VoIP Services A Better Bet Long Term
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Recent research by Juniper Research suggests resellers could do well selling VoIP hardware in the short-term, but by the end of the decade, the ITSP business is going to be much larger.

Internet Telephony Service Providers keep popping up all over the place offering dedicated networks or reselling wholesale offerings. Its no wonder, while Juniper research numbers indicate the market for VoIP hardware could reach US$5.5 billion by next year, the hardware business is expected to decline after the initial migration from circuit switched telephony.

As that happens, the hardware business could actually decline to US$3 billion world wide by the end of the decade.

Carriage services however are a different story. Although it’s a tough business to be in, Juniper predicts revenues could reach as high as US$18 billion by the end of the decade as incumbent telcos suffer at the hands of the ITSPs.

Juniper says the US$5.5 billion bonanza will be “driven by rapid new business growth in China, adoption of VoIP across existing western businesses and the echo of the year 2000 equipment purchase boom”. In particular, it notes that “sales will stabilise and fall in revenue terms after 2007 as the Chinese market begins to mature” and as low-cost hardware becomes available in the market.

The IP-PBX market is expected to reach more than US$1.6 billion next year, again with China predicted as a major customer, while IP phone handsets are expecting continued growth through to 2010 when 16 million units a year are expected for use with hosted solutions.

Juniper’s Barry Butler, said: “VoIP has the potential to transform business communications, in terms of call costs, cost of operations and integration with business processes. However, as with other IP based platforms, VoIP is a disruptive technology which will reshape the business communications vendor community.”

While Juniper says its latest research reveals the tipping point for business VoIP adoption is nigh, there are still barriers to adoption resulting from difficulties in network readiness and the regulation of VoIP in some countries.

The provision of IP Centrex solutions is slated to make up a huge portion of the business VoIP services market by the end of the decade with hosted IP Centrex solutions expected to reach US$7.6 billion of the US$18 billion Juniper is predicting.

Finally, Juniper says that the VoIP applications market will kick in and reach US$500 million and beyond by 2010.