Voice-over-IP increasingly viewed as circuit switch alternative, says report

9 May 2001 News

Voice over Internet Protocol (VoIP) is being added as a complementary technology to help transfer traffic over the world's telephony networks at a rate that will triple the industry's value by 2006. So says Allied Business Intelligence (ABI), which, in a study notes that the world market for VoIP gateways and gatekeepers will grow from $3,7 bn in 2000 to $12,3 bn by 2006. In just a few years, service providers and enterprises across the globe have recognised the cost savings found in toll arbitrage and the opportunity for the future development of enhanced services that cannot be offered by PSTNs.

"There is a wholly optimistic outlook for the future of this market, especially in the service provider space," says ABI Analyst, Erin Thompson, the principal author of the report. "Competitive carriers can use the opportunities afforded by IP to differentiate their services from those offered by the traditional incumbent carriers."

In the service provider space, the market for VoIP equipment will grow from $2,6 bn in 2000 to $7,8 billion in 2006, according to study findings. The enterprise market will grow from $1,1 bn in 2000 to $4,6 bn over the six-year period.

North America is leading market development. Most vendors of VoIP equipment are headquartered in North America and the region currently accounts for 39% of the service provider and 64% of the enterprise market spaces. It is also the most deregulated, which affords more freedom for competitive technologies such as VoIP. However, there is opportunity worldwide as traditional phone networks, most notably in Asia-Pacific and in Latin America, are comparatively inefficient and expensive, making VoIP more attractive, states the report.

For further information about the report see www.alliedworld.com

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