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Enterprises to cut fixed-line in favour of mobile

Giving staff mobiles will be cheaper than installing VoIP.

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The economic downturn means that businesses will spend less on fixed-line voice budgets, as enterprises look to mobile phones as a cheaper communications alternative, according to telecoms analyst group Analysys Mason.

The report entitled Fixed-mobile convergence in enterprise voice in Europe: forecasts 2008-2013, predicts that while business budgets will be squeezed thanks to the financial crisis, the real threat to fixed enterprise voice spend in Western Europe during 2009 will come from mobile substitution.

Analysys Mason predicted that in Western Europe, enterprise mobile voice spend is expected to grow at a CAGR (compound annual growth rates) of 1 percent per annum, while enterprise fixed voice spend is expected to decline at a CAGR of minus 15 percent per annum.

The prediction will make uncomfortable reading for the likes of BT and other fixed-line telecom carriers, already struggling with declining voice revenues.

"For enterprises, mobile operators have cut their prices dramatically," said the report's author and Analysys Mason associate Margaret Hopkins. "Indeed, they have priced things like Wi-Fi voice out of the market. For large businesses, they have cut wholesale prices significantly."

And it seems as though mobile has become so cheap, that companies are more likely to opt for it instead of installing IP phones and VoIP systems.

"Enterprises are finding it cheaper to give staff mobile phones for all their calls than to put a new VoIP phone on a desk," said Hopkins. "In addition to this, the financial crisis will increase pressure to conserve cash and make it even less likely that enterprises will install a VoIP PBX when their old phone system ceases to be supported by the vendors."

Hopkins qualifies this statement by saying it depends on the particular business, and on what their individual circumstances are. "For many companies it is cheaper to give staff mobile phones rather than putting VoIP on the desk, but it really depends on what their existing network is, and a number of other factors. If the staff are always out and about, it (mobile substitution) makes sense," she told Techworld. "But if everyone is desk-based, then no, it doesn't make sense."

Analysys estimates that putting a single VoIP phone on a desk, costs £400 ($605) per user, per year. £250 of this is annual running costs, and £150 is amortisation of equipment (ie purchase costs, cost of PBX etc).

"The focus on cash is really going to hit VoIP deployments, because with these deployments you are typically spending lot of money up front," Hopkins added. "That said, hosted VoIP on per user, per month, basis may do well, providing the price is right." Companies such as BT, Affinity, and other service providers already offer hosted VoIP services.


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Bill said: hmmm Nice theory but like swiss cheese it has many holes Mobiles dont intergrate very well into telephony systems so things like call escalation conference calling group voice boxes call recording which is almost universal in financial services IVR systems and a hundred other required functions are either not available via mobile or more difficult and expensive to deploy I would agree that the end point for a lot of calls will be a mobile handset but corporates will still deploy IP based PBXs probably with greater support for mobiles rather than a decline in sales Also casual VoIP Skype etc shows no signs of slowing down and is now heading into SMEs in a big way

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