limited number of concurrent voice and data calls This ranges between four and eight In addition, the bandwidth required for the backhaul link to the operator’s network places a limitation on the data capacity of the femto cell Hence, the emerging trend involves the integration of pico cells (known to customers as cellular routers) with the fixed VoIP platforms Currently operators offering fixed mobile services to enterprises do not apply discounted pricing for mobile telephony traffic that is routed via the enterprise IP network The use of discounted pricing is likely to influence growth in the use of femto cells for fixed mobile convergence Leading South African operators have deployed Next Generation Network (NGN) platforms in their core networks The platforms are used for switching VoIP calls for cellular and fixed platforms Currently cellular traffic breaks out at gateways that convert it from VoIP to packetised GSM voice The operators provide fixed VoIP to enterprises using ADSL and fibre connections to IP PABX systems The current competitors in the fixed mobile convergence market are mainly mobile operators These operators are using FMC to gain a footprint in the enterprise fixed services market Often these operators have an existing contract to provide enterprise mobile telephony services to the company being connected The operators also target enterprises where a significant number of employees are existing subscribers of their services MTN and Vodacom are the leading providers of mobile services to enterprise users Frost & Sullivan expects these companies to emerge as market leaders in the FMC This is attributed to their large installed base for mobile enterprise services which can be migrated to FMC services Cell C and Telkom Enterprise are expected to emerge as key competitors in the short to medium term Many mobile operators do not offer Femtocell until the finalisation of local loop unbundling.
Broad interoperability drives large-scale service uptake The broad interoperability of different vendor products and the interoperability between EIM and public IM is expected to be the key competitive strength of EIM applications in the future. Although leading vendors’ EIM applications have evolved to incorporate VoIP, conferencing and collaborative functions as if they were a UM or UC&C solution, EIM application alone or as a part of a solution is expected to see increasing adoption in the medium-sized enterprises in South Africa. This is based on the vendors’ innovative solutions to integrating EIM with their existing enterprise applications. However, a standard protocol is essential for broad interoperability, as it is the foundation for any IM application. Next-generation network reduces bandwidth costs With the migration to next-generation IP-based network infrastructure, enterprises are expected to increase the use of cost-effective communication solutions such as UC&C. The primary driver for adopting UC&C solutions besides the low cost of deployment is the declining cost of usage compared to the cost of broadband bandwidth. Advanced technologies, such as fibre -optic cables and WiMAX, improve network capacity and increase the efficiency of bandwidth to serve more users simultaneously over a larger geographical area. As EIM vendors are striving to become the first-movers to adopt advanced technologies, the development of relevant EIM applications is expected to match the advancement of network upgrades. Budget constraints of SMEs are key criteria for basing value propositions The limited spending on deploying new applications and IT systems is the primary restraint for SMEs to deploy EIM as there are many free public IM systems available on the Internet. Budget constraints of enterprises can be outweighed by offering a high return on investments. For example, hosted services including EIM as part of a bundled offering, are a cost-effective means to enhance the performance of enterprise IT systems. EIM integration with enterprise applications drives service uptake With many enterprise applications already in place, EIM applications may interrupt the functioning of other applications due to their compatibility, configuration or other technical issues, which may involve additional costs for the integration of EIM. However, the decision-making process is usually subject to the offerings of the same vendor who is the enterprise’s existing supplier of applications. With the growing trend of reducing system integration risk, enterprises are more willing to deploy a diversified portfolio of vendor products to shift the risk from relying on one particular vendor’s products to products of multiple vendors. Software-centric business models are the core of IT architecture Software usually represents 70.0 per cent of the spending on enterprise IT systems. It is expected to drive the growth of EIM applications. EIM is expected to be recognised by enterprises as an efficiency-enhancing tool if used together with other enterprise applications such as project management tools, document sharing/management applications, calendars, and desktop productivity applications. EIM is particularly useful when it is used as a tool to improve the coordination between different departments, which are linked in a process, to manage a certain operational aspect of an enterprise. End users are appreciating the soft returns of EIM The strictly regulated financial services and telecommunications industries remain the major sources of demand for EIM. This is because most public IM systems have limited archiving and security capabilities, which are insufficient to fulfill their auditing requirements. Enterprises across all industries are starting to realise the benefits of EIM through enhanced customer relations and improved operating efficiency. However, end-user education and channel partner trainings are essential to enhance brand awareness and EIM benefits.
