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Unified Communications Applications & Services Market in India to exceed US$ 2.7B by 2023

The Unified Communications Applications market size is estimated to be USD 531.06 Million in 2018 clocking a healthy growth rate of 16.4%, whereas the Unified Communications Services segment holds a market size of USD 150.62 Million in 2018 boasting a CAGR of 18.2%. The Unified Communications market as a whole holds a market size of USD 1506.2 Million clocking a healthy CAGR of 12.4%.

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Definition / Scope

  • Unified Communications can be defined as "communications integrated to optimize business processes and increase user productivity"
  • Unified communications (UC) is a business and marketing approach describing the integration of enterprise communication services such as instant messaging (chat), presence information, voice (including IP telephony), mobility features (including extension mobility and single number reach), audio, web & video conferencing, fixed-mobile convergence (FMC), desktop sharing, data sharing (including web connected electronic interactive whiteboards), call control and speech recognition with non-real-time communication services such as unified messaging (integrated voicemail, e-mail, SMS and fax). UC does not necessarily specify a single product, but a set of products that enables a consistent unified user interface and user experience across multiple devices and media types.
  • In its expansive sense, the UC can encompass all forms of communications that are exchanged via a network to include other forms of communications such as Internet Protocol Television (IPTV) and digital signage Communications as they become an integrated part of the network communications deployment and may be directed as one-to-one communications or broadcast communications from one to many.
  • UC enables an individual to send a message on one medium and receive the same communication on another medium. For example, one can receive a voicemail message and choose to access it through e-mail or a cell phone. If the sender is online according to the presence information and currently accepts calls, the response can be sent immediately through text chat or a video call. Otherwise, it may be sent as a non-real-time message that can be accessed through a variety of media.

Unified Communication – Applications

Unified Communications (UC) applications as communications applications with high added values implemented by combining various communication tools or combining communication tools and task management systems. Here, the added values consist of the saving in routine tasks made possible by the above combinations and the resulting improvement in productivity.

The Unified Communications - Applications includes the following:

  1. Video provides yet another communications channel that subscribers can choose when they wish to collaborate with their peers, customers or partners. Just as some collaborations and discussions are more appropriate for voice communications than for an instant messaging (IM) session, video can offer another dimension beyond a Web conference.
  2. Telephony or IP Telephony refers to technology that transmits voice communications over a network using IP standards.
  3. Conferencing Integrating video conferencing with unified communications enables users to initiate video connections through presence, much like they do with instant messaging.
  4. Mobility enables businesses of all sizes to integrate leading – and loved – smartphones and tablets (from Android, BlackBerry OS, and Apple iOS) securely, simply and cost-effectively, with existing enterprise communication infrastructure and applications.
  5. Unified Messaging offers the opportunity for an end user to have voicemail delivered to any one of a number of destinations in electronic form. This is typically done via email delivery where a voice mail from one of any number of sources including cell phone, office phone, or even the home number. The ideal situation would be to never have to check an individual email box ever again but to be able to receive and listen to voicemail on any device, anywhere and at any time.
  6. Instant messaging or 'IM' is essentially real-time chat. With instant messaging users generally communicate back and forth 'instantly' with messages somewhere between a mobile phone text message and a full-blown email. It is faster than email (assuming the recipient is available) and much more efficient for quick questions.
  7. Presence involves locating where the intended recipients are, and if they are available in real time is a key component of unified communications.
  8. Contact Center is “the combined use of communications and collaboration solutions.” By combining these communication services such as Instant Messaging and Presence, Unified Messaging,Mobility and Telephony etc. into a single interface, teams can collaborate more efficiently and improve operational efficiency.

Unified Communication – Services

Unified Communication Services are collaboration and contact center solutions enhancing user productivity and help deliver exceptional customer experience.

