Merger fever hits telecoms market

Telecoms providers are merging to boost market share rather than trying to win customers in an overcrowded market, according to Canalys.

In its latest report on the market in the third quarter of 2003 the analyst firm found that the total EMEA enterprise telephony market grew by six per cent in the past quarter, with the bulk coming from Russia and the Middle East.

Siemens finished the quarter as market leader with 17 per cent share, followed by Alcatel with 15 per cent.

But Avaya's acquisition of Tenovis, and the announcement by Aastra of its intentions to buy EADS Telecom, signified a major shift in an overcrowded marketplace, the study noted.

Providers will increasingly look to buy competitors rather than find new customers when there are already too many providers, Canalys predicted.

"There are still too many vendors in EMEA and further acquisitions are inevitable," said Alessandra Fitzpatrick, Canalys director and senior analyst.

"Those that do not have good IP strategies in place, and focus too heavily on box shifting and too little on applications, will struggle."

Meanwhile, the report points to steady growth in the IP telephony market. Line shipments were up 55 per cent on the same period last year and accounted for one in eight of all enterprise telephony lines shipped in EMEA during the quarter, with Cisco leading the sector.