How big is the global market for business IP telephony services offered by service providers? It’s a hard question to answer. For starters, IP telephony can include sales of IP private branch exchanges, unified communications solutions and services, hosted IP telephony services, access services such as SIP trunking and fees earned for managing premises business phone systems.
With all of this, the global business IP telephony market will reach $20.8 billion by the year 2018, according to Global Industry Analysts. The problem, of course, is that it is tough to make sense of global figures, especially without knowing in some detail which specific products are included in that figure.
The demand for business VoIP is primarily driven by the demand for mobile VoIP services and rapid adoption of VoIP among small and medium businesses, GIA says.
Global Industry Analysts says Europe represents the largest regional market, accounting for a majority share in global market revenue. Asia-Pacific represents the fastest growing market with annual revenue from the region growing at a compound annual growth rate of about 17.3 percent rate to 2018, though some would say this will happen from a low installed base.
Managed IP PBX (News - Alert) Services is the fastest growing market segment with growth projected to wax at a CAGR of 12.2 percent to 2018.
Separately, InfoTrack estimates U.S. IP telephony and unified communications spending will increase by an average of 10 percent per year, led by spending on hosted IPT services, which will almost triple between 2011 and 2016.
Among U.S. enterprises, defined as firms with 500 or more employees, spending on hosted IPT will grow at an average rate of 27 percent, which is almost two times faster than the average increase among U.S. SMBs (firms with fewer than 500 employees).
U.S. spending on unified communications technologies will increase by an average of 10 percent per year, led by spending on hosted IP telephony services, which will almost triple between 2011 and 2016, estimates InfoTrack.
Among U.S. enterprises, defined as firms with 500 or more employees, spending on hosted IPT will grow at an average rate of 27 percent, which is almost two times faster than the average increase among U.S. SMBs (firms with fewer than 500 employees), InfoTrack says.
"In 2011, SMBs represented 46 percent of the U.S. installed base of IPT lines, but accounted for only 30 percent of the spending on UC applications,” InfoTrack says.
But over the next five years, the growth of SMB spending on UC apps will be more than twice the rate of U.S. enterprises, which represents the mirror image of what we project happening in the hosted IPT sector," said Ken Dolsky, Senior Program Director for InfoTrack.
As always, one has to keep the size of the installed base in mind when pondering such forecasts. Other researchers, including Parallels, have estimated that small and medium business hosted IP telephony penetration is still relatively small.
The global market for hosted PBX (hosted IP telephony) services averaged between four percent and seven percent in the largest SMB markets, Parallels noted, as recently as late 2011.
Infonetics (News - Alert) Research separately has forecast that the global SMB VoIP services market would grow to $76.1 billion in 2015 with total subscribers of 262 million. Keep in mind that the total global telecom services business accounts for about $2 trillion in annual revenue in 2012.
So hosted IP telephony would represent about four percent of global revenue.
In the United States, it has been estimated that around 500,000 SMBs currently use a hosted PBX service, representing an $800 million market. In a U.S. telecom service business of about $336 billion in annual revenue, hosted IP telephony represents about two-tenths of one percent of total industry revenue.
However, Parallels estimates that the majority of the current in-house PBX systems will migrate to hosted mechanisms over time, representing $3.9 billion potential market for hosted PBX.
At the moment, it remains the case that most business IP telephony is supplied by premises-based solutions.
So how big is the business IP telephony? It depends on who you ask, and what the assumptions are.
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Edited by Brooke Neuman