Unified Communications – Services includes the following

  1. Managed Services involves the monitoring and management of Unified Communications applications on a real-time basis and also involves identifying and fixing real-time issues in the Unified Communications medium.
  2. Professional Services is the offering of IT, technology and Professional consulting with Unified Communication
  3. Hosted Services are Unified Communication services offered through a third-party or hosted service provide via mediums like cloud computing, mobility, telephony and VOIP
  4. Integration refers to the Integrations embedded within an Unified Communications applications such as Instant Messaging, Conferencing, Telephony and Mobility
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Market Overview

  • The Overall size of the Unified Communications (UC) market in India was valued at USD 1,506.2 Million in 2018 growing at a healthy CAGR of 12.4% which includes Applications and Services. The market size is expected to grow to a total of USD 2,702.2 Million in 2023.
  • Voice-based unified communication solutions have acquired major piece of the market revenues in the India UC market and video conferencing is emerging as the fastest growing UC market in India.
  • Videoconferencing has long moved from equipment to software, web-based solutions. Video-as-a-Service (VaaS) has a lot of potential and it has increasingly become popular and comes across as an extremely valuable service.
  • The telephony segment dominated the unified communication market in 2018, with around 29% revenue share and mobility segment is anticipated to exhibit fastest growth rate. This is attributed to the improved IT infrastructure and increased cloud-related expenditures.
  • The IT and telecom segment dominated the Indian unified communication market, with around 21% share in 2018, followed by BFSI segment. Furthermore, energy and utilities sector segment is estimated to grow at the highest CAGR of 15.06%, owing to widespread adoption of advanced solutions and increased IoT spending.
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Key Metrics

Metrics Value Explanation
Base Year 2018 Researched through internet


Market Risks

Minimal Data Center Security

  • The vendors that offer UC Services must have their own data-center facilities. They must secure their customers with services such as secured entry, 24/7 staffing and remote backups for disaster recovery.Not all vendors offer strictly controlled data center facilities with multiple power sources and remote backups. Some vendors choose to cut-costs by compromising the quality and thereby creating business risks. This may cause serious business losses with issues occurring for business continuity if they experience equipment failure or natural disaster. In other cases UC vendors are simply reselling services that are hosted in a third-party data center, which may or may not offer adequate security.

Poor Response to Demand

  • Enterprises encounter fluctuations in voice call volume and demand for data services. The business can encounter massive spike in inbound customer service calls anytime now that require hiring temporary customer service representative. Regardless of whether the same demand is encountered the UC provider must scale to meet demands is important.
  • The best way to find that the vendor can scale to the needs is by inquiring the vendor whether they possess their own instance of the UC platform that they use. Vendor with their own instance of Broadsoft, MetaSwitch, ShoreTel are better in providing scalable solutions on demand.

Inadequate Data Encryption

  • In treating voice calls as a form of data there is security and cost-savings advantages., especially with fiber-optic internet connectivity. All of the organizations data that comes from the UC vendor must be encrypted. It must be ensured that the encryption must be performed in-transit and when data is at rest.

Public Internet Connectivity

  • Many UC Service Providers promise that they offer all the services but they miss out on one of the key services, data connectivity. To unlock the benefits of UC a Service Provider who offers CloudConnect via a dedicated circuit is crucial.

No On-Demand Account Management

  • Provisioning access control over UC Applications is much simpler than alternative business communication tools. It must be ensured that access management capabilities are offered for the on-site IT administrator both mobile and remote management so the accounts can be added and removed off-site. Common capabilities needed includes the ability to add extensions, change user information, manage user PINs, disable or enable international calling and cloud network access.

Top Market Opportunities

Customer Demands

  • As conferencing services have become basic communication tool within the enterprise environment. users are demanding a simple user experience and content-sharing facility(in case of web conferencing) with high definition audio and video quality and the capability to connect from multiple devices. These customer demands remain as an opportunity before OEMs and service providers to have customer acqusitions.

Cloud Services Model gaining traction

  • The hosted or cloud services model of unified communication has proved to be disruptive and a blessing for both the large enterprises and SMBs. The factors supporting the growth of the Cloud Service Model includes scalability, reduced TCO, minimal CAPEX and flexibility.

Market Drivers

Proliferation of Smart Phones and BYOD Trend

  • The growth in sales of mobile phones has increased the adoption of unified communication among end users. According to “Ericsson Mobility Report” published in 2015, the number of smartphone users is expected to reach 6.1 billion by 2020. In addition, 90% of the population is supposed to have access to high-speed internet and 80% of the new smartphone users are expected to be from Asia-Pacific and LAMEA. Further, another analysis from Cisco states that India is expected to have around 650 million smartphones by 2019. Moreover, increased adoption for bring your own device (BYOD) among enterprise from all industry verticals is expected to drive the demand for unified communication during the forecast period.

