INGATE

SIP Trunking Featured Article

October 24, 2011


North American SIP and VoIP Trunking Market $2 Billion


By
Contributing Editor

The revenue earned by providers of North American SIP and VoIP trunking services “is roughly $2 billion,” according to Elka Popova, Frost & Sullivan program director.


In 2010, the North American VoIP access and SIP trunking user base expanded at a rate of 65.6 percent and reached 7.2 million users, says Popova.  The installed base is expected to experience a compound annual growth rate of 35 percent to reach 59.1 million users in 2017 and generate service provider revenues of $7.44 billion.

At the moment, about 85 percent of sales are generated by organizations with 500 or fewer employees, considered to be small business by some, small and medium business by others.

It can be complicated to describe small and medium business SIP trunking and IP telephony revenues, for several reasons. A SIP trunk is a “voice service,” sometimes providing features, sometimes just the access to the long distance voice networks.

The Frost & Sullivan study, aside from including both U.S. and Canadian markets, defines “VoIP access” as  services including  VoIP trunking (converged access lines connecting with TDM enterprise telephony platforms) as well as Session Initiation Protocol (SIP) trunking (converged access lines connecting with IP telephony platforms).

The study also includes “basic VoIP access” services (converged access lines connecting with low-end key systems or directly with telephony endpoints).

The forecast does not include Time Division Multiplexing Centrex, Centrex IP, or hosted IP telephony (IP Centrex/hosted IP PBX) services.

So the Frost & Sullivan forecast includes both SIP trunking and “converged” IP telephony access, sometimes known as “integrated access.” That’s an important qualification. Other researchers, such as at Infonetics Research, point out that T1 lines are still the most commonly used trunking service today, and will be in 2013. T1 still dominant

SIP trunking adoption has been robust in 2010 and 2011, though. Popova’s own forecasts would suggest significant SIP trunking growth. SIP trunking grew more than 100 percent in 2010.

Revenue from SIP trunking services to businesses is forecast by Infonetics to grow at a phenomenal 52 percent compound annual growth rate (CAGR) from 2011 to 2015. 52 percent CAGR to 2015

So the $2 billion estimate for 2011 and the $7.44 billion estimate for 2017 include both SIP trunking and converged access.

The nuance here is that included within the “trunking” forecast are some amount of “line side” features that might otherwise be considered features of a hosted IP telephony service.

In a VoIP access or SIP trunking scenario, the service provider typically offers local dial tone, long-distance calling, and a limited set of call-management and control features such as extension dialing between intra- and inter-office locations, says Popova.

But Popova also notes that, increasingly, service providers are bundling VoIP access and SIP trunking services with various network-based communications applications and capabilities, such as hosted auto attendant, voicemail, unified messaging,  mobility, fixed-mobile convergence or some data services including Web hosting, Web e-mail, managed security.

The point is that what we generally consider “access” or “trunking,” and what we generally consider “calling features” and “voice services” is blurring. Over time, in fact, it is reasonable to assume that the line between “hosted IP telephony” and “trunking” will become rather porous in some ways.

The other nuance is that various companies will use different definitions when talking about “small” business,” mid-market or “medium-sized” business.

Frost & Sullivan includes within the small office and home office segment those organizations with five to 100 employees. Others might call that the “small business” or “micro-sized” segment.

The mid-sized business segment includes organizations with 100 to 499 employees, according to Frost & Sullivan. Others will refer to this segment as “small business” as well.

The large enterprise segment includes organizations with 500 or more employees, according to Frost & Sullivan. Some might say that is a “medium business” segment.

Some might wonder why SIP trunking hasn’t grown even faster than it has. “The gap is hard to explain,” says Popova. “Sometimes a SIP trunking provider doesn’t support the customer’s call control platform; sometimes the service level agreements are not right; in other cases there are important incumbent relationships and SIP trunking isn’t offered by those providers,” says Popova.

In other cases, buyers might simply not be comfortable buying from a smaller provider, Popova says.

