Cloud Telephony Services in India

Customer Engagement and Experience with Cloud Telephony

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December 2014
 Contents

Section Slide Number

Executive Summary 4

Market Overview 6

Market Trends 9

Impact of Cloud Telephony 15

Profiling of Major Market Participants 24

The Last Word 30

Appendix 32

The Frost & Sullivan Story 35

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Key Findings

• Cloud telephony in India has witnessed growth in adoption during the last few years. This is
because the cost and features being offered are more attractive over plain vanilla hosted
electronic private branch exchange (EPBX) and PBX solutions.
• The market is being driven by participants that are startups or small and medium businesses
(SMBs) and by those that target the SMB and the micro SMB (MSMB) segments.
• Cloud telephony is very attractive to these segments as basic functions and requirements of
a company can be completely outsourced and there is no locking in of contracts and
equipment.
• Business lead management, tracking of customer engagement and interaction levels, and
analytics derived from the cloud platform are the most often sought benefits from cloud
telephony.
• As the market is still at a nascent stage, most participants offer the lower range of offerings
such as outbound dialers or bulk SMS broadcasting. More sophisticated participants offer
application programming interfaces (APIs) and analytics as part of the solution offerings.
• Cloud telephony allows SMBs and MSMBs to choose multiple virtual phone numbers, toll-
free numbers, and features such as call routing to ensure that a line never appears to be
busy. Source: Frost & Sullivan

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Market Definitions—Cloud Telephony

Segment Cloud Telephony

Cloud telephony is a mechanism to deliver telephone applications on the cloud as a hosted
solution (such as hosted PBX or a hosted phone system).
Cloud telephony is built on a platform in the cloud through which enterprises can build their
own applications using APIs or use existing services from the service provider.
Definition
The cloud platform has a Time Division Multiplexing (TDM) Centrex, with lines rented or
bought from a service provider at the back end. Due to the telecom regulatory environment
in India, cloud telephony done over IP or the Internet is not widely adopted and it is not
covered under this definition.
Value Chain
Service Providers
Participants
• Interactive Voice Response Functions (IVR)—Outbound and Inbound
• Call Analytics
• Integration with software such as CRM or ERP
Applications • Virtual Receptionist or Automatic Call Distribution (ACD)
• Fax
• Short Message Service (SMS)
• Contact Center

Note: Although there are forms of cloud telephony offered by bigger vendors such as Cisco and Avaya, these vendors are not covered under this report as these
solutions are more expensive and are used by very large organizations
Source: Frost & Sullivan

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Research Objectives, Scope, and Methodology

Research Objectives
• This market insight provides an analysis of the cloud telephony services market in India.
• It analyzes the market trends and vendor profiles for India.

Research Scope
• Geographic Scope: India
• The scope of this research includes service providers that offer cloud telephony solutions.

Research Methodology
• Primary research with service providers
• Frost & Sullivan published research services
• Published news
• Company websites and other secondary sources

Source: Frost & Sullivan

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Market Drivers

Cloud Telephony Services Market: Key Market Drivers, India, 2014–2020

Drivers 1–2 Years 3–4 Years 5–7 Years

Being easy to subscribe, easy to scale, and

extremely reliable, cloud telephony is expected to
H H M
witness an increase in traction over the next few
years.

Cloud telephony is an attractive solution for SMBs

as it results in lower telephony costs with H H M
investments required only for telephone handsets.

With successful use cases present for almost every

vertical, the market is expected to witness high H M L
growth over the next 3 to 4 years.

Impact Ratings: H = High, M = Medium, L = Low Source: Frost & Sullivan

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Market Drivers—Explained

Being Easy to Subscribe, Easy to Scale, and Extremely Reliable, Cloud Telephony is Expected to
Witness an Increase in Traction Over the Next Few Years

• Every organization requires a telecommunication solution which is the backbone of everyday business.
Unfortunately, the time, cost, and resources required to set up this vital part of the organization usually
can stretch from days to weeks.

• With cloud telephony, this can be done in a day and therefore becomes attractive to startups and SMBs
that are dependent on establishing communication channels.

Cloud Telephony is an Attractive Solution for SMBs as it Results in Lower Telephony Costs with
Investments Required Only for Telephone Handsets

• With major investments being only in telephone handsets and with extremely low rental plans, the
traction in this market is expected to increase exponentially over the next few years.

With Successful Use Cases Present for Almost Every Vertical, the Market is Expected to Witness
High Growth Over the Next to Years

• Cloud telephony is not restricted to only IT and ITeS verticals. There are many successful use cases
present in the market—from transportation to real estate to ecommerce.

• As awareness levels of benefits increase, adoption is expected to pick up in the medium- to long-term.
Source: Frost & Sullivan

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Market Restraints

Cloud Telephony Services Market: Key Market Restraints, India, 2014–2020

Restraints 1–2 Years 3–4 Years 5–7 Years

The telecom regulation regarding the mixing of Time Division

Multiplexing (TDM) and Internet Protocol (IP) prohibits cloud
telephony to be implemented over IP or the Internet, thereby H H M
slowing down adoption as SMBs also look towards
implementing VoIP solutions.

There is a lack of awareness about cloud telephony

technology and the benefits an organization will gain from H M M
implementation of the solution.

It is a cumbersome process if an organization has already

invested in on-premise or hosted PBX boxes but wishes to H M L
scale up or gain new functions through cloud telephony.

Impact Ratings: H = High, M = Medium, L = Low Source: Frost & Sullivan

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Market Restraints—Explained

The Telecom Regulation Regarding the Mixing of Time Division Multiplexing (TDM) and Internet
Protocol (IP) Prohibits Cloud Telephony to be Implemented over IP or the Internet, thereby Slowing
Down Adoption as SMBs also Look Towards Implementing VoIP Solutions

• The national telecom policy, which does not allow the mixing of TDM and IP, limits the functionalities
and modes of interacting with customers to over Public Switched Telephone Network (PSTN) lines.

• Enterprises are wary of adopting cloud telephony as they are unaware of how scalability, reliability, or
upgrading of technology will be dealt with if the telecom environment changes in near future.

• Many enterprises also look towards adopting VoIP solutions to lower call costs within the organization.
The requirement of 2 different solutions are hampering the growth of cloud telephony.

There is a Lack of Awareness about Cloud Telephony Technology and the Benefits an Organization
will Gain from Implementation of the Solution

• Low awareness on the benefits and the working of cloud telephony is resulting in slow adoption.
Enterprises are wary of investing in new technology without fully understanding the risks and benefits.

• Market participants are creating awareness. Therefore, adoption is expected to increase over time.

Source: Frost & Sullivan

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Market Restraints—Explained (continued)

It is a Cumbersome Process if an Organization has Already Invested in On-premise or Hosted PBX

Boxes but Wishes to Scale Up or Gain New Functions through Cloud Telephony

• In many cases, companies that have already invested in an on-premise solution or a hosted solution
directly from a telecom provider are wary of the technical difficulty and the cost of scaling up to be done
through cloud telephony.

• Many market participants are helping enterprises overcome this challenge by enabling plans such as
Bring Your Own Primary Rate Interface (PRI) lines and cards, which can be integrated into the cloud
platform.

Source: Frost & Sullivan

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