Increased Demand for Cloud Based Solutions

  • Rise in adoption of cloud-based technology along with usage of social media platforms drives the growth of the market. At present, cloud technology is adopted widely amongst all the businesses, which provide enterprises affordable communication solutions. Cloud computing allows the model to function from anywhere and anytime. In addition, the implementation of cloud enables organizations to combine supplementary infrastructure technologies such as software-defined perimeters to create robust and highly secure platforms. Hence, the rise in the adoption of the cloud-based solutions drives the growth of the Unified Communication Market.

The “instant” factor and the reduction of turnaround time

  • Using Unified Communications a person in a remote location can contact another geographically separated person instantly through their preferred mode of communication be it Instant Messaging, Telephony or Video conferencing. And Unified Communication can significantly reduce downtime that’s implicit in any interaction. Consider this: according to an AT&T study, more than 70 percent of business calls are placed on hold for an average of 45 to 60 seconds each. The average executive spends 17 minutes each day on hold, and some 80 percent of phone calls end up in voice mail. UC curbs the wastage of time by letting users reach the right person at the right time through their preferred mode of contact. This goes way beyond slashing hold times or staying clear of voice mail. It means organising information faster and getting that information to the right person in a usable format when the recipient needs it most.

The Consumerization of IT

  • Due to the consumerization of IT, Unified Communication is gaining popularity in the consumer market then spreading to business and government organizations largely driven by employees are using Unified Communication technologies at home and then introducing them in the workplace.

Market Restraints

Complexity in Implementing Unified Communication

  • The number one pain point involved in the implementation of Unified Communication is the complexity. The amount of technology and human interactions involved is typically 10 times greater than a normal phone conference. There is a need to understand the technology, hardware, software and configuration which includes the translation between proprietary protocols. More importantly there is a need to understand how users will utilize the solution, how the physical environment, and in many cases language, culture and time zones will affect the use case. The human factor is sadly very often overlooked or underestimated. Reliable support for the communication part of the setup is also important.

Cost of deploying Unified Communication

  • The cost for deploying Unified Communications Applications with minimal features is USD 17,000 which cannot be afforded by SMBs.

Lack of Tangible ROI

  • More Tangible ROI can be achieved only using “least-cost-routing” options that UC platforms enable for calls from mobile phones. The other options such as telephony or video-conferencing which usually comes with a higher price tag does hinder the tangible ROI.

Industry Challenges

Quick response or attention to increasing demand

  • The biggest unified communication challenges seem to be with the IT staff remembering there are voice applications running on the LAN and being routed to the internet. Changes to the LAN, your IP address or the ISP can all cause these features to quit working. But a little pre-planning and advance notice when changes are scheduled to be made can prevent these issues and not cause down time for the business.

Shortage of Skilled labor

  • As Unified Communications is an emerging and new technology, up-skilling employees with the advanced technologies on VOIP protocols and on the implementation technologies of Unified Communication is redundant.thereby creating shortage of skilled labor in the domain.

Technology Trends

BYOD and Mobility

  • The users no longer power up a corporate laptop to read a email, check status of an order via instant messaging or hold an important video conference with a key client. With more organizations embracing Bring Your Own Device (BYOD) programs the mobile employees are using mobile unified communications applications on their personally-owned devices to get their jobs done.

Virtualization

  • Virtualization is gaining ground in the unified communications market, no matter the size of the enterprise customer. Whether as a large scale deployment in an enterprise data center or as a turn-key appliance, unified communications virtualization is the next logical step for customers and vendors alike.

SIP Trunking

  • Unified Communication is made possible by the use of Session Initiation Protocol (SIP) technologies such as SIP trunk which carry real-time communication (Voice, Video and Instant Messaging) over IP networks. SIP trunk typically helps boost employee productivity and collaboration while reducing operational costs.

Regulatory Trends

  • In September 2018, the Government of India has installed the National Digital Communications Policy, which aims to generate 2 lakh jobs in the Unified Communications domain by 2022.One of the other major goals of the policy includes attracting USD 100 Billion into the telecommunications sector as a whole.
  • To ensure better collaboration between the far-flung offices of different departments and institutions, the government is deploying video conferencing in a major way. The Digital India initiative, which seeks to connect 2.5 lakh villages with high-speed broadband, is expected to bring further growth to the unified communications and video conferencing market

