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The carrier IP telephony market was down two percent overall during the third quarter as compared to the same period last year, according to a new report from the Dell’ (News - Alert)Oro Group. However, the situation isn’t as clear cut as it would at first seem since sales of IP multimedia subsystem (IMS) core, session border controller (SBC) and voice application server (VAS) systems grew 55 percent, almost managing to offset declines in the mature softswitch and media gateway segments.

Oddly enough, this performance closely mirrors the findings of another recently released Dell’Oro Group report on the radio access network (RAN) market. This space too was down overall during the third quarter of 2013 compared to Q3 of 2012 due to declining RAN technologies GSM, WCDMA and CDMA. However, LTE RAN growth was so strong it almost offset the decline of those other RAN technologies.

As for the carrier IP telephony market — which includes devices used to serve circuit switched subscribers, VoIP and VoLTE (voice over LTE) subscribers — it managed a total of $1.6 billion in revenue during the third quarter. GENBAND (News - Alert) was among the top performers in the space during Q3, gaining close to 10 percent share in the fast growing SBC space compared to the prior quarter.

According to Dell’Oro, demand for IMS, SBC and VAS can largely be traced back to VoLTE and network function virtualization (NFV). Indeed, Infonetics Research (News - Alert) also recently stated that SBCs will play a strong role in virtualized environments going forward.

“Wireless voice and messaging infrastructure upgrades are emerging as a catalyst to transform service provider core networks towards a data-center-oriented architecture.  There are a significant number of technology trials underway at leading operators today that are utilizing software-only Network Function Virtualization instances of what today are delivered on hardware-dependent systems,” said Chris DePuy, vice president of Carrier IP Telephony research at Dell’Oro Group, in a statement.  “We expect significant changes in shipment patterns, purchasing trends and supplier relationships as operators transition to more cloud-server and virtual machine-based core infrastructures.”