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VoIP Feature Article

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February 22, 2006

VoIP Market Booms in 2005 with Tremendous Growth Expected by 2009

Susan J. Campbell, TMCnet Contributing Editor


TMCnet Communications and Broadband Columnist
 
The next generation voice equipment revenue topped $2.5 billion, a 50 percent jump over 2004, with a projected increase to 145 percent or $6.2 billion by 2009 according to the Service Provider Next Gen Voice and IMS Equipment report from Infonetics Research.
 
Residential and SOHO (small office, home office) VoIP subscribers continue to grow around the world including:
 
·   Subscribers in the Asia Pacific region grew to 14.2 million with projected growth to reach 49.9 million by 2009/
·   5.4 million subscribers in EMEA with 42.5 million users projected by 2009.
·   North America with 4.3 million subscribers and the largest anticipated growth of 800 percent to almost 39.0 million in 2009.
 
Stéphane Téral, directing analyst at Infonetics Research noted that 2005 was a watershed year for next generation voice, with VoIP subscriber uptake moving at a torrid pace and numerous incumbents around the globe committing to long-term migration projects that will lead to increased legacy switch removal and more next generation voice equipment deployments.
 
Other highlights from the Infonetics Research Report include:
 
·   Between 2005 and 2009, a total of $21 billion will be spent on next gen voice equipment around the world.
·   Global next gen voice equipment revenue was up 21 percent for the quarter, growing to $785.3 million in 4Q05.
·   Trunk media gateway revenue was up 39 percent to $375.2 million and softswitch revenue was up 6 percent to $321.1 million between 3Q05 and 4Q05.
·   In 2005, Nortel continued to lead in the combination media gateway/softswitch market, Siemens maintained second place with Huawei in third.
·   Softswitch license shipments for Huawei ranked first for the quarter and 2005 calendar year with 26 percent market share worldwide.
 
This latest release from Infonetics Research is in line with forecasts determined by other research firms for the VoIP market. In December, In-Stat produced a report on the global VoIP market. In its findings, In-Stat noted that VoIP continues an impressive 62 percent year-over-year subscriber growth rate with factors such as broadband competition and regulatory policy as the primary market drivers. In-Stat predicts that by 2009, VoIP subscribers worldwide will number 55 million, generating over $17 billion in annual revenue.
 
ABI Research completed its VoIP study the summer of 2005 and also concluded that the VoIP market is a dynamic market in terms of relative growth. The report did indicate, however, that compared to the numbers of conventional fixed and mobile phone customers, VoIP services worldwide would remain small, even by 2010.
 
The VoIP market is still one to watch as the ability to consolidate things like email, voicemail, telephone and Outlook calendar, to name a few. This ability is a big draw for consumers, whether an individual, small company or large enterprise.
 
The anticipated growth in the VoIP market is expected to fluctuate depending upon location. North America is predicted to produce the largest growth by 2009. To date, the largest residential deployment has been in Japan by Softbank BB, a broadband provider that leveraged an existing DSL network and added VoIP to its data services. This practice is expected to continue in North America due to the dominance of cable broadband.
 
The resulting battle may end up being between hosted VoIP companies and the cable companies. VoIP companies may be able to offer more specialized services, but the cable companies have the advantage of the existing customer base. With such anticipated growth and potential revenue from this small portion of the industry, the battle most likely will be fierce and as is especially true in the telecommunications world – only the strong will survive.
 
Susan J. Campbell is a contributing editor for TMC and has also written for eastbiz.com. To see more of her articles, please visit Susan J. Campbell’s columnist page.
 

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