Market Size and Forecast

  • The market size of the Indian Unified Communications market is estimated to be USD 1,506.2 Million in 2018 growing at a healthy CAGR of 12.4% which includes Applications and Services.
  • The Unified Communications Core Communications accounted for USD 976.94 Million in 2018 clocking a healthy CAGR of 12.4%
  • Majority of the India unified communication market revenues are generated primarily from large scale businesses, which accounted for 64.0% of the total market revenues in 2018.
  • The market size of the Unified Communications Applications accounted for USD 531.06 Million in 2018 growing at a steady CAGR of 16.4%
  • The Unified Communications Services market size is estimated to be USD 150.62 Million in 2018 growing significantly at a CAGR of 18.2%
Market size - uc.PNG

Market Outlook

  • The market size is expected to grow to a total of USD 2,702.2 Million in 2023 clocking a healthy CAGR of 12.4%.
  • Voice-based unified communication solutions have acquired major piece of the market revenues in the India UC market and video conferencing is emerging as the fastest growing UC market in India.
  • The telephony segment dominated the unified communication market in 2018, with around 29% revenue share and mobility segment is anticipated to exhibit fastest growth rate. This is attributed to the improved IT infrastructure and increased cloud-related expenditures.
  • The IT and telecom segment dominated the Indian unified communication market, with around 21% share in 2018, followed by BFSI segment. Furthermore, energy and utilities sector segment is estimated to grow at the highest CAGR of 15.06%, owing to widespread adoption of advanced solutions and increased IoT spending.
Market outlook1.png

Distribution Chain Analysis

The Deployment model adopted in the implementation of Unified Communication is plug and play where the applications are offered through VOIP Protocols such as Session Initiation Protocol (SIP) technologies which includes SIP trunk. The payment mode is fixed tariff for the services offered at a per-user basis.

Competitive Landscape

  • Players provide extensive UC solutions to offer consistent end-use experience. Lately, companies have been focused on providing cloud-based UC solutions owing to growing transition toward multi-model interaction with video, voice, and messaging. For instance, Cisco Systems Inc. provides Cisco Hosted Collaboration Solution (HCS) that helps enterprises deploy UC in their businesses.
  • Companies are engaging in collaborations and acquisitions to maintain their market presence. For instance, in April 2016, NEC Corporation and Hewlett Packard Enterprise entered into a collaboration to develop solutions jointly, thereby capturing new opportunities in key geographies. This alliance has enabled companies to quickly accelerate adoption of mobile-first networking to improve workplace productivity.
  • In January 2016, Microsoft Corporation acquired technology assets of Event Zero for UC commander solutions. This acquisition has allowed Microsoft Corporation to enhance and expand built-in management tools for Skype for Business.

Competitive Factors

Reliability and Availability

  • Unified Communications is revolutionizing the way we communicate, it must be reliable in order to deliver the utmost in user productivity. If Unified communication is expected to play a major role in increasing user productivity it has to be reliable, dependable and consistent in its delivery. This is no easy task. When UC is down, productivity is down, and users and enterprise customers are dissatisfied. The unreliable delivery of UC services will damage the reputation of UC. It will be harder to regain the user's confidence to return to the UC functions than it was to convince the user to try UC in the first place.
  • Technology vendors and providers often throw around the term five nines (99.999%) availability when discussing their products or services, and the unified communications (UC) market is no different. The term is used so often that the average technologist doesn't think twice about it. First of all, five nines does NOT refer to reliability. It refers to availability. Availability is the probability that a device or service will be working when you go to use it.Thus the Service Provider offering higher reliability and availability are set to dominate the market.

Scalability

  • The Unified Communications Applications and Services requires to answer the rising demands during peak hours. Enterprises encounter fluctuations in voice call volume and demand for data services. The business can encounter massive spike in inbound customer service calls anytime now. Regardless of whether the same demand is encountered the UC provider must scale to meet demands is important. The Service Providers that offer scalable solutions are the front-runners in the Sector.

Lowest Total cost of Ownership

  • The Service Providers that focus on reduction of tangible costs and enable correct choice between long distance network vendors are set to rule the market.

