The Recession is Over for VoIP

Carl Weinschenk

The framing Jim Hodges uses in this story describing an update to Heavy Reading's IP Network Transformation Market Tracker- a long name for a tool that looks at the deployment of VoIP worldwide-is that he was pleasantly surprised by how well the platform did in light of the great financial tribulations of 2009. This year, he writes, 34.3 million VoIP lines will be added worldwide.


In assessing his findings, Hodges came to this set of likely reasons that the world of telecom kept on changing despite the chaos in the marketplace:

It's difficult to apply absolute weighting to the various factors that maintain and fortify the fire in the belly of network operators to forge ahead with TDM replacement. These include a lack of TDM vendor focus, the unmitigated threat of all-IP mobile broadband, increased competition from alternative carriers, and the rapidly approaching best-before date of TDM networks.

Well put. Furthermore, Heavy Reading predicts that the good news will continue. A chart accompanying the story points to significant growth between now and 2014. By the end of that period, for instance, more than 90 percent of the Dutch will use VoIP, as compared to an already impressive 60+ percent today. Likewise, France will hit about 70 percent, up from about 50 percent today. The United States will be no laggard, moving from a modest 25 or so percent today to 60 percent in 2014.


The numbers-and Hodges' reason for them-sound about right. Organizations, recession be damned, have to make plans for the future. These plans don't include Time-Division Multiplex (TDM), which is quickly becoming the black-and-white television of the telecommunications network. Indeed, the most pertinent of reasons given by Hodges is understated. Saying that there is a "lack of TDM vendor focus" is a polite way of saying that the folks who make the gear have moved on.


Heavy Reading's optimism is not unique. UK firm visiongain, in a broader report released earlier this month, sees general growth in the IP sector. It isolates mobile VoIP as a particularly promising area. The report says that mobile data services-it includes mobile VoIP (mVoIP) as a subset-will rise 16 percent this year. The press release points to a growth path in which existing services are knit together in innovative ways:

There will be opportunities for the mobile telecoms industry in the IP convergence/substitution market. By introducing fixed VoIP to cellular telephony and mobile VoIP to fixed telephony, operators will have the opportunities to grow on a unified voice and multimedia service experience. VoIP services are cheaper than circuit-switched services on traditional legacy networks. VoIP has diversified from purely voice implementation to a complete multimedia experience offering video calling, video conferencing, gaming and many other features.

On April 1, Infonetics posted a long press release that highlighted the results from three reports run by the firm. The upshot confirmed what Heavy Reading and visiongain's assessments. The three reports-on IP PBX sales, on VoIP and unified communications (UC) services and subscribers in smaller settings and on enterprise UC, VoIP and TDM equipment sales-suggest that the market has bottomed out. Said Matthias Machowinski, the firm's directing analyst for Enterprise Voice and Data:

The enterprise telephony market was hit hard in 2009 due to the recession, but based on the latest quarterly shipment figures and results from our March 2010 survey of North American enterprises about IP PBX spending, it appears that the bleeding has stopped and 2010 promises to be a better year, good news for vendors and service providers alike.

The findings by the three firms are not surprising: Old equipment needs to be replaced, no matter what the financial pages say. Folks who make a living selling, installing and advising on this gear probably didn't want to jinx themselves by discussing it too loudly. Perhaps now they can.

Add Comment      Leave a comment on this blog post
May 2, 2010 4:25 AM Mark Vickers Mark Vickers  says:

I work for a medium sized telecoms company in the UK, and VOIP isn't the answer to Telecoms at all. We're finding that major customers who went over to VOIP a few years ago are returning to TDM because of the bad quality of IP. They are now much happier, so don't hedge your bets that VOIP will take over the world - well not just yet anyway!

May 20, 2010 5:24 AM Voip Phone Reviews Voip Phone Reviews  says:

Nice article. I know more about what's going on with Voip now.

Aug 17, 2010 12:10 PM business voip phones business voip phones  says:

Wow VoIP is becoming a very large business


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