Cloud telephony is a type of service through which voice and data services can be operated using an Internet connection instead of a traditional phone line. Cloud telephony services offer improved scalability to companies as they enable them to add more channels over their existing trunks. They work on VoIP phone systems (Voice over Internet Protocol) and Public Switched Telephone Networks (PSTNs). Cloud telephony services can work without a physical connection to a phone company as they operate virtually.
The global cloud telephony services market is primarily driven by migration of telecom companies from traditional to IP networks. This migration is due to higher return on investment (ROI) and control capabilities of cloud telephony services. In addition, cloud telephony services have evolved as a cost-effective alternative to traditional telephony systems including PSTN and ISDN. The cost of installing multiple lines for traditional telephone and Internet services is reduced because voice and data are transferred over a single Internet line.
Furthermore, increasing competition in the cloud telephony services market has influenced vendors to offer competitive pricing and additional features with their services to attract customers. Also, cloud telephony services offer greater scalability to business organizations to add further channels over their existing trunks. It also offers flexibility to customers by providing localized contact numbers irrespective of their geographical location. This enables organizations to create their virtual presence in different regions. Furthermore, it enables organizations to add new users over the existing infrastructure.
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However, interoperability and security concerns are some of the major issues faced by cloud telephony services. Interoperability problems between vendors providing edge devices, service providers, and IP-PBX might pose challenges for the smooth functionality of SIP trunk calls, which is a part of cloud telephony services. Data breach is an important consideration for organizations due to the increasing number of cyberattacks in recent years. As voice data is transmitted over Internet lines, cloud telephony services encounter security threats and are vulnerable to cyberattacks.
North America was a dominant region of the cloud telephony services market in 2017. The region accounted for more than half of the global market revenue share, and it is expected to continue its leading position throughout the forecast period. This is due to the presence of tech-savvy gadget users and rise in demand for advanced communication services.