CANADIAN PBX/KTS
MARKET REPORT

2000 EDITION

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August 2000

Until 1999, NBI had published separate reports for the KTS and PBX markets. This is the second edition in which both sectors have been combined to present the information in a comprehensive manner and to reflect crossover in market segmentation and the blurring of the distinction between traditional PBX and Key systems. Increasingly, systems are configured according to customer requirements, either as a hybrid-KTS or PBX. 

Further, this area is undergoing a major redefinition, with the emergence of IP-based telephony and wireless PBX solutions. In this report, other than what is mentioned in the executive summary, there is no specific distinction being made between the volume of traditional KTS/PBX system and station shipments and the volume of these new IP or wireless-based options shipped to date. However, it is anticipated that this situation will change in future reports, as the growth in IP and wireless-based systems/stations will certainly increase and begin to displace the shipment of more traditional KTS/PBX products. 

In this report, NBI presents detailed quantitative information on Lucent, Mitel, NEC, Nitsuko, Nortel, Panasonic, Toshiba and Siemens/Rolm. These are the major manufacturers of the KTS and PBX equipment sold in Canada, either directly, by the telcos or through interconnect companies. In addition, NBI is profiling two new entrants that have emerged more recently, as both Cisco Systems and 3Com have entered the CPE voice world with the introduction of their own versions of "Un-PBX" communications systems. 

The realignment among the members of the former Stentor alliance also changed the way in which information on the telcos is herein presented. The late-1998 merger of BC Telecom and Telus, as well as the 1999 combination of the four Atlantic telcos, under the Aliant banner, have resulted in the recasting of their historical views to match their current realities. In the case of Telus Communications, results are presented for both British Columbia and Alberta, in addition to a corporate perspective (similarly for Bell Canada). For Aliant, the past results of MT&T, NBTel, Island Tel and NewTel have been merged to reflect the joint KTS/PBX marketing initiatives in that region. 

In previous editions of the KTS report, NBI had profiled close to two dozen interconnect companies. For the sake of clarity, manageability and expediency, this report focuses on eleven (11) major PBX distributors and dealers from across Canada. Data on their KTS business is also presented for the information of the reader. 

This report, together with others on the voice mail/messaging, ACD, videoconferencing, and CTI markets, comprises the cornerstone of NBI's research on the Canadian CPE market. As with all NBI reports, information is gathered from primary sources and, specifically for this document, from manufacturers, telephone companies and interconnects. 

The report is divided into six sections. Sections 1, 3 and 5 examine each of the major players individually, including data on station and system shipments, segmentation by new and add-on stations, system size, vertical market and provincial distribution and installed base estimates. It should be noted that this is the first time in which the proportion of new vs. add-on KTS stations is being presented as part of these company profiles. To properly reflect the estimated split between new and add-on KTS stations, minor revisions were made to the 1998 estimates reported in the 1999 Canadian KTS/PBX Market Database Report. Sections 2, 4, and 6 contain quantitative analyses along similar dimensions that summarize each of the three categories of market participants. 

It should be noted that the manufacturers' shipments do not equal the sum of the telco, interconnect and direct shipments due to the following reasons: 1. There are many more interconnects in the industry than profiled in this report; 2. Possible timing disparity between manufacturer shipments and distributor installations likely exists; and 3. The existence of a grey market. 

Revenues reported at end user levels represent proceeds from the sale of KTS and PBX equipment only. They exclude applications, moves, adds, changes and maintenance. For more information on the Canadian CPE market, please refer to NBI's reports on voice mail/messaging, ACD, videoconferencing, and CTI.