Will voip & unified messaging become value added services to enterprise communications in the future
Will VoIP and Unified Messaging Become Value-Added Services to Enterprise Communications in the Future? By Jiaqi Sun, ICT Research Analyst, Frost & Sullivan
Agenda Introduction Markets Overview of VoIP, UM and UC&C Service Delivery Models UC&C Market Forecasts Enterprise VAS and Investment Opportunities Conclusions Q & A 2 4 3 5 6 1 7
These services have become commoditised and in cases where uptake is minimal, there is a very limited likelihood for significant growth except for mobile access to VPN These services are increasingly becoming available and current and future end user adoption is expected to grow Most of these services have been launched recently therefore operators are still trying to generate acceptance in the market Others have failed to generate interest in the market Mature voice services drive VoIP, UM and Enterprise Mobility as Value-Added Services (VAS) Introduction Fixed and Mobile Voice Services are Mature in 2011 Bubble size represents level of end user adoption Source: Frost & Sullivan analysis Adoption Rate Low High Introduction Growth Maturity Decline Shared Bundles Mobile Access to VPN One Number and One Bill Fixed Voice bundles and standard plans Pico cells Converged Devices Mobile Centre FEMTOs Mobile voice services and standard plans Mobile APN Closed User Groups SaaS BES Block Number Portability Self Service Portals Bulk SMS Premium SMS Billing Hierarchies Tariff Analyzers FM Bundles FMC Single Wallet Fixed data plans Mobile data plans
Introduction Consumer VoIP and IM Have Evolved into Enterprise Grade UM and UC&C VoIP+IM UM UC&C Source: Frost & Sullivan analysis <ul><li>Driven by cost reductions and the streamline of ICT systems, social media and fragmented legacy enterprise systems are migrating to one single unified system </li></ul><ul><li>VoIP and UM are two primary components of UC&C solutions represent 85% of revenues of integrated UC&C solutions </li></ul><ul><li>Conferencing and collaboration are future growth drivers </li></ul><ul><li>Integration of ICT Systems with Those of Customers and Suppliers is One Critical Means for Change in the Future </li></ul>
Introduction Improving Network Capacity is Key Driver and Limited Interoperability is Primary Restraint Software-centric communications solutions Reducing bandwidth costs and improving network capacity Improvement of Work Efficiency CAPEX and OPEX Reductions Source: Frost & Sullivan analysis Lack of proven case studies Limited interoperability of different systems and applications Low awareness of unified benefits Legacy customer premise equipments Drivers Restraints Outsourced Contact Centres Budget Constraints of SMEs
Introduction South Africa, Nigeria and Egypt are Key-Growth Market s of UC&C Solutions in Africa BPO and contact centres are driving the uptake of VoIP and UM solutions Regulatory restrictions in Africa on e.g. VoIP were the primary causes for slow adoption of UC&C solutions Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan analysis Low High High GDP Per Capita (Current $) Vendor Market Revenue CAGR During 2008-2010 (%) Nigeria Kenya South Africa Low 0.25 0.0 0.5 3,500.0 7,000.0 Africa Average Tanzania Vendor Market Revenues Mauritius Egypt Senegal $46.1 million $75.0 million $14.0 million $187.5 million $32.2 million $21.3 million $9.2 million $30.0 million
Markets Overview of VoIP, UM, and UC&C VoIP and UM are Expected to Maintain Double Digits Growth in South Africa in the Next 5 Years VoIP CAGR 21% UM CAGR 30% UC&C CAGR 32% <ul><li>100,000 </li></ul><ul><li>VoIP Users </li></ul><ul><li>81,500 </li></ul><ul><li>UM Licenses </li></ul><ul><li>3,450 </li></ul><ul><li>UC&C S ubscribers </li></ul>2015 Market Volume Low High Introduction Growth Maturity Decline E - mail VoIP Fax Collaboration Voice Mail 2010 2020 2005 IM Video Conferencing Tele-presence Fully Integrated UC&C Solutions Year Source: Frost & Sullivan analysis Note: Bubble size represents revenues accruing to vendors. Solutions are not mutually exclusive UM
