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Infonetics: VOIP Gear Sales Soar

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2/23/2005
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LONDON -- Worldwide service provider next gen voice product revenue totaled $1.71 billion in 2004, a healthy 36% gain over 2003, setting a new high, according to Infonetics Research's quarterly market share and forecast service, "Service Provider Next Gen Voice Equipment."

Infonetics projects revenue to reach $5.9 billion in 2008, a five-year CAGR of 36%.

"We're starting to see strong equipment sales translated into tangible services," said Infonetics Research's Kevin Mitchell, directing analyst and author of the report. "For instance, there were 1.1 million residential/SOHO voice over IP subscribers in North America in 2004--with almost half coming directly from MSOs--and we expect that number to soar to 17.4 million by 2008."

"North America was a hot spot in 2004 as carrier adoption moved into the big time, and we expect Europe to start taking shape this year," Mitchell continued. "As we move deeper into the 21st century, it becomes more apparent that IP networks are the next gen networks for all forms of communication. It's hard to find a carrier not modernizing their network with VoIP or planning to do so."

The question of why so many network operators are converging their fixed networks or contemplating it is being addressed today at the IEC 21st Century Communications World Forum in London, where Mitchell is participating in the "Making Convergence Pay: Results to Date and Future Prospects" panel. As more and more providers invest in convergence to increase profitability via reduced costs and revenue growth from new services, the VoIP equipment market will continue to take off.

4Q04 and 2004 Market Highlights

  • The media server and voice application server segments posted significant quarter-over-quarter gains
  • Class 5 softswitch revenue made up over half of all softswitch revenue in 2004
  • In a very fragmented market, Sonus is the worldwide media gateway market share leader with 16% share in 2004, and Cisco was second for the year
  • Nortel leads the softswitch market for 2004 and for both class 4 and class 5 applications
  • The 2004 geographic breakdown for total next gen voice products shifted to North America as many carriers in that region started serious deployments last year: 48% North America, 19% EMEA, 28% Asia Pacific, and 5% CALA


The Service Provider Next Gen Voice Equipment report tracks VoIP subscribers, media servers, session border controllers, media gateways (including RAC VoIP gateways, ATM switch voice gateways, and packet voice gateways), voice application servers, softswitches, and class 5 packet switches. Forecasts are updated quarterly and cover all regions (worldwide, North America, EMEA, Asia Pacific, and CALA).

Companies tracked in this service include Acme Packet, Alcatel, AudioCodes, BayPackets, Broadsoft, CIRPACK, Cisco, Convedia, CopperCom, Ericsson, Huawei, IP Unity, Italtel, Jasomi, Kagoor, LongBoard, Lucent, Marconi, MetaSwitch, Mera, Netrake, NexTone, Nortel, Pactolus, Sansay, sentitO, Siemens, Sonus, Sylantro, Tekelec, Ubiquity, UTStarcom, Veraz, Xener, and others.

Infonetics Research Inc.
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