2013 FROST & SULLIVAN AUSTRALIAHOSTED CONTACT CENTERSERVICE PROVIDER OF THE YEAR

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research, Frost & Sullivan is proud to present the

award for 2013 Frost & Sullivan Australia Data

Communications Service Provider of the Year to

Telstra Corporation Limited (known as Telstra).

Australia Hosted Contact CenterService Provider of The Year

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2013 FROST & SULLIVAN AUSTRALIAHOSTED CONTACT CENTERSERVICE PROVIDER OF THE YEAR

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For the hosted contact centre service provider of the year award, the following criteria were used to benchmark Telstra’s performance against key competitors:

• Growth in revenue and market share terms• Scalability and key customer wins• Vendor par tnerships

KEYBENCHMARKINGCRITERIAFOR THE HOSTEDCONTACT CENTRESERVICE PROVIDEROF THE YEAR AWARD

The hosted contact centre market has been experiencing double digit growth in the Australian market, as organisations look for greater �exibility with their contact centre solutions. The on-premise model is the predominant deployment model for contact centre solutions in Australia, and is expected to remain so for the next few years.

However, as organisations demand greater �exibility and look to reduce their maintenance overheads, the hosted model is becoming an attractive alternative.

Over the next 2 to 3 years, as the hosted model matures it will drive greater business understanding thus leading to increased uptake. The hosted contact centre model has established itself as the preferred option for organisations looking to move away from the on-premise model.

Many organisations remain concerned about moving to a fully cloud based contact centre model due to concerns around reliability, security and availability. Being a dedicated infrastructure, most of these concerns are mitigated by a hosted contact centre model. As a result, organisations are beginning to adopt hosted contact centre solutions before moving to a fully cloud based model.

The hosted contact centre market in Australia grew by 14.9% in 2012, re�ecting the demand in the market. Australia is one of the most advanced market segments in the APAC region, accounting for over 40% of revenues. As a result, establishing a foothold in the Australian market will be the focus for vendors and service providers offering hosted contact centre solutions.

The utility based model allows customers to only pay for ser vices used and also to rapidly scale up or down depending on requirements. Telstra also offers additional payment options such as pay by seat, by minute or per call.

AUSTRALIAN CONTACT CENTRE MARKET OVERVIEW

SIGNIFICANCEOF THE AWARD

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Greater competition expected in a consolidated marketWhile the contact centre applications market is fair ly competitive, the hosted contact centre market is highly consolidated with the top three players accounting for almost 90% of the market. Organisations looking to adopt a hosted contact centre solution have a relatively smaller choice compared to on premise solutions. The established providers have secured a strong position in the market thereby raising competitive barrier for new entrants.

This situation in the market is expected to change, with a number of existing ser vice providers strengthening their capabilities through product improvements and par tnerships with technology vendors. For instance, major channel par tners are looking to par tner with Cisco to offer contact centre solution through Cisco’s Hosted Collaboration Solution (HCS).

As a result of such par tnerships, a number of ser vice providers will improve their position in the hosted contact centre market, fur ther challenging the dominance of established vendors.

Telcos hold an advantageous positionAs the market shifts towards a third par ty hosted and delivered model, telcos are positioned favourably to bene�t from the demand. The ability to combine carriage with application deliver y will be a major advantage for telcos over their competitors. In addition, most telcos typically own the data centre infrastructure, enabling them to optimise customer experience over their network.

In addition, major telcos also have strong services capabilities covering Uni�ed Communications (UC) and contact centres. For instance, managed services are becoming a key segment for telcos for driving growth in their ser vices por tfolios. The ability to offer managed services will be crucial in addressing the concerns of organisations lookinzg to retain the application on premise while handing over maintenance and suppor t to a third par ty.

Major telcos in Australia have developed par ticular ly strong capabilities around managed services and are well positioned to offer bundled solutions for on premise and hosted environments.

High speed internet access to boost further adoptionFinally, the factor expected to have the most impact on the adoption and future shape of hosted and cloud based contact centres is faster internet speeds and availability of bandwidth. Currently the cost of bandwidth provisioning and internet speeds are major hurdles for the adoption of cloud based solutions such as Uni�ed Communications (UC) and contact centres.

Infrastructure developments such as the National Broadband Network (NBN) will make high speed internet access available to businesses in most par ts of the countr y. In addition, the deployment time frame for such high speed internet initiatives coincides with the maturity of cloud based deliver y models. This combination of factors will be a key enabler for widespread uptake of cloud based solutions in Australia.

KEY TRENDS IN THE AUSTRALIAN HOSTED CONTACT CENTRE MARKET

The following are some of the key trends in the Australian hosted contact centre market:

Factor 1: Growth and Market Penetration

In 2012, Telstra recorded double digit growth in the hosted contact centre market in Australia despite holding the majority market share. Telstra continues to leverage its exper tise as a carrier to integrate contact centre solutions with its network capabilities. As a result, the company has established a signi�cant lead over its competitors.

