VOIP Article, good for us
Voice over IP Grows Louder
Next-Gen Voice Equipment Sales hit $2.5B Worldwide
by Ouida Taaffe
Wed, February 22. 2006
The market for next-generation voice equipment was worth US$2.5 bn in 2005, according to new research from Infonetics. This number represents a 50 per cent hike on 2004 revenues. Infonetics expects that growth in the segment will continue, with global next-generation voice revenues set to hit US$6.2 bn in 2009.
The main driver of demand for next generation equipment, according to Stéphane Téral, an analyst with Infonetics, is increasing broadband penetration. “Broadband has now reached critical mass, so it makes sense to add a voice component to it,” says Téral. “This high broadband penetration comes from successful LLU implementation. Cable MSOs in North America and a flurry of attackers around the world are offering VoIP over broadband, and are cutting deep into traditional telcos’ bottom line. Net result: telcos are fighting back with their own VoIP offering over DSL, which, in turn, requires a migration plan from TDM to IP network.”
What do the actual subscriber numbers look like? According to Infonetics, there were, in 2005, 14.2 million residential and SOHO VoIP subscribers in Asia Pacific, a number that is set to reach 49.9 million in 2009. The second-largest regional base, EMEA, had 5.4 million subscribers in 2005 - and will draw close to Asia Pacific by 2009 with around 42.5 million subscribers. In North America, growth will be even more marked – going from 4.3 million in 2005 to around 39 million in 2009.
Téral notes that the increases in subscriber numbers in each region more or less matched upticks in sales of equipment. “North America used to lead,” says Téral, “but in 2005, Asia Pacific and Europe caught up nicely.”
Which vendors are benefiting from the spending spree? Nortel led in terms of unit shipments in the ‘combination media gateway/softswitch’ market, with Siemens in second and Huawei third, according to Infonetics findings. How the revenue pie was shared out Infonetics did not disclose. In terms of softswitch shipments, Huawei was the top dog with 26 per cent market share in 2005.
It will take some time for service providers to fully replace their class 5 switches with softswitches, Téral believes. “PSTN migration is a grand plan,” says Téral. “It’s a long term process that will take at least a decade – by this I mean ‘mission accomplished’, when PSTN is totally shut down. BT is trying to do it faster, which makes sense, as they don’t have to worry about any mobile networks. But think about those across the Channel that are vertically integrated. They all have a plan, but implementation will take a while.”
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