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Ovum Report Shows IP Softswitch Technology Demands Continue

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March 20, 2012

Ovum Report Shows IP Softswitch Technology Demands Continue

By Susan J. Campbell, TMCnet Contributing Editor

The demand for IP telephony is growing as consumers and businesses alike are recognizing the potential cost and productivity savings in the next-generation technology. As a result, the demand for IP softswitch technologies continues to also grow.

In a recent press release, Ovum (News - Alert) announced growth in the IP softswitch space as revenues are expected to hit $20.5 billion in 2017 in the global service provider switching and routing (SPSR) market. This total is an increase over $13.3 billion in 2010. Ovum goes on to predict that CAGR will be 6.4 percent over that period.

Overall IP traffic growth remains strong, driving the increased demand for the IP softswitch and routers within service provider networks. The independent analyst firm also suggests this growth will accelerate further as mobile broadband and fixed subscriber penetration rates increase. Likewise, consumer video applications will continue to drive ever-growing levels of network traffic.

“Carriers will need to invest in growing their IP infrastructure or risk losing subscribers. In developing nations, carriers are building out their 3G wireless networks, while developed nations are investing in LTE (News - Alert) to accommodate mobile bandwidth demand,” explained David Krozier, principal analyst, network infrastructure, at Ovum, in a company release.

The largest geographical regions covered by Ovum were in North America, while the Asia-Pacific region was a close second. According to Ovum forecasts, there will be 9.7 percent growth in the Asia-Pacific market for 2012, with 4.0 percent in North America.

Ovum expects this disparity in growth to manifest itself in a leadership change between North America and the Asia-Pacific region. 

“The SPSR market in the Asia-Pacific and South & Central America regions will grow faster than the global CAGR of 6.4 per cent,” Krozier added. “In terms of revenues in Asia-Pacific, the edge router segment is leading the way, reaching $4.2 billion in 2017, while the core router segment will hit $1.6 billion and the IP/Ethernet router segment will only break the $1.4 billion level. This is not surprising, as the edge router plays a key role in carrier networks as the control point for delivering subscriber services.”

This demand for the IP softswitch and other supporting technologies is firmly driven by the benefits they can deliver. If you think about a 43 percent savings in operation costs related to communications, an alternative platform makes sense.

A recent Siemens Enterprise (News - Alert) Communications study showed that pure IP-communications can drive a 43 percent in savings when compared with traditional PBX infrastructures. This figure alone will draw new attention and adoption in softswitch and service provider technologies.

Edited by Stefania Viscusi

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