From the Enterprise VoIP Experts

January 03, 2013

Do Hosted PBX Services Now Compete with Mobile Phones?

By Contributing Editor

Some 65 percent of the 500 U.K. chief information officers surveyed by Vanson Bourne on behalf of Virgin Media Business believe fixed network telephones “will disappear from everyday use within five years,” Virgin Media Business says.

Since employees habitually use their mobile phones for calls, even when they sit at their desks, it  is bound to cause executives to wonder whether they can do without their business phone systems, in some cases.

Hosted PBX services will often be pitched as an alternative to a premise business phone system, and will probably continue to make sense for mid-sized businesses and many smaller businesses.

But thinking might be quite different at small companies, as often is the case. Some argue that small companies are cutting landlines the fastest. These companies often lack staff to oversee deployment of a PBX, and they frequently also lack the budget.

All of that of course poses issues for sales of business phone systems, but also of hosted PBX services, which then must be positioned not against premises phone systems, but against the cost of supporting mobile phones.

That’s an issue for suppliers of hosted PBX services, though how big an issue is not so clear. Nor is it easy to determine how much demand there is for hosted PBX, or how fast demand might be growing. In part, that is because hosted PBX often is lumped in with other services such as SIP trunking, managed services or unified communications.

One estimate pegs hosted PBX adoption as something above seven percent of small business or medium business sites, but below 10 percent, with a U.S. market therefore representing less than $1 billion in annual revenue, heading for $4 billion annually.

Infonetics Research estimates that the number of hosted VoIP seats in use will double between 2012 and 2016, for example. And though the actual current size of the hosted PBX market continues to be a matter of some debate, there are 40 million U.S. business lines in service, not to mention mid-market or enterprise locations that would be logical candidates for a hosted solution.

So far, we have not seen clear evidence that mobile phones are depressing demand for hosted PBX services or business phone systems. But it bears watching.

Want to learn more about SIP Trunking and how to integrate it into your current UC strategy? Don’t miss the SIP Trunking- UC Seminars in South San Francisco on November 27, 2012.

Edited by Brooke Neuman