Communications and Technology Industry Research

NexTone, a provider of session border controllers and scalable session management solutions for VoIP, multimedia, and IMS network interconnects, has announced the results of the study, VoIP Peering (News - Alert): State of the Market and Strategic Analysis of Customer Needs, produced by J Arnold & Associates and sponsored by NexTone.

The study is based on responses from NexTone’s carrier customers that have provided VoIP peering for as long as five years. These responses show that carriers believe they are just learning how to benefit from VoIP peering. Respondents also revealed what they value most in peering platforms.

Advances in peering platforms have made it easier to interconnect as the number of peering partner worldwide has grown. Call volumes have also grown accordingly. And, while some respondents peer only a portion of their traffic, others peer all of their traffic. Virtually all carriers surveyed plan to transition to IP more fully and add more IP peering services.

This research validates NexTone’s leading share of international VoIP peering traffic. By aggregating VoIP peering traffic volumes from individual customers, a determination was made for the total amount of traffic being handled by NexTone, in addition to the proportion that is international. Based on total market data from research firm, TeleGeography, the study estimated that NexTone has a 50.3 percent share of the market for international VoIP peering.

"The survey confirms that VoIP peering continues to grow as carriers expand their numbers of peering partners and look to offer new services," said John Longo, vice president of marketing at NexTone, in a Tuesday statement.

"The study deepens our insight into the market's direction and what carriers want in a VoIP platform. The findings will help guide the continued enhancements of our IntelliConnect platform to ensure our service provider customers get even more out of VoIP peering."

The study also shows that carriers are peering VoIP traffic to expand service coverage, gain competitive advantage and enter new markets far faster and more easily than with TDM. Carriers also appear to be migrating more traffic to IP due to its flexibility and efficiencies.

It is expected that certain carriers will build traffic volume through expansion into new markets, while others will use peering to support new services and enhanced applications. Still others will peer into new media, especially video. For those planning to offer a range of services across multiple networks, IMS and FMC roadmaps will be important.

Common themes that emerged as to what respondents value most in a VoIP peering solution include: platform reliability and stability; interoperability across many vendors; customer support across multiple dimensions; performance and capacity; flexible platforms for interoperability; platforms that allow carriers to enter new markets, develop new revenue streams quickly and enable new, higher-margin IP-based applications; a vendor with an excellent reputation; and a platform that is easy to manage and use.
   

"The value of VoIP peering has become recognized by carriers, and this is reflected not just in NexTone's rapidly growing customer base, but also in how volumes of VoIP peering traffic are increasing among their existing customers," said Jon Arnold, Principal of J Arnold & Associates, in Tuesday’s statement.

"NexTone's strong market position can in part be explained by how well they support their customers. On a strategic level, many of these customers feel that NexTone's vision of VoIP is aligned with theirs, which is important given the evolutionary nature of this
market."

There is a strong consensus in the industry that VoIP peering will continue to grow, with most of the opportunity still ahead. While carriers are expected to look to fill subscriber demand for enhanced applications that may provide better margins, it appears that they will not move away from voice. Instead, voice will become a foundation for a broader business focus while advanced applications may provide new real business value.

 

One of the key areas of the market that is driving VoIP adoption is that of the SMB segment. These smaller companies are growing in number and demanding the same functionality as that of their larger competitors. As these companies demand quality, while adhering to smaller budgets, VoIP is the perfect voice solution.

 

For carriers, peering is the perfect method for identifying opportunities. As competitive as the market is, customers are more responsive to companies that take a proactive approach to their needs, offering solutions that address common challenges before they become a problem. As this will help to drive demand, the need for solutions such as those offered by NexTone will continue to grow, ensuring stability for the company over the long term.

 

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