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Report: Carrier VoIP Market Fell 20 Percent Year-over-Year in Q4

TMCnews Featured Article

March 12, 2009

Report: Carrier VoIP Market Fell 20 Percent Year-over-Year in Q4

By Michael Dinan, TMCnet Editor

The carrier VoIP market fell 20 percent in the fourth quarter of 2008 compared to the prior year, according to a Redwood City, California-based networking and telecom market research firm.

According to Dell’Oro Group, lower sales in developing regions contributed to the sharp decline.
Greg Collins, the firm’s vice president, says that those areas had been a key growth driver for the carrier IP telephony market, as new construction and rising incomes fueled investments in fixed-line telephony services.
“While we saw a market decline coming from developing regions in the fourth quarter of 2008, it is unclear exactly to what extent the decline in consumer demand in the United States will affect the future economies of developing regions, which have relied largely on exports to the United States for their growth,” Collins said.
Yet waning consumer demand appears to affecting – in many cases, seriously damaging – businesses, including companies tied to VoIP.
As TMCnet reported today, less than two weeks after posting a net loss of $2.14 billion, or $4.28 per share, for the three-month period that ended Dec. 31, North America’s largest telecom equipment vendor is seeking to break itself up by selling off major divisions, the Toronto-based newspaper The Globe and Mail says.
According to a story by Matt Hartley, Jacquie McNish and Boyd Erman, Nortel Networks Corp. is taking offers from parties interested in their wireless-gear business “as well as a separate division that manufactures office telecom equipment.”
“Together, those two divisions posted $6.7-billion in revenue last year, or more than half the company’s sales,” the paper reports.
Nortel (News - Alert) spokesman Mohammed Nakhooda declined to comment when reached by TMCnet.
“Nortel has a policy of not commenting on rumor and speculation,” Nakhooda told TMCnet. “We are still in the process of developing a plan (as previously stated) that will in the best interests for our customers and stakeholders. When the plan is approved by the stakeholders and the court, we will communicate it.”
Dell’ (News - Alert)Oro says in its “Carrier IP Telephony Quarterly Report” that despite continued financial struggles and corporate restructurings, Nortel regained the market’s top vendor position based on revenue in the fourth quarter, with 13 percent market share.
“The report indicates that Huawei (News - Alert), which has a strong presence in developing regions, lost market share in the fourth quarter,” the firm says. “However, its market share was up for the full-year 2008.”

Don’t forget to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP Communications industry. The library offers white papers, case studies and other documents which are free to registered users.

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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