Key Market Players

  • Polycom is an American multinational corporation that develops video, voice and content collaboration and communication technology. The firm employs approximately 3,800 employees and had annual revenues of approximately $1.4 billion in 2013. It is the largest pure-play collaboration company in its industry. The company also licenses: H.264 video codecs, Siren codecs, session initiation protocol, native 1080p high-definition cameras and displays, native 720p and 1080p high-definition encoding/decoding, low-latencyarchitecture and low bandwidth utilization, wideband advanced audio coding with low delay (AAC-LD), multichannel spatial audio with echo cancellation and interference filters to eliminate feedback from mobile devices, and inter-operation with legacy video conferencing. On March 28, 2018, it was announced that Polycom would be acquired by Plantronics
  • Unify is headquartered in Munich, Germany and is present in over 100 countries. The company provides software-based enterprise unified communications including voice, Web collaboration, video conferencing and contact center, networking product and services.
  • BSNL is an Indian state-owned telecommunications company headquartered in New Delhi. It was incorporated on 15 September 2000 and assumed the business of providing telecom services and network management from the erstwhile Central Government Departments of Telecom Services (DTS) and Telecom Operations (DTO) as of 1 October 2000 on a going-concern basis. It is the largest provider of fixed telephony and broadband services with more than 60% market share, and is the fifth largest mobile telephony provider in India.
  • Bharti Airtel is an Indian global telecommunications services company based in New Delhi, India. It operates in 20 countries across South Asia and Africa. Airtel provides GSM, 3G, 4G LTE mobile services, fixed line broadband and voice services depending upon the country of operation. Airtel had also rolled out its VoLTE technology across all Indian telecom circles except Jammu and Kashmir and Andaman and is likely to launch in these circles soon. It is the second largest mobile network operator in India and the third largest mobile network operator in the world with over 438.04 million subscribers. Airtel was named India's second most valuable brand in the first ever Brandz ranking by Millward Brown and WPP plc.
  • Cisco is an American multinational technology conglomerate headquartered in San Jose, California, in the center of Silicon Valley, that develops, manufactures and sells networking hardware, telecommunications equipment and other high-technologyservices and products. Through its numerous acquired subsidiaries, such as OpenDNS, WebEx, Jabber and Jasper, Cisco specializes into specific tech markets, such as Internet of Things (IoT), domain security and energy management.
  • Avaya is an American multinational technology company headquartered in Santa Clara, California that specializes in business communications, specifically unified communications (UC), contact center (CC), and services. Serving organizations at 220,000 customer locations worldwide,Avaya is the largest pure-play UC and CC company, ranking No. 1 in CC and No. 2 in UC and collaboration. The company had FY17 revenues of $3.3 billion, 78% of which was attributed to software and services.
  • MTNL is a state-owned telecommunications service provider in the metro cities of Mumbai and New Delhi in India and in the island nation of Mauritius in Africa. The company had a monopoly in Mumbai and New Delhi until 1992, when the telecom sector was opened to other service providers.
  • TTSL is an Indian broadband and telecommunications service provider based in Mumbai, Maharashtra, India. It is a subsidiary of the Tata Group, an Indian conglomerate. It operates under the brand name Tata DoCoMo in various telecom circles of India.Tata Teleservices have sought to exit mobile telecom due to heavy losses and debt and sell its unit to Airtel in a debtfree and cash-free deal and described as virtually free and Airtel will only pay a part of Tata Teleservices's unpaid spectrum payment liability.
  • Microsoft is an American multinational technology company with headquarters in Redmond, Washington. It develops, manufactures, licenses, supports and sells computer software, consumer electronics, personal computers, and related services. Its best known software products are the Microsoft Windows line of operating systems, the Microsoft Office suite, and the Internet Explorer and Edge web browsers.

Strategic Conclusion

  • The Unified Communications Applications market size is estimated to be USD 531.06 Million in 2018 clocking a healthy growth rate of 16.4%, whereas the Unified Communications Services segment holds a market size of USD 150.62 Million in 2018 boasting a CAGR of 18.2%. The Unified Communications market as a whole holds a market size of USD 1506.2 Million clocking a healthy CAGR of 12.4%.
  • The market is driven by factors such as Proliferation of Smart Phones and BYOD Trend, Increased Demand for Cloud Based Solutions, The “instant” factor and the reduction of turnaround time, The Consumerization of IT.
  • Quick response or attention to increasing demand, Shortage of Skilled labor are the challenges that the industry is currently facing.
  • Increased investments from Government of India on reforms such as “Digital India” and the adoption of cloud and mobility is expected to fuel the growth of the Unified Communications (UC) Applications and Services market.

Further Reading

Appendix

  • USD – US Dollar
  • OEM - Original Equipment Manufacturer
  • SMB - Small and Medium Business
  • TCO - Total Cost of Ownership
  • ROI - Return on Investment
  • CAGR – Compounded Annual Growth Rate
  • BYOD – Bring Your Own Device
  • CAPEX - Capital Expenditure


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