Markets Overview of VoIP, UM, and UC&C VoIP Product Evolution Process Current services Anticipated services Source: Frost & Sullivan analysis Trend VAS in addition to VoIP include for example bundling hosted services with voice management services 2010 2012 LCR Voice Services Converged Voice and Data Services VAS Bundled Services Number Portability Carrier Pre-select Local Loop Unbundling
Markets Overview of VoIP, UM, and UC&C Key VoIP Market Participants in South Africa in 2011
Markets Overview of VoIP, UM, and UC&C IM Becomes Central Software and Computing Devices Become Central Hardware of UC&C 1996 1999 2002 2003 2005 2009-2015 2010-2020 Source: Frost & Sullivan analysis <ul><li>IP Telephony vendors are leading UC&C technology vendors Cisco, Avaya and Alcatel-Lucent </li></ul><ul><li>Microsoft and IBM are primary vendors in the enterprise IM solutions </li></ul><ul><li>Polycom, Google and HP are expected to grow their presence in the future </li></ul>Consumer IM Enterprise IM IM with VoIP IM with VoIP and Video UM UC UC&C
Markets Overview of VoIP, UM, and UC&C Key UM and UC&C Market Participants in South Africa in 2011 UC&C Software Vendors System Integrators Distributors and Resellers Hardware Vendors Network Operators Source: Frost & Sullivan analysis
Note: Others include Datacentrix Holdings Ltd., Spescom, UCS Group and Altech Technology Concepts Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan analysis Note: others include Microsoft, Mitel Network Corporation, IBM and NEC Corporation Note: All figures are rounded; the base year is 2010. Source: Frost & Sullivan analysis Technology Vendor Market Shares System Integrator Market Shares Markets Overview of VoIP, UM, and UC&C Cisco and Dimension Data Leading UC&C Market Participants in South Africa in 2010
UC&C Market Forecasts UC&C System Integrator Market Revenues Forecasts in South Africa Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan analysis Note: Other revenues include tele-presence and tele-collaboration features Growth Rates of UC&C Components 20%-40% 2011-2016 $500 million $120 million <ul><li>VoIP is expected to remain the high growth rate (35%-40%) </li></ul><ul><li>Conferencing is expected to show strong growth rate from 2013 </li></ul>
UC&C Market Forecasts VoIP and Corporate Customers Remain Primary Revenues of UC&C Market in South Africa Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan analysis 2009 2016 2009 2016 Note: Others include tele-presence and tele-collaboration
UC&C Market Forecasts The Public Sector is Expected to Maintain a High Growth Rate of About 30% in the Next 5 Years Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan analysis Note: Other sectors’ revenues include revenues from the hospitality, healthcare, manufacturing and mining sector
UC&C Market Forecasts Telecommunications and the Public Sectors are Primary Revenues of South African UC&C Market 2009 2016 Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan analysis <ul><li>The public sector is the leading segment in the VoIP market. Retail and tourism sectors have seen strong growth between 2008 and 2010 </li></ul><ul><li>Financial services sector is the leading segment in the UM market. Outsourced contact centres and business services are expected to drive UM uptake in the future </li></ul>
Service Delivery Models Managed and Hosted Services Delivery Models are Prominent in the SMEs Segment Customer Premise Equipment Outsourcing Services SaaS On-premise Off-premise Management Service Delivery Method Hybrid External Internal Hybrid Note: * Referring to public cloud via the Internet Cloud* Computing Managed Services Hosted Services Managed Customer Premise Equipment Source: Canalys and Frost & Sullivan
Service Delivery Models Cloud-based Solutions are Gaining Momentum in the Large Enterprises Segment Note: SaaS - Software as a Service; IaaS - Infrastructure as a Service; PaaS - Platform as a Service Source: Frost & Sullivan analysis. Service bundles of SaaS and IaaS i.e. PaaS become one of the competitive strategies in cloud computing market in Africa Laptop Public and Private Cloud Networks
