Pricing under heavy strain as telephony market shrivels in Q1

But unified communications sales on the up, claims Infonetics Research

The telephony market posted its worst figures in four years during a difficult first quarter in which all the major players came under "hyper-competitive price pressure".

Figures from Infonetics Research reveal that global PBX revenue in Q1 slumped nine per cent sequentially and 10 per cent year on year to $1.8bn (£1.2bn). This represents the market's worst quarterly performance since mid-2009.

The analyst notes that pricing came under heavy strain during the quarter as leading manufacturers Avaya, Cisco, NEC and Siemens all fought hard to hang on to existing clients and woo new ones. But NEC was singled out as one of only a handful of players to post annual revenue gains, alongside Mitel, ShoreTel and LG Ericsson.

Despite the tough climate, the market for unified communications solutions is seemingly in rude health, with revenue rising more than a fifth year on year. This allowed Microsoft to gain a stronger footing in the telecoms market, claimed Infonetics.

Diane Myers, principal analyst for VoIP, UC and IMS at the analyst, said: "The big squeeze is coming from hyper-competitive price pressure all over, with average revenue per line down across the board. But conservative spending by businesses is exacerbating the problem in some regions, while demand is actually flat-to-up in North America and Asia, reflecting uneven economic recoveries."