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The weakening economy reportedly has claimed another victim in the IT industry, as the quarterly carrier IP telephony market fell nearly 11 percent year-over-year, according to a Redwood City, California-based networking and telecommunications research firm.

 

Officials at Dell’Oro Group say that despite a modest sequential increase during the third quarter, operators are poised to focus next year’s budgets on reducing expenses, meaning there will be weaker demand for carrier VoIP products.

 

According to Greg Collins, the firm’s vice president, many of the trends that have been affecting the market are being compounded by the poor economic environment and by the recent financial market collapse.

 

For example, Collins said, wireline service providers continue to be challenged by cable and wireless network operators offering basic voice services.

 

“Consequently, the number of fixed-line network connections continues to fall in much of the developed world,” Collins said. “Many traditional fixed-line network operators are refocusing their investments on revenue-generating services and applications like fiber-to-the-home and IPTV (News - Alert), rather than investing in infrastructure that might reduce operating expenses – such as next generation network equipment deployed to modernize fixed-line, plain-old telephone service.”

 

Dell’ (News - Alert)Oro’s predictions for the carrier IP telephony market represent the latest IT segment in a long line that researchers say is faltering in this slower economy.

 

As TMCnet has reported, the chip-making industry is predicted to suffer its first-ever two-year drop. Just this week, TMCnet reported that the network access control enforcement appliance market is dropping to single-digit quarterly growth for the first time since 2006.

 

The NAC market, which protects businesses’ security, saw saw 9 percent growth from quarters two to three this year, reaching $76.4 million, according to Cambpell, California-based Infonetics Research.

 

According to Jeff Wilson, principal analyst for network security at Infonetics, the government, healthcare, and education sectors have been solid early adopters of NAC technology, and vendors say that those verticals have not curbed their NAC purchases or plans due to the economic slowdown.

 

“Many NAC vendors found early success selling into the heavily regulated financial services market as well, which has all but imploded, of course, which will have a significant impact on the NAC market,” Wilson said. “The retail sector is being hit hard, too, forcing many retailers to postpone NAC investments. This effect will be temporary, though, as many financial firms invest in NAC for compliance purposes and will need to continue investing once their larger business issues are sorted out.”

 

According to Dell’Oro, Huawei continued to gain share of the carrier IP telephony market during the third quarter, as its stronghold in emerging economies was not yet impacted by the economic slowdown.

 

“Alcatel-Lucent also managed to win market share in developing regions during the third quarter compared to the same period a year ago,” Dell’Oro reports.