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Businesses Increasingly Acknowledge the Cost-Saving Value Proposition of VoIP Access and SIP Trunking Services Observes Frost & Sullivan - New analysis from Frost & Sullivan, North American VoIP Access and SIP Trunking Services Markets, finds that the market earned revenues of $717.3 million in 2009 and estimates this to reach $3.9 billion in 2016
Businesses Increasingly Acknowledge the Cost-Saving Value Proposition of VoIP Access and SIP Trunking Services Observes Frost & Sullivan

 

NewswireToday - /newswire/ - Mountain View, CA, United States, 2010/07/06 - New analysis from Frost & Sullivan, North American VoIP Access and SIP Trunking Services Markets, finds that the market earned revenues of $717.3 million in 2009 and estimates this to reach $3.9 billion in 2016.

   
 
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The voice over Internet protocol (VoIP) access and session initiation protocol (SIP) trunking services market will continue to build on its impressive, downturn-defying 40.1 percent growth in user base and 22.3 percent growth in revenues in 2009, as enterprises look for cost-effective alternatives to their legacy time division multiplexing (TDM)-based communication infrastructure.

Intense market competition and the resulting price pressures, at least at the lower end of the market, are likely to keep the subscriber base growing at a faster rate than revenues, translating to lower margins for the providers.

New analysis from Frost & Sullivan (conferencing.frost.com), North American VoIP Access and SIP Trunking Services Markets, finds that the market earned revenues of $717.3 million in 2009 and estimates this to reach $3.9 billion in 2016.

If you are interested in more information on this study, please send an email to Jake Wengroff, Corporate Communications, at jake.wengroff[.]frost.com, with your full name, company name, title, telephone number, company email address, company website, city, state, and country.

End users prefer IP-based technologies, such as SIP trunking, for their ability to save costs by converging voice and data access lines and reducing long-distance calling charges. However, their real attraction lies in the ability to support a more centralized application management and the integration of the telephony infrastructure with a variety of enterprise applications such as email, customer relationship management (CRM) platforms, and unified communications (UC) applications that include messaging, presence, and conferencing.

Nevertheless, with integrated access lines emerging as a viable alternative to legacy telecom circuits for voice calling, businesses that have deployed TDM infrastructure are grappling with the issue of multiple service providers for their voice and data networks.

"The majority of the installed customer premise equipment is still TDM private branch exchange (PBX) and therefore, a large percentage of the installed services base requires the deployment of media gateways for protocol conversion, while only a small percentage is direct/native SIP trunks connecting to SIP-enabled IP telephony platforms," explains Frost & Sullivan Program Director Elka Popova. "Going forward, that ratio is bound to change as customers increasingly replace their legacy systems with new, hybrid, or pure IP telephony equipment."

As SIP emerges as the standard for IP telephony and broader multimedia communications, customers have been increasingly requesting service providers to bridge UC islands. SIP trunking allows enterprises to breach the confines of their voice-centric IP PBXs and embrace the broader multimedia communications environment enabled by SIP.

Enterprises that use their IP telephony platforms only for voice face few network integration and management challenges, but those that want the benefit of a more integrated communications solution, require additional capabilities such as SIP trunking to incorporate the application silos.

"SIP trunking services are expected to gain momentum as companies increase their investments in IP-based communications applications and extend their UC environments beyond the enterprise to communicate with customers and partners," notes Popova. "Evidence of the return on investment benefits of SIP trunking has encouraged a number of service providers to start promoting these services more strongly."

The market is undergoing a transition from traditional infrastructure to IP-based systems, wherein the revenues from legacy services are declining, but new IP-based services have not yet taken off. This situation will change, driven by macro-economic and company-specific factors including technology evolution, and maturing standards and service levels. When that happens, carriers will start selling IP-based services and applications on a larger scale.

Meanwhile, service reliability and quality levels of VoIP access services have significantly improved over the years.

"Service providers are investing in enhancing their VoIP access/trunking services in terms of survivability, redundancy, and trunk pooling to be able to offer greater value," observes Popova. "Service providers have more or less overcome voice quality issues with their ability to provide different classes of service, dynamic bandwidth allocation, and voice prioritization capabilities."

However, these improvements come with a heavy price tag, which belies the popular perception that VoIP is inexpensive. Service providers also admit that even though enterprises are curious about SIP trunking, awareness of its availability and benefits is still inadequate.

Market participants have to operate shrewdly as VoIP access and SIP trunking are not suited to all types of customers. They will have to choose their clients based not only on their geographical spread, but also on the nature of business and status of their existing legacy contract. What is encouraging is the fact that businesses have an increasing tendency to consider these services, not just from the perspective of cost reduction, but as tools to achieve their long-term communication goals.

North American VoIP Access and SIP Trunking Services Markets is part of the Enterprise Communications Growth Partnership Services program, which also includes research in the following markets: World Enterprise Telephony Platform and Endpoint Markets, World Enterprise Email Platform Markets, World Unified Communications Markets and North American Hosted IP Telephony and UC Services Markets among others. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 40 offices on six continents.

North American VoIP Access and SIP Trunking Services Markets / N786

 
 
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Businesses Increasingly Acknowledge the Cost-Saving Value Proposition of VoIP Access and SIP Trunking Services Observes Frost & Sullivan

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