This article originally appeared in the October 2010 issue of INTERNET TELEPHONY
For all of the less than uplifting stuff we’ve been hearing about employment, the stock market and the housing space, there is plenty happening on the up side.
That includes good news for telecom services in the third quarter, strong demand for key IP gear, an uptick in major tech M&A action, and at least a couple of promising developments out of Washington, D.C. I might also add that barely a week passes until I hear from another company that tells me how, despite the economy, it’s been able to not only survive, but to thrive.
Nightly Business Report in late August noted that in the third quarter telecom services was the winning sector, up more than 10 percent, far outperforming the S&P 500, which was up less than 2 percent.
As for the demand for IP gear, a new study from Infonetics Research (News - Alert) says demand for session border controller gear remains strong. The success of session border controllers resulted in the service provider VoIP equipment market (which also includes trunk media gateways, media servers, softswitches, and voice application servers) increasing to $564.7 million in the second quarter, up 5.3 percent from the previous quarter.
The IMS market also is seeing healthy growth, driven by the adoption of fixed line VoIP services and key operators in Asia Pacific and EMEA that are embracing IMS, Infonetics says. Worldwide IMS spending increased 33.5 percent between the first and second quarters of this year."The session border controller market is on fire, with worldwide revenue up 27 percent sequentially and up 70 percent from this quarter last year, a signal that IP-to-IP connectivity continues to overtake IP-to-TDM connectivity,” says Diane Myers, directing analyst for service provider VoIP and IMS at the firm. “SBCs and media servers will be the main growth engines of the carrier VoIP equipment market for 2010.”Meanwhile, there has been plenty of high-profile mergers and acquisition activity in communications circles. That includes Intel’s (News - Alert) plans to buy security company McAfee and the wireless chip business of semiconductor company Infineon Technologies, and HP’s bid to capture 3Par Inc. (at least that’s how things stood at press time in early September).
Of course, consolidation can result in fewer competitors and choices for customers, and sometimes means higher prices. On the other hand, it can deliver economies of scale for the companies involved, and more complete solutions and robust suppliers for their customers. As I’ve noted before, M&A also indicates some level of optimism in the industry and of the business climate as a whole.
And while the federal government has not been able to deliver much good news in terms of the economy, there are a few potential bright spots out of Washington, D.C.
One is the fact that RUS and NTIA finally have doled out all the broadband stimulus awards (the deadline for doing so was Sept. 30). That means we should see hiring and spending start to pick up relative to these broadband builds in the next few months.
Elsewhere on the regulatory scene, the Obama administration reportedly is overhauling the rules for export of technology, which some folks see as a good thing considering the existing requirements are rather antiquated. The plan apparently involves the consolidation of some enforcement activities into a single agency and the development of a list of products that are restricted from export. The goal here is to make it easier for technology businesses to understand the rules and get answers to their questions about them, so they are not hamstrung from moving forward on export opportunities.
Here’s to keeping your glass at least half full!