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Demand for IP Lines for PBXs to Decline in 2009: Report

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June 04, 2009

Demand for IP Lines for PBXs to Decline in 2009: Report

By Michael Dinan, TMCnet Editor

Though VoIP penetration will continue to grow this year, demand for IP lines for the PBX (News - Alert) market will – for the first time – decline in 2009, according to a new report from a Redwood City, Calif.-based telecom market research firm.

Officials at Dell’Oro Group say that this down economy is fueling vendor volatility, which in turn is causing some customers – business with analog or digital phone lines, for example – to stay where they are for now.
According to the firm’s director, Alan Weckel, VoIP penetration is growing at a slower pace in 2009 when compared to prior years – the result of market trends that go beyond a weakened economy.
“Also, as customers look to alleviate budget constraints, IP line growth will slow in the short term, putting additional downward pressure on the market,” Weckel said.

Here's how the firm envisions IP versus digital and analog lines, over time (click image to enlarge):

Dell’Oro’s report comes as researchers from another firm say the global VoIP services market grew 33 percent in 2008, to $30.8 billion.

As TMC (News - Alert) Senior Web Editor Patrick Barnard reports, Infonetics Research’s (News - Alert) biannual VoIP and UC Services and Subscribers report finds that, despite the global recession, businesses continue to switch from traditional telephone service to IP Telephony.
“They’re being drawn to VoIP because of the cost savings and productivity enhancing features it brings,” Barnard reports. “The report defines VoIP services to include hosted VoIP (or IP Centrex), hosted UC (unified communications), integrated IP access, managed IP-PBXs, residential VoIP, SIP trunking and other types of IP voice access, including voice VPNs.”

Though business VoIP services represented only 31 percent of the total, this area grew faster than residential services during the year. Managed IP-PBX, hosted IP-PBX and hosted UC services accounted for three-fourths of the business VoIP total.

Interestingly, the report finds that SIP trunking is the fastest growing segment of VoIP services. Diane Myers, directing analyst for service provider VoIP and IMS at Infonetics Research, predicts that SIP trunking will hit an 89 percent compound annual growth rate from 2008 to 2013 – this trend driven mainly by cost. She said that hosted UC services will take off as well, with worldwide revenue doubling between 2009 and 2013.
That’s good news for companies such as Cisco, Avaya and Nortel (News - Alert), which – according to Dell’Oro – had the most IP line shipments in the quarter.
According to the report – though VoIP has been transforming the industry for more than a decade, the IP line shipments for the eight largest vendors in the market – that’s Aastra, Alcatel-Lucent, Avaya, Cisco, Mitel (News - Alert), NEC, Nortel and Siemens – averaged just 49 percent of total line shipments in the quarter.

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Michael Dinan is a contributing editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To read more of Michael's articles, please visit his columnist page.

Edited by Michael Dinan

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