Infonetics Research released its second quarter Service Provider VoIP Equipment and Subscribers and IMS Equipment and Subscribers market share and forecast reports and reports that session border controller (SBC) sales are responsible for growth in the VoIP equipment market.

According to the report, the service provider VoIP equipment market–which includes trunk media gateways, SBCs, media servers, softswitches, and voice application servers — increased to $564.7 million in 2Q2010, up 5.3 percent from the previous quarter. Everything but trunk media gateways grew sequentially in 2Q2010. The most interesting note, though, is that only SBCs grew year-over-year.

“The session border controller (SBC) market is on fire, with worldwide revenue up 27 percent sequentially and up 70 percent from this quarter last year, a signal that IP-to-IP connectivity continues to overtake IP-to-TDM connectivity. SBCs and media servers will be the main growth engines of the carrier VoIP equipment market for 2010,” predicted Diane Myers, directing analyst for service provider VoIP and IMS at Infonetics Research in the release.

These promising industry statistics are further proof that IP to IP communications is making strong gains against IP to TDM communications, reinforcing the fact that carriers and business alike are embracing the efficiencies, reliability, value and enhanced services that only IP to IP connectivity can bring. As IP to IP connectivity becomes more pervasive, users will benefit from the empowerment and enhancements that only this technology can offer, such as high definition (HD) voice, HD conferencing, mobile VoIP, mobile PBX, and presence.

“Demand for residential and business VoIP services continues to grow through the economic downturn because of the cost savings they provide. As a result, in 2008 the VoIP services market had healthy growth of 33% to $30.8 billion. For the first 3 months of 2009, service providers experienced an average of 40% to 50% year-over-year growth for IP Centrex, indicating the demand for outsourcing and managed solutions remains healthy. We expect hosted UC services to take off, with worldwide revenue doubling between 2009 and 2013, and we forecast SIP Trunking service revenue to hit an 89% compound annual growth rate from 2008 to 2013,” said Diane Myers, Directing Analyst, Service Provider VoIP and IMS, Infonetics Research.

Based on these promising industry statistics, SIP Trunking is well positioned for growth, but how can a service provider best position themselves to take advantage of this potentially lucrative market while minimizing the downside? Providers can easily enter the market by providing IP origination and termination services over fractional virtual lines, however, the provider also needs to be aware of the back office management of the service and be very concerned with mitigating his exposure to fraud and account delinquency. Today, most carriers collect the CDRs in a historical post-call manner then rate the CDRs to generate line item charges and then mediate all of the information into a customer bill. This process takes times, is highly susceptible to fraud, human error, capacity overruns, orphaned records, collection issues and bad debt — all issues that weigh heavily on the business and drive up administration overheads while reducing profitability.

Luckily there is a better way to manage SIP Trunking services and it is through the adoption of real-time authorization, rating, routing and billing technology. By operating the SIP Trunking service in real-time in the front-end and back-end of the network the service provider can reduce fraud, increase profitability and reduce administration overhead through real-time balance updating, up-to-the-second credit checks, multiple layers of call traffic authentication, sophisticated real-time rating and billing and granular routing. With the addition of real-time authentication, rating, routing and billing functionality, the service provider can offer prepaid/postpaid/limited credit and flat-rate billing programs to even the most credit-challenged customers with the security of knowing their exposure is capped. With real-time SIP Trunking the carrier will have greater peace of mind knowing that safeguards are in place, slow and uncollectible accounts are eliminated, a wider profile of customers can be serviced and the human resource burden has been significantly reduced through the latitude, flexibility and control that real-time services bring to the next-generation network.

Market research firm, In-Stat estimates the total number of mobile VoIP users will reach 288 million by the end of 2013. Of these, well over half will be associated with online mobile VoIP providers, under one-third will utilize mobile VoIP with 3G MVNOs or mobile operators, and 11% will be with WiMAX/LTE operators.

Recent research by In-Stat estimates that by 2013:

• Mobile VoIP applications will generate annual revenues of $35.2 billion

• While the EMEA region has more mobile VoIP related revenue currently, Asia Pacific will be the largest regional market in revenue terms

• Dual-mode handsets (Wi-Fi + Cellular) will be well over 400 million units shipped.

