SOURCE: Frost & Sullivan

March 21, 2011 08:40 ET

Audio Conferencing Service Providers to Tack On More Services to Stay Afloat, Finds Frost & Sullivan

MOUNTAIN VIEW, CA--(Marketwire - March 21, 2011) - The North American audio conferencing services markets rebounded from the economic downturn in 2009, as businesses reduced non-essential travel and opted for audio conferencing instead. However, persistent price pressure, the offer of 'free' audio conferencing services, and competition from unified communications services expect to bridle the pace of revenue growth.

Stand-alone audio conferencing services may well be on their way out, as audio conferencing minutes are being increasingly bundled with other collaboration solutions.

New analysis from Frost & Sullivan (http://www.conferencing.frost.com), North American Audio Conferencing Services Markets, finds that the markets earned revenues of $2.7 billion in 2009 and estimates this to reach $3.3 billion in 2016. The demand for audio conferencing services was 54.1 billion minutes in 2009, and the traffic volume expects to grow to 84.1 billion minutes in 2016.

If you are interested in more information on this study, please send an e-mail to Mireya Espinoza, Corporate Communications, at mireya.espinoza@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country.

The cost and technology barriers to converged conferencing are beginning to pale in front of the overwhelming benefits of audio conferencing solutions. Furthermore, their ease of management in a tightly integrated collaboration environment often enhances productivity and thereby, results in wider acceptance of the technology.

In the past, conferencing usage was highly fragmented, as enterprises deployed a combination of technologies and service delivery channels. Consequently, they had to manage a certain percentage of customer premise equipment (CPE) as well as hosted services, which increased complexity and cost.

"Businesses that traditionally used disparate services (a combination of hosted services and premises-based equipment) to address their conferencing needs have started consolidating them under a single provider or infrastructure," says Frost & Sullivan industry analyst Shyam Krishnan. "This has benefitted the conferencing service providers (CSPs) that have enhanced their capabilities to offer converged audio, video, web conferencing and hosted unified communications applications."

Network service providers have started acquiring businesses to build audio, video- and Web capabilities to make the most of this opportunity. While core markets become saturated, there are lower entry barriers, leading to an influx of large and small companies.

Remarkably, the markets are witnessing consolidation and fragmentation simultaneously. The top-tier companies are engaging in mergers and acquisitions, while the lower end of the markets are witnessing the entry of a number of small service providers.

These emerging companies are compelling incumbents to relent to price pressure, especially with participants offering free audio conferencing services over the Web. Conversely, the Web has become a key tool for providing integrated, value-added services and applications that can be bundled with traditional services.

The markets are likely to continue experiencing competition, not just from within, but also from outside, as Web conferencing service companies are incorporating audio conferencing service capabilities in their portfolio. The competition from voice over Internet protocol (VoIP) service providers and unified communications vendors is also intensifying.

"In such a highly competitive market, CSPs that can offer differentiated services at the best possible price points will succeed," notes Krishnan. "CSPs that have linked their services to measurable productivity gains have found greater acceptance in the market."

North American Audio Conferencing Services Markets is part of the Conferencing and Collaboration Growth Partnership Services program, which also includes research in the following markets: World Videoconferencing Endpoints Market, World Web Events Services Markets, North American CSP-based Videoconferencing Services Market and World Videoconferencing Infrastructure Systems Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

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North American Audio Conferencing Services Markets
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