MICROSOFT'S ENTRY TRANSFORMS EUROPEAN IP TELEPHONY

LONDON, March 26 /PRNewswire/ -- Business telephony is evolving beyond the simple private branch exchange
(PBX). Currently, it encompasses a suite of new capabilities which include
conferencing, collaboration, messaging and mobility. 'Software-as-a-service'
and network-based communication capabilities are gaining significant
mind-traction. The entry of Microsoft into this arena is set to revolutionise
the European enterprise telephony markets.


Frost & Sullivan (http://www.enterprisecommunications.frost.com) finds
that the European Enterprise Telephony Markets shipped approximately 21
million lines in 2006 and estimates this to peak at 25.8 million lines in
2008 before declining to around 24.6 million lines by 2010.


Despite being in the midst of a replacement cycle, the growth rate of the
enterprise telephony markets is declining. In 2006, the total lines shipped
approximated 21 million. The growth in line shipments marked a sharp increase
over 2005. The seasonal variation in procurement was moderated in 2006.
Second half of the year registered a sharp increase in uptake.


"Poor uptake in France, Italy, Nordics and Spain has been responsible for
the low growth rate of IP telephony deployments in Europe," notes Frost &
Sullivan Industry Analyst Shomik Banerjee. "Pure IP shipments are continuing
to grow. However, the growth of IP-capable systems outnumbers the growth of
IP usage."


Capex investments improved; a positive trend that's likely to continue in
2007.Enterprises' new investments increasingly include IP technology although
phased migration continues to remain in vogue. Enterprises that have already
deployed IP in their networks are beginning to look for ways to leverage the
technology. The idea that IP is only a means to achieve greater capabilities
is gaining strong traction.


At present, alternate business models such as managed services and hosted
services are threatening the on-premise proposition. Microsoft's entry into
the unified communication arena has boosted the software-based solutions
market. There is a sense of urgency amongst vendors. Legacy players have
introduced aggressive marketing campaigns to protect their installed base by
offering compelling schemes towards IP telephony migration.


"The entry of Microsoft has not only made software-based solutions a
de-facto alternative to hardware-based PBX, but has also propelled the case
for enterprise convergence through unified communication," explains Mr.
Banerjee. "Given the situation, developing a strong ecosystem is crucial for
vendors to survive this transformation. Endorsing open technologies will also
become crucial."


If you are interested in a virtual brochure, which provides
manufacturers, end users, and other industry participants with an overview of
the latest analysis of the European Enterprise Telephony Markets, send an
e-mail to Srividhya Parthasarathy - Corporate Communications at
sparthasarathy@frost.com with your full name, company name, title, telephone
number, e-mail address, city, state, and country. We will send you the
information through email upon receipt of the above information.


European Enterprise Telephony Markets is part of the Enterprise
Communications Subscription, which also includes research in the following
markets: legacy TDM-based solutions, IP-enabled PBX solutions, IP-centric PBX
solutions, IP Centrex, managed services (IP-enabled or IP PBX). All research
included in subscriptions provide detailed market opportunities and industry
trends that have been evaluated following extensive interviews with market
participants. Interviews with the press are available.


Frost & Sullivan, a global growth consulting company, has been partnering
with clients to support the development of innovative strategies for more
than 40 years. The company's industry expertise integrates growth consulting,
growth partnership services, and corporate management training to identify
and develop opportunities. Frost & Sullivan serves an extensive clientele
that includes Global 1000 companies, emerging companies, and the investment
community by providing comprehensive industry coverage that reflects a unique
global perspective and combines ongoing analysis of markets, technologies,
econometrics, and demographics. For more information, visit www.frost.com


European Enterprise Telephony Markets B999-62


List of key words in this press release: Europe, business telephony,
private branch exchange, PBX, conferencing, messaging, network based
communication, enterprise telephony, France, Italy, Benelux, IP telephony,
pure IP, IP capable systems, IP technology, managed services, hosted
services, Microsoft, unified communication, software based solutions,
hardware based PBX, research, information, market, trends, technology,
service, forecast, market share


List of key industry participants: 3Com, Agilent, Alcatel, ArtiSoft,
Avaya, BroadSoft, BT, cBeyond, Centile, Cisco, Citel, Comunitel, Contel,
Convedia, Ericsson, FastWeb, France Telecom, Fujitsu, GoBeam Comunications,
Inclarity, Ingate Systems, Innovaphone, Intelis, Interactive Intelligence,
Inter-Tel, Kagoor, Lucent, Marconi, Masergy, Mera Networks, Mitel, Natural
Covergence, NEC, Net Tone, NetCentrex, NexTone, Nortel, PingTone, Polycom,
Siemens, Snom, Sonus Networks, Swyx, Sylantro, TDC, TDC Norway, TDC Sweden,
Telchemy, Telecom Italia, Telefonica, Telefonica Deutschland, TeliaSonera,
T-Systems, Ubiquity, Unient, Utstar, Vcon, VocalData, Zultys



Media Contacts:

Europe:
Srividhya Parthasarathy
Corporate Communications
P: +91-(0)44-42044668
E: sparthasarathy@frost.com

Americas:
Mireya Castilla
Corporate Communications
P: +1-210-247-3830
F: +1-210-348-1003
E: mireya.castilla@frost.com

India:
Ravinder Kaur
Corporate Communications
P: +91-44-42044515
F: +91-44-24314264
E: ravinder.kaur@frost.com

Asia Pacific
Sarah Lourdes
Corporate Communications
P: +60-3-6204-5878
E: sarah.lourdes@frost.com

Australia:
Sharmin Jassal
Corporate Communications
P: +61-2-8247-8900
F: +61-2-9252-8066
E: sharmin.jassal@frost.com