BETHESDA, Md. -- According to DITTBERNER's Worldwide YE 2005 NGN and Digital Switching Markets Analysis, for the first time in history, NGN VoIP port shipments exceeded that of digital switching in 2005. While the digital switching market experienced a drop of almost 30% in terms of ports shipped in 2005, the NGN VoIP market saw a strong growth of over 151%.

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Justifying the investment shift, Lilian Tau, Vice President at Dittberner stated that “there are three major countries in the world where fixed line telephony has enormous potential - China, India and Russia. Two of them, China and Russia have decided to dramatically cut investments in digital switching and start NGN migration”. He added that “all major operators in China such as China Telecom, China Netcom, and China Unicom initiated aggressive NGN replacement projects at both local and long distance level networks. In Russia, Svyazinvest has put fixed-line expansion projects based on digital switching on hold and is currently investigating NGN related alternative solutions. In addition, the privatization of Svyazinvest expected to take place later in 2006 will encourage capital markets to fund increased capex, thus unlocking growth opportunities in Russia”. Mr. Tau concluded that “mobile is meeting India’s and Russia’s immediate needs for telephone service, but ultimately it cannot serve as a replacement for fixed lines. Going forward, business and consumer demand for broadband and increased data traffic will drive demand for fixed lines in both countries”.

The study also reveals that operators worldwide are increasingly looking to replace and/or upgrade their PSTN infrastructure with a softswitch solution that provides a single platform to deliver the IP-based multimedia services of the future as well as all the necessary telephony services from the circuit-switched world. The operators want to start implementing and building a customer base for new IP-based multimedia services as soon as possible.

Dittberner Associates Inc.