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Voice over broadband driving growth in VoIP equipment market: Mercator

An industry update on VoIP carrier equipment by Mercator Capital, a privately held investment bank, reveals that th...


December 24, 2004  


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An industry update on VoIP carrier equipment by Mercator Capital, a privately held investment bank, reveals that the main driving force behind the present growth in VoIP is Voice over Broadband (VoB).

According to the report, 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 in Q3 2004 was US$169 million.

Carrier IP Centrex equipment generated US$7.7 million in revenues. The Session Border Controller segment generated US$15.5 million, while the Media Server segment generated US$12.5 million.

“VoB appears to be the main market driver for VoIP in the immediate future," said Rod Hackman, a Mercator partner. “This will in turn drive business for several VoIP equipment segments.

"As VoB offerings proliferate, Softswitch and IP Centrex vendors will be providing the voice feature set, Session Border Controllers will address the inherent security risks, and Media Servers will be the hardware on which enhanced applications are deployed.

"The need to interconnect with PSTN (since IP-to-IP calls in VoB offerings are a very small portion as compared to IP-to-PSTN calls) will drive the demand for Media Gateways.”

Within the Softswitch segment, the report provides a breakdown into Class 5 and Class 4 lines shipped during Q3 2004. Nortel and Sonus dominate the Class 4 market. Nortel and UTStarcom were the leaders in Class 5 business in Q3.

The leaders in the Media Gateway segment were Nortel, UTStarcom, Cisco, and Sonus.