Voice + SMS Voice + Messaging + Internet Voice + Multimedia + Applications Traditional Mobile Communications Basic Mobile Communications Advanced Mobile Communications Source: Frost & Sullivan analysis Enterprise VAS and Opportunities VAS are Value-Enhancing Alternative Channels to Increase Customer Loyalty VAS Delivery Mediums Examples SMS/MMS Premium-rated SMS, SMS/MMS subscriptions USSD Airtime transfer, mobile money transfer IVR Information services by dialing short-codes Web Images, music, game and video downloading Combinations of above mediums WebtoSMS, SMStoEmail, Voice SMS
Enterprise VAS and Opportunities VoIP and UM Bundles will Become Enterprise VAS Driven by Software-Centric Systems Note: Other enterprise VAS are mainly application-based services including mobile advertising and marketing, premium-rated SMS, FMC/telemetry services, shared bundles , and customer support services. Other consumer VAS include, among others, CUG, maps, email, and social networking applications. Source: Frost & Sullivan analysis VoIP+ UM <ul><li>Mobility is one of the key drivers of unified communications </li></ul><ul><li>By leveraging current VAS applications e.g. EmailtoIM, SMStoEmail, VoiceSMS, FaxtoEmail, mobile VoIP and UM will become the cost-effective enterprise-grade VAS </li></ul>
Enterprise VAS and Opportunities VoIP and UM Bundles are Expected to Become New Sources of VAS Revenues Source: Frost & Sullivan analysis Mobile payment/ commerce Mobile advertising/ marketing Telemetry services Video calls Mobile TV Rate Analyzers Bulk SMS Tracking of mobile phones Self-service portals VoIP and UM bundles CUG Probability of Success Low High Low High Impact on Revenue Growth If Successful
Challenges <ul><li>Strategic operators in Africa such as MTN and Airtel seek new sources of revenues </li></ul><ul><li>Poor network coverage on premises is a barrier for adopting mobile services by enterprises </li></ul><ul><li>With extensive adoption of Smart Phones, enterprise communications become more flexible </li></ul><ul><li>Smart Phones (Blackberry and iPhones) are driving the growth of data services for corporate and individual consumers </li></ul><ul><li>Mobile VoIP </li></ul><ul><li>Mobile UM (SMStoIM, SMStoEmail) </li></ul><ul><li>Dedicated cellular routers (Femtocell/Picocell/Distributed Antenna System) improves the quality of enterprise communications </li></ul><ul><li>Closed User Group (CUG) </li></ul><ul><li>Enterprise mobility solutions: workers are travelling within and between office buildings and branches carrying their Smart Phones </li></ul><ul><li>Fixed Mobile Converged Services </li></ul><ul><li>Mobile UC&C </li></ul>Dedicated Cellular Routers Smart Phones & Dedicated Cellular Routers Smart Phones <ul><ul><ul><li>Short Term Medium Term Long Term </li></ul></ul></ul>Revenue Drivers Source: Frost & Sullivan analysis Devices Enterprise VAS and Opportunities Smart Phones are Central Devices of Mobile Unified Systems Improving Enterprise Mobility
Conclusions Source: Frost & Sullivan analysis Conclusions Broad interoperability drives large-scale service uptake Next-generation networks reduce bandwidth costs Budget constraints of SMEs are key criteria for basing value propositions End-users are appreciating the soft returns of unified communications Software-centric business models are the core of IT architecture Managed and hosted services delivery models are cost effective A value-added unified communications solution should be simple to implement, easy for customers to exploit and interoperable across networks and devices
For Additional Information Christie Cronje Marketing & Corporate Communications Manager (+27) 21 680 3566 [email_address] Kate Howarth Sales Director (+27) 27 680 3212 [email_address] Birgitta Cederstrom Business Unit Leader Information & Communications Technologies (+27) 21 680 3263 [email_address] Merwin Grootboom Account Manager (+27) 21 680 3294 [email_address]