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“The expansion of US providers into European markets will increase price pressures as they offer both lower prices for basic services and the delivery of more comprehensive service bundles,” said Digital Transformation Vice Principal Elka Popova. “National boundaries in European markets are relatively small compared to the US and do not allow providers to sufficiently scale their operations. To succeed and maintain high growth rates, European providers must seek to expand throughout Europe and internationally.”
Key trends in the European IP telephony and UCaaS market include:
- Availability of feature-rich, inexpensive cloud collaboration solutions comprising team messaging as well as real-time communications functionality; providers must leverage options like a “freemium” model to attract businesses that are not yet ready to move their entire UCC to the cloud.
- Enterprise demand for custom-tailored solutions and communications integration with other business software to directly influence key business processes, and gain more tangible business benefits from communications investments. In response, technology developers and service providers are providing flexible application program interfaces (APIs), software development kits (SDKs), and communication PaaS (CPaaS) environments.
- Service providers seeking to ride the “API economy” wave by enabling integration with popular third-party software, including productivity suites, customer relationship management (CRM), helpdesk, and vertical apps, in order to improve UCaaS stickiness and customer satisfaction.
- Strong market penetration in the Nordic and the Benelux regions due to highly mobile workforces and limited installed base of premises-based systems.
- High growth rates in Central and Eastern European countries due to relatively limited UCaaS penetration and high demand for flexible and economical communications solutions. With their large workforce and population, France, Germany and the UK will account for the largest installed base.
“To enhance market share in a competitive market, hosted IP telephony service providers must optimize their sales, provisioning, and customer engagement processes based on their target customer audience; for instance, introduction of highly automated e-commerce portals for SMB customers and development of greater consultative skills to address large enterprise needs,” noted Popova. “Further, they can enhance onboarding, training and customer support capabilities to ensure greater customer satisfaction, and expand customer reach by acquiring technologies or partnering with third parties for solution resale and/or app integration.”
Major players in the European hosted business communications services include BT, Elisa, Hrvatski Telekom, KPN, Netia, NFON, Orange, TDC, Telefonica, Telenor, Telia-Sonera, Verizon, and Vodafone. Among US providers targeting European markets, 8×8, Fuze, Microsoft (with Office 365 E5 bundle), and RingCentral have strong potential with their feature-rich, competitively priced UCaaS solutions.
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SOURCE Frost & Sullivan