This article originally appeared in the Sept. 2011 issue of INTERNET TELEPHONY
SIP trunking has made some great strides in recent years, enabling service providers to cost effectively introduce VoIP services to business customers. It started with a proof-of-concept phase that quickly transitioned to a phase where vendor and standardization efforts combined to ensure device interoperability that helped the market for service provider-offered SIP trunking services expand.
According to a recent Infonetics (News - Alert) Research report, SIP trunking services took off in calendar year 2010, with a 143 percent worldwide revenue increase driven predominantly from activity in North America, ending up for the year at $599 million. But the good news doesn’t stop here. Infonetics Research (News - Alert) forecasts a 68 percent compound annual growth rate for worldwide SIP trunking revenues, reaching $5.6 billion in 2015! And even though North America represents 62 percent of the total trunks in service currently, the market demand in EMEA and APAC will start to catch up very quickly.
To achieve this kind of hockey stick growth, SIP trunking will begin to replace PSTN connectivity at an even faster rate than we have seen. The switchover from PSTN to IP endpoints is reaching a transition point where PSTN connectivity is no longer economically feasible for any business. As a result, end-to-end IP communications will become the norm and enable much more than just voice services. These market dynamics will change how businesses communicate, ushering in a new phase for IP communications and SIP trunking.
In this bi-monthly column going forward, I will first take a look at what it takes for service providers and businesses to reduce costs and improve time-to-market for configuration of SIP trunking services. For service providers it boils down to meeting the demand with fewer SIP trunk configuration tweaks, enabling faster time-to-trunk provisioning without sacrificing secure and reliable communications. For business customers it also means a simplified configuration process, especially as businesses of all sizes start to deploy premises-based SBCs to handle an increase in IP communication traffic volumes. As with service providers though, businesses put secure and reliable communications at the top of their lists, since it is not acceptable for them to trade off lower connectivity costs with a downgrade in security or degradation in quality of service.
Subsequent column articles will address topics that go beyond basic SIP trunking services. To avoid commoditization of the basic services, service providers will continue to look for ways to enhance their SIP trunking service revenues with add-on services. This will involve enabling secure, interoperable, and reliable IP communication services with HD voice, video, and collaboration capabilities, allowing service providers to build incremental revenue streams on top of their existing SIP trunking networks. These services could include HD audio and video conferencing, unified communications, voice recording, or the brokering of any of these services between businesses to establish a broader IP communication B-to-B connectivity model for greater market reach.
For businesses, going beyond basic SIP trunking services means reaching out to other businesses with these new multimedia IP communication services over their SIP trunks, even if the two businesses are communicating through SIP trunks provisioned by different service providers. Just as mobile operators allowed voice and data services to work across different mobile operator networks, IP communications will eventually federate to achieve secure and interoperable B-to-B business communications across different service providers offering SIP trunking services.
So for SIP trunking to achieve its market potential, many different aspects of this technology will evolve to accelerate deployment and enhance service capabilities. Just as basic SIP trunking went through an interoperability shake-out phase, add-on SIP trunk services will go through a similar gestation period. But this time, with a lot of experience under our collective belts, we will be better prepared to work through the issues that result in faster market adoption.
Ken Osowski (News - Alert) is director of service provider product marketing at Acme Packet (www.acmepacket.com ).
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Edited by Stefania Viscusi