As many of the global cellular network operators loosen their grip on the “voice” side of their business and start to shift their attention towards data, the statistics quoted above clearly indicate an opportunity for alternative next-generation VoIP operators to capture smartphone subscribers. With the opportunity to offload some of the data traffic from the cellular network to home/business Wi-Fi networks, the cellular operators will be able to relieve network data congestion for high bandwidth services like video and navigation.

Mobile VoIP application quality continues to improve across all of the smartphone platforms, especially in the way they seamlessly integrate with the native phone’s contact management system and with their support for both inbound and outbound calling.

This recent research highlights the tremendous opportunities ahead for next-generation VoIP operators to help drive their revenues, diversify their revenue streams, and increase their customer loyalty/retention through such services as:

• Primary and secondary line services with class 5 calling features and the ability to record voicemail messages to a common message store to allow subscribers to centrally manage all of their telecommunication services and needs

• IP PBX services to allow companies to utilize mobile handsets to extend the footprint of their business phone network for extension to extension dialing, automated call distribution, and reservation/reservation-less conferencing

• Call Center remote agent routing to increase the pool of available operators without the need to physically or centrally house them, while also dramatically reducing termination costs.

A UK-based research group recently reported that the total number of mobile VoIP minutes will jump from 15 billion in 2010 to 470.6 billion by 2015, thanks to the proliferation of 3G and 4G networks. Juniper Research says the biggest boost will come from the U.S., which will account for 135 billion mobile VoIP minutes by 2015 and they forecast that there will be 100 million mobile VoIP users by 2012.

“There are several flavours of mobile VoIP,” says Anthony Cox, Senior Analyst at Juniper Research, noting that operators fear losing traffic to Wi-Fi networks most: “Wi-Fi mobile VoIP is potentially the most damaging of all VoIP traffic, as it bypasses the mobile networks altogether,” he says. “We forecast that mobile VoIP over Wi-Fi will cost operators $5 billion globally by 2015.” .

For next generation VoIP network operators these numbers represent a significant opportunity to capture the lucrative mobile smartphone subscriber through mobile VoIP Wi-Fi softphones and through mobile dialer/callback applications which are tightly integrated into the native dialer and contact management of the phone. Traditionally, third party VoIP operators targeted residential land line subscribers, businesses and travelers, however with the growing number of smartphone users worldwide and the computing power of today’s smartphones, their services can now focus on the fastest growing voice market, which is mobile. .

According to an article published by FierceVoIP, The FCC’s Local Telephone Competition report has announced some big news for the VoIP industry. IP communications is on the rise with 21 million end-users taking advantage of VoIP subscriptions from cable, traditional telcos or VoIP providers.

The report noted that there were 162 million wireline retail local telephone service connections as of the end of 2008. Of that figure, 141 million were traditional switched access lines while 21 million were VoIP subscribers, which represents a tremendous opportunity for line conversions for service providers who have upgraded to a next-generation VoIP network.

With the virtualization of computers and the availability of cloud computing resources across the globe, companies are finding that they no longer need to make enormous investments in infrastructure and software licensing in order to keep pace with the evolving market place. Today, companies can subscribe to advanced software and service offerings in such areas as customer relationship management (CRM), voice over IP (VoIP), Call Centers, and unified messaging, where they have access to the most advanced and up-to-date services and features on a monthly subscription basis, without the need to manage the technology themselves or make heavy financial investments that can adversely impact their cash flow and balance sheet.

Software-as-a-Service for VoIP is ideally suited for the small companies, new market entrants and entrepreneurs who want to deploy similar technology to the larger, more established providers but cannot afford the capital outlay for product licensing, infrastructure, and/or human resources. Software-as-a-Service offers many competitive advantages for the provider primarily allowing them to focus on their marketing and revenue streams, while having the peace of mind that the infrastructure is always current and operational.

For those just starting out in VoIP and looking to develop local or remote markets, SaaS plays an invaluable role as it lets the service provider step out further with their marketing initiatives instead of tying up scarce and valuable capital building an infrastructure around a business that may or may not be successful. In the short term, SaaS lets providers enter a marketplace and test the viability of a business plan without over commitment and with a better chance of success through the preservation of working capital.

Verizon’s Global Wholesale VoIP service, with a base of more than 700 wholesale VoIP customers, experienced 200% growth in 2009, compared with the previous year. “Since we launched our VoIP portfolio 10 years ago, we’ve seen steady growth reflecting customer desire for reliable, cost-effective IP voice services,” said Mike Millegan, president of Verizon Global Wholesale. “And, as this market grows, we continue to add new VoIP services while enhancing our existing portfolio.”