Enterprise buyers are different from small businesses in several ways, and one difference is that larger companies might be more inclined to adopt hosted applications relating to video, mobility or fixed-mobile convergence, with value-added disaster recovery or security features, she says.


Gary Kim is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Rich Steeves
Loading
Subscribe here for your FREE
SIP TRUNKING enewslettter.

Featured Partner

Featured Whitepapers

SIP Security for the Enterprise
Voice over IP (VoIP) is incorporated into a variety of computer networks, both public and private, and used for everyday transactions and communications among carriers, businesses, government agencies...

Voice-Optimized Network Delivers Premier Call Experience
Customers equate call quality with business quality. Real-time communication, interpersonal interaction, and the cordial tone of a call center representative can create a positive impression of your business that no email can match.

Featured Datasheets

Ingate SIParator E-SBCs
Adopting SIP is a simple process with the Ingate SIParator, the secure enterprise session border controller (E-SBC). The SIParator makes secure SIP communications - including VoIP,SIP trunking and more - possible while working seamlessly with your existing network firewall.

Ingate Firewalls
Everyone is talking about enterprise usage of VoIP, instant messaging and other types of realtime communications including presence and conferencing.

SIP Trunk Solutions for Service Providers
The award-winning Ingate Firewall and Ingate SIParator deliver a high quality, reliable SIP trunk connection between the customer's IP-PBX and the service provider network, and solve interoperability issues to simplify deployments and support for remote diagnosis of reported issues.

Featured Case Studies

Case Study - Haiti
With this solution our doctors were able to reach anywhere in the world quickly and easily, to get consults from colleagues, facilitate treatment, order supplies 'on the fly' and also help victims report back to families. The solution from Business Mobility Systems and Ingate worked immediately.

Case Study - Turkish Petroleum
"With one Ingate at the customer headquarters, all of their remote workers can enjoy the benefits of Turkish Petroleum's IP-PBX from anywhere in the world.

Case Study - GCM
"The Ingate solution overcomes the NAT traversal hurdle and makes it possible to connect customers to our VoIP service, without the need of costly leased lines or support intensive VPN tunnels.

Case Study - Kool Smiles
"Ingate's solutions provide the advanced level of security necessary for this medical environment and the tools to make the interface to the service provider hassle-free."

Case Study - NMSAS
"This solution really saved the day for us," said Paul Mercier, IT Administrator, NMSAS. "We needed to leverage SIP trunks to reduce costs, and they had to work with our existing Microsoft OCS investment."

Discover Leisure Connects Remote Users to its IP-PBX
Discover Leisure is one of the largest resellers of caravans and motor homes in the UK. With 15 branch of?

Featured eBOOKS

Internet+: The Way Toward Global Unified Communication
Connecting the telephony of the enterprise PBX or Unified Communications (UC) system using SIP trunks instead of conventional telephone lines has been very successful in recent years.

What is SIP Trunking? Edition 2
SIP trunking is becoming more of a focus for service providers. One key issue many service providers face when deploying SIP trunks is NAT, or Network Address Translation, traversal.

What is SIP Trunking? Edition 1
A vast resource for information about all things SIP - including SIP, security, VoIP, SIP trunking and Unified Communications.

Featured Videos

E-SBCs AS The Demarcation Point:
Ingate's Steve Johnson talks to Erik Linask about the role session border controller plays as the demarcation point at...

Demystifying DPI
How can deep packet inspection protect your SIP traffic as well as your entire network?

Featured Resources

What's New

Presenting the New Ingate/Intertex Website:
Internet+ is an extended Internet access allowing high quality SIP (Session Initiation Protocol) based real-time person-to-person communication, everywhere and for any application. It applies to both fixed and mobile networks ...

Featured Blogs

Featured Webinars

Secure SIP Trunking:
What You Need to Know

Successfully Deploying Enterprise SIP Trunking:
Tools and Techniques for Overcoming Common