Infonetics Research: Session border controllers post first sequential decline ever; VoIP outlook still good

Market Wire, August, 2008

Some softness in the otherwise healthy service provider VoIP equipment market materialized in 2Q08, reports market research firm Infonetics Research , with the overall worldwide market down 4%, led by double-digit percentage declines in the session border controller (SBC) and softswitch segments.

Infonetics' report, Service Provider VoIP and IMS Equipment and Subscribers , shows that the SBC segment posted its first sequential decline ever, dropping 14% from 1Q08 to 2Q08.

Still, from this time a year ago (2Q07), the overall market is up 3%, led by strong year-over-year gains in the SBC, media server, and softswitch segments.

"While down in the first half of 2008, we expect the carrier VoIP equipment market to bounce back in the second half, ending the year on a positive note. The 5-year outlook looks good as well, as demand for VoIP networking gear continues unabated, driven by a long term migration from circuit switched to packet telephony. Similarly, while the session border controller segment saw its first sequential decline this quarter -- due to a pause in deployments in North America and Europe where large service providers are maxing out their installed base rather than purchasing new equipment -- we expect it to pick up nicely in the second half of the year," said Stéphane Téral , principal analyst for VoIP and IMS at Infonetics Research.

Other highlights from the report:

--  The worldwide service provider VoIP and IMS market is forecast to
    reach $7.5 billion in 2011 (up from $3.9 billion in 2007), with IMS core
    equipment, particularly HSS (home subscriber servers) and CSCF (call
    session control function) servers, making up the bulk of the growth
--  The voice application server, media server, and overall media gateway
    segments are all up in 2Q08 from 1Q08
--  Voice over broadband (VoBB) continues to be the big driver across the
    board
--  Alcatel-Lucent shook up the worldwide trunk media gateway market with
    a 173% sequential jump in DS0 shipments in 2Q08, propelling the company to
    the #3 spot for both DS0s and revenue (previously #9 and #5, respectively)
    

Infonetics' report tracks VoIP subscribers and carrier VoIP equipment, including high-, mid-, and low-density trunk media gateways, SBCs, media servers, class 4 and class 5 application softswitches, and IP Centrex/hosted IP PBX, IP trunking, and residential voice application servers. The report also tracks fixed-line and mobile network IMS core equipment, including HSS and CSCF servers.

Companies tracked include Acme Packet, Alcatel-Lucent, AudioCodes (Netrake), Dialogic (Cantata), Cisco, Comverse (NetCentrex), Ditech, Ericsson, GENBAND, Huawei, Italtel, MERA, MetaSwitch, Movius (IP Unity), NextPoint (NexTone), Nokia Siemens Networks, Nortel, RadiSys (Convedia), Sonus, Tekelec, Thomson Cirpack, UTStarcom, Veraz, Verso, Xener, and many others.

For report highlights , log in to Infonetics' online portal from www.infonetics.com (see Service Provider VoIP and IMS). For sales, contact Larry Howard, vice president, at larry@infonetics.com or 1 (408) 583-3335.

Infonetics Research ( www.infonetics.com ) is an international market research and consulting firm serving the communications industry since 1990. A leader in defining and tracking emerging and established technologies in all world regions, Infonetics helps clients plan, strategize, and compete more effectively.

Press Contact: Stéphane Téral Principal Analyst, Service Provider VoIP, IMS, and Mobile Infrastructure Infonetics Research (408) 583-3371 Email Contact