In addition Verizon’s Wireless division might be the first major U.S. telecom provider to shift all of its users from legacy voice to VoIP by 2012, at least for its LTE network. “By 2012 the voice we sell on LTE will be VoIP,” Lowell McAdam, Verizon Wireless CEO.

As we mentioned back in January when AT&T asked the FCC to set a firm deadline for a complete move to an all IP network and an end to the PSTN, the move to an all IP communications network has always been a question of “when” and not “if”. With Verizon’s VoIP network growth, their near-term plans, and with SIP trunking expected to grow at 89 percent cumulative average growth rate between now and 2013 according to Diane Myers, Infonetics directing analyst, the move appears to be in full swing.

How do you as a service provider achieve competitive advantage and success in today’s challenging marketplace? How do you reduce your operational costs while driving higher demand services to your network? How do you reduce churn, instill loyalty and increase your subscriber base?

Today’s highly competitive landscape with razor thin profit margins makes it imperative that service providers like you create service offerings with your subscriber in mind in order to foster loyalty and grow your customer base. In addition, service offerings need to be in-demand and differentiated enough to ensure competitive advantage, and operational costs must be effectively managed and controlled in order to ensure the survival of your business.

Please join IVR Technologies’ Barry Sher and Randall Walrond on this webinar as they provide a comprehensive and in-depth presentation on market trends and opportunities, driving revenue to the network, building customer loyalty, prudent fiscal management, and potential areas of concern for the next-generation network.

If you are a traditional carrier migrating to VoIP, a new or existing next-generation service provider or someone considering investing in this market, this will be a presentation you cannot afford to miss.

• How to drive revenue through value added services.
• How to increase profit margins by migrating away from
  origination and termination services.
• How to capture your share of the lucrative and fast growing
  desktop and mobile (Smartphone) markets.
• How to reduce operational costs by consolidating the network, leveraging VoIP technology, implementing real-time billing and flattening your network architecture.
• How to leverage the web and bundle services to build your
  subscriber base and increase their loyalty.

 Who Should Attend?

• Network Operators & SIP trunking providers - executives, product managers, and network architects interested in deploying in-demand enhanced services and creative, real-time billing solutions.
• Telecom equipment manufacturers and system integrators - product managers and software architects interested in providing an end-to-end solution.
• Telecom consultants that are tasked with finding innovative and proven infrastructure solutions that can help their next-generation service provider clients build their business.

View the Webinar Now!

Infonetics is reporting that VoIP is back for businesses with an uptick in business VoIP sales. Infonetics expects business VoIP to make up a third of the VoIP service revenue by 2014. While residential VoIP has remained stable, service providers are reporting that hosted VoIP was up across all business classes at the end of 2009 and into 2010. This growth is a promising sign for carriers and service providers who are positioned to provide hosted VoIP business-to-business and carrier-to-carrier services.

"The enterprise telephony market was hit hard in 2009 due to the recession, but based on the latest quarterly shipment figures and results from our March 2010 survey of North American enterprises about IP PBX spending, it appears that the bleeding has stopped and 2010 promises to be a better year, good news for vendors and service providers alike," notes Matthias Machowinski, directing analyst for enterprise voice and data at Infonetics Research in the release.

On the heels of market research firm In-Stat’s recent prediction that VoIP could reach 79% penetration in 3 years, they also estimate that there will be 288 million users of Voice-over-Internet Protocol (VoIP) by then. In-Stat believes that over half of these subscribers “will be associated with online mobile VoIP providers, under one-third will utilize mobile VoIP with 3G MVNOs or mobile operators, and 11 % with WiMAX/LTE operators.” With Apple’s and AT&T’s new relaxed policy with respect to voice being transmitted over the data network, and partnership agreements like Verizon’s and Skype’s or Truphone and Optus, this growth is only going to be accelerated. In-Stat estimates that annual sales of mobile VoIP applications will be $35.2 billion by 2013.

VoIP is an amazing technology that is poised to profoundly change how and when we communicate. While the growth to date has been primarily centered around cost-savings and land-lines, we are starting to see mobile VoIP gain traction despite the processors in today’s mobile phones and our congested 3G data networks. In time, VoIP will stop competing on price and it will start to compete on the features and benefits of richer, more empowered communications facilitated by high-definition voice, presence, Internet enablement and fixed mobile convergence and it will achieve 100% penetration.