Report: VoIP Market on The Upswing

Sales of next-generation voice and IP systems are sizzling, following a lackluster first quarter.

By Tim Scannell | Posted Sep 6, 2006
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Voice over IP service providers have something more to remind them of summer than sand in their pockets: Increased revenues and a strong demand for next-generation voice services.

Revenues generated by next-generation voice and intelligent IP multimedia subsystem (IMS) equipment is expected to double through 2009, rising from roughly $2.5 billion last year to $5.8 billion, according to the latest Infonetics Research report.

Overall, the IP voice market is up about 6 percent in the second quarter of 2006, recovering from a similar decline in the first quarter of the year before, noted Infonetics.

Shipments of IP telephones are also on the upswing, increasing about 17 percent in Q2, or roughly 2.1 million shipments, noted the report.

Infonetics said in an earlier report that about $120 billion will be spent on VoIP services in North America, Europe and Asia over the next few years.

Roughly half of the revenues flowing from North America will come from residential customers.

The surge in IP telephony demand from both consumers and business users is music to the ears of companies such Cisco Systems and Nortel Networks, since they write the equipment tunes that make the whole industry sing.

Earlier this year, Cisco introduced a Unified Communications system and strategy that combines several products to deliver mixed and matched communications capabilities, including IP-based telephony.

The system is being used by C.J. Hughes Construction, a construction company in West Virginia, and JJ Food Service Ltd., based in the U.K.

Nortel's joint venture, LG Nortel, last month unveiled an intelligent communications system that targets small-to-medium businesses (SMBs) and supports a variety of analog and digital communications architectures.

The ARIA SOHO also offers a number of cost control and call monitoring features to keep tabs on digital dealings, according to Nortel statements.

The number of residential and SOHO VoIP subscribers worldwide is expected to nearly double by the end of this year to over 47 million subscribers, said the recent Infonetics report.

The top-three VoIP drivers from a carrier perspective are new services, capital expenditure savings and operational expenditure savings.

The carrot of providing new services to subscribers, like wireless VoIP, is a strong motivator for most broadband providers.

Toronto Hydro Telecom, for example, will soon launch a citywide Wi-Fi network in Toronto that will blanket 10 square kilometers of the city's downtown area with fiber-backed wireless access.

The project is being developed with BelAir Networks and will ultimately be the largest Wi-Fi zone in Canada, said David Park, vice president of product development at BelAir.

"It gives them a leg up in terms of the integration of HFC (hybrid fiber coaxial) to wireless gear, and an advantage in terms of rollout and types of services," he said.

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