Despite holding the market leader position, Telstra continues to grow both in revenue and market share terms. Telstra’s effor ts in driving market understanding of hosted contact centre solutions combined with its strong brand awareness in the Australian market saw its market share soaring up to 70% in 2012.

Telstra estimated to services over 50,000 hosted seats in Australia, spread across its Web Contact Centre, Dialler-On Demand, TIPT ACD and Network Contact Centre por tfolios. Inbound, outbound and multimedia ser vices are the key components of Telstra’s hosted contact centre services.

Telstra addresses the hosted contact centre segment through its Network Applications Services (NAS) por tfolio. The NAS segment has been one of the fastest growing segments within Telstra in recent years. In addition, Telstra has also committed $800 million over �ve years towards strengthening its cloud computing capabilities. These were some of the key factors enabling Telstra to drive growth in the hosted contact centre market.

Factor 2: Scalability and key customer wins

Large companies, par ticular ly in the Banking, Financial Services and Insurance (BFSI) segment, were previously reluctant to adopt hosted solutions due to security and control concerns. Such concerns are being mitigated as bene�ts of the hosted model begin to outweigh concerns. Bene�ts such as cost advantages, �exibility and improved security are beginning to drive demand from a wide range of organisations.

Many organisations in the large enterprise segment including BFSI organizations are beginning to closely evaluate and deploy hosted contact centre solutions. Telstra’s extensive reach as a telco in the Australian market also gives it a strong presence across major ver tical markets such as government, BFSI, professional ser vices, retail and utilities.

The Depar tment of Human Services (DHS), which includes Centrelink, Medicare and Child Suppor t Services, was one of the largest customer wins for Telstra in 2012. The DHS awarded Telstra a multi-year Managed Telecommunications Service (MTS) contract that consolidates multiple technology services provider accounts to a single Telstra managed account. The deal covers a range of solutions including carriage, telephony, video conferencing, mobility, contact centres and data centres to be provided over a hosted model.

The organisation’s decision to adopt a hosted model for its technology infrastructure is re�ective of changing attitudes towards hosted solutions in Australia. Some of Telstra’s other key customer wins in the hosted contact centre market include Australia Post, Energex, Westpac, Energy Australia, Queensland Police and Red Energy.

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HOSTED CONTACT CENTRESERVICE PROVIDER YEARAWARD ANALYSIS FORTELSTRA

Factor 3: Vendor partnerships

Telstra’s strong vendor par tnerships across UC and contact centres are a key factor for its dominant position in the Australian market. Telstra’s hosted voice solutions (TIPT), which is based on the Broadsoft platform, is a key solution for addressing the growing demand for voice. TIPT continues to experience high double digit growth, driven by strong demand from the SMB segment. Telstra also bene�ts from conver ting its TIPT customer base to basic contact centre solutions through its TIPT ACD por tfolio.

Telstra’s strong par tnership with Genesys has enabled it to build its hosted contact centre platform based on Genesys’ solutions. Workload management solutions such as Genesys’ Intelligent Workload Distribution (iWD) are currently helping uptake of Telstra’s hosted offering among its existing base of on-premise customers paving migration to hosted model. Genesys’ ability to address large scale requirements makes it a core component of Telstra’s strategy for addressing the contact centre demands of large enterprises.

Telstra’s expanding footprint in the fast growing SMB segment will be a major advantage as demand materialises. Telstra anticipates its overall ser vices revenues will shift in favour of hosted and cloud based solutions as demand gathers momentum. In 2012, Telstra Global announced par tnership with IPscape to offer Vir tual Contact Centre (VCC) in key markets in APAC. Although the solution is currently not available in Australia, it gives Telstra a viable model to replicate when the demand for cloud contact centres materialises.

In ear ly 2013, Telstra announced the availability of its cloud collaboration solutions based on Cisco’s Hosted Collaboration Solutions (HCS) platform. The platform will enable Telstra to extend its UC and contact centre por tfolio beyond the SMB segment to the large enterprises

CONCLUSIONTelstra has established itself as a major player in the contact centre services segment in Australia. Its recent acquisition of contact centre systems integrator NSC fur ther strengthens its ability to provide a wide range of contact centre services. Telstra has also identi�ed the hosted UC and contact centre segments as the key focus areas for driving future growth. Its investments in cloud infrastructure will fur ther extend its reach and ability to deliver hosted solutions in Australia. Overall, Telstra is well positioned to capitalise on its dominant position in the hosted contact centre market in Australia.

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BEST PRACTICESAWARD ANALYSIS

2013 FROST & SULLIVAN AUSTRALIAHOSTED CONTACT CENTERSERVICE PROVIDEROF THE YEAR