Talking growth

Middle East a key market for enterprise sector

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By  Published  October 31, 2006

Saudi Arabia and the United Arab Emirates have emerged as key battlegrounds in the contest for market share among enterprise telephony vendors.

Shipments of enterprise telephony lines crept up 6.4% year-on-year to 5.4 million during the second quarter, according to research house Canalys, which cited the Gulf’s two largest markets as prime growth spots.

Russia and other areas of Eastern Europe also witnessed increased levels of infrastructure investment as the size of the overall EMEA enterprise telephony market grew to 10.8 million units for the first half of 2006.

Competition among manufacturers remains as strong as ever with Siemens closing the gap on market leader Alcatel despite the latter enjoying a spike in the Russian market where it has invested in growing its business.

Siemens’ progress continues to be keenly tracked by the networking industry after it announced intentions to dispose the remaining elements of its Com business unit.

That followed the formation of a joint venture with Nokia at the beginning of the quarter to focus on the service provider area.

“Siemens needs to demonstrate its commitment to the enterprise telephony sector quickly in order to retain and attract customers and channel partners, as its competitors are likely to focus on this weakness,” said Matthew Ball, analyst at Canalys.

Rival Nortel looks as well-placed as anybody to capitalise on any hesitation after leaping into third spot during the second quarter.

It bolstered sales by 19% year-on-year to 574,000 units.

Avaya and Canadian outfit Aastra remained locked in a battle for fourth position after Aastra’s acquisition of the telco systems business of Germany-based DeTeWe last year.

That deal has helped Aastra to grow shipments by more than 39% compared with the same quarter last year, forcing its market share up to 9.9% — level with Avaya.

Just outside the top five, Ericsson and Panasonic remained narrowly ahead of Cisco.

The enterprise telephony market continues to stand out as a sector where indirect channels remain the major route-to-market for vendors.

Canalys data shows that almost 90% of line shipments were delivered by resellers, service providers and systems integrators during the second quarter.

Channel players can therefore look forward to securing a large chunk of the market in coming years.

With commercial clients replacing legacy systems at a rapid clip, the EMEA market for enterprise telephony line shipments should reach 24.6 million units within the next three years.

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