IT-Review

Voice over Broadband Driving Growth in VoIP Equipment Market

An industry update on VoIP carrier equipment published by Mercator Capital suggests that Voice over Broadband is the main driving force behind the present growth in VoIP market. Many VoIP equipment vendors stand to gain from the proliferation of VoB in countries where mature broadband markets already exist.

Based on a survey of 30 vendors, Mercator Capital established market revenues and line shipments in VoIP equipment segments including Softswitch, IP Centrex, Session Border Controller, and Media Servers.

The combined contribution made by Class 5 lines, Class 4 lines and Media Gateways (i.e. the Softswitch solution) in third quarter 2004 was $169 million. Once relegated to deployments in long distance networks, Softswitches have made a major impact at the edge. Mercator Capital attributes this to the VoB phenomenon. As a result, Softswitches continue to account for the majority of revenue for the VoIP carrier equipment industry. Revenue from VoIP equipment that enables enhanced applications (and contribution from other allied equipment sectors in VoIP such as Session Border Controllers) continues to be modest in comparison to the Softswitch.

According to the report, in Q3 2004, Carrier IP Centrex equipment generated $7.7 million in revenues. The Session Border Controller segment generated $15.5 million, while the Media Server segment generated $12.5 million.

The research report is the first of its kind addressing and tracking segments outside of the Softswitch in the VoIP market. Within the Softswitch segment, the Mercator report also provides a breakdown into Class 5 and Class 4 lines shipped during Q3 2004. Nortel (NYSE:NT) and Sonus (Nasdaq:SONS) dominate the Class 4 market. Nortel and UTStarcom (Nasdaq:UTSI) were the leaders in Class 5 business in Q3. The leaders in the Media Gateway segment were Nortel, UTStarcom, Cisco (Nasdaq:CSCO), and Sonus.

Source: press release

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