Gokul Blog — A conversation on VoIP, IMS, Cisco and Just about Anything

Deeper analysis of VoIP

The Asian Phenomenon

Posted by tggokul on November 13, 2006

I had a chance to read a couple of reports on the adoption of IP Telephony around the world and though there were some key differences in some of their findings, there was one finding they unanimously agreed upon which is that the U.S. has been the slowest region to adopt IPT whereas Asia pacific region was the fastest and was set to grow even faster which is not something that entirely surprised me.

VAS ( value added services) for the mobile industry were deployed in Asia way before it was deployed in US. One of the first FMC ( Fixed Mobile Convergence) implementation was in Hong Kong. So this has been more the norm than an exception.  Even though these technologies evolved in the West ( especially Europe) they are adopted much easily by the Asian countries.

What could be the reasons for this phenomemon?

  • ROI for Service Provider : The service provider ( who controls millions of subscribers) demands for a revenue sharing model. So he is not required to invest in any new infrastructure. The equipment vendor puts in his stuff, the software guy puts in his stuff and the service provider just opens up his subscriber base.  In this model everybody equally share the losses ( ofcourse the Service provider has nothing to lose) or make good profits (which has  historically been the case).
  • Cheaper Equipment – Reverse Engineering techniques ( thanks to Chinese companies) have made the cost of equipment much cheaper for the telecom provider even if he wants to buy the equipment instead of the Revenue sharing model.
  • Huge customer base – The telecom provider has millions of subscribers and even if the subscription rate for the services is small, the profits would be booked due to heavy volume.
  • Dynamic Market – The subscribers are always looking for the next best application ( It helps that Asia has the largest population between the ages of 18-25). The ‘Wow’ factor (makes your friends go “Wow”) helps in the success of these applications.

All of the factors  mentioned above are valid for VAS applications. For IPT implementation the second one plays the most important role. One of the reports had a graph representing the major players in the IPT domain in Europe/North America/Asia.  Major players like Avaya/Cisco had nearly 95% of the European/American markets whereas in the Asian market they had close to 60% and the rest 40% were the local players whose solutions were much cheaper than Avaya or Cisco.  Cisco prides itself on its IP phones and they will make sure they have a huge market share in that segment.  We possibly could see some acquistions in this segment.

Needless to say it is exciting times here for vendors/system integrators in the IPT domain.  Go guys, make your millions 🙂

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