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Carrier contracts drive VoIP equipment market

Anxious service providers are currently building voice-over-IP (VoIP) networks and creating a tremendous opportunity for those involved in that industry, according to a new report from Allied Business...


January 1, 2000  


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Anxious service providers are currently building voice-over-IP (VoIP) networks and creating a tremendous opportunity for those involved in that industry, according to a new report from Allied Business Intelligence (ABI), Oyster Bay, NY.

The report — Voice-Over-IP (VoIP) Equipment Markets: Gateways and Gatekeepers, 1998-2004 — says that the total world market for VoIP equipment (gateways and gatekeepers) will rise from US$163 million in 1998 to US$3.1 billion in 2004. This represents a compound average annual growth rate of 63 per cent over the six-year period.

ABI, which publishes research on such industries as broadband, wireless and electronics, says the service providers drive much of this growth. After several years of “tire-kicking”, ABI says service providers let loose a burst of contracts in 1999 for deployment of commercial networks. This service expansion became earnest in the latter half of 1999 and will continue into early 2000.

The research firm also predicts that this surge will be augmented by other service providers as the technology is proven further.

The report points out that in addition to offering lower priced calls, a new VoIP network can cost less than a new circuit-switched network, and will make it easier for competitive carriers to enter previously regulated telephony markets.

The enterprise market is also developing, but will grow at a slower pace, says the company. This is partly due to the ability of large corporations to negotiate low long-distance fees. In addition, many businesses are reluctant to place voice calls on data networks, due to a perceived lack of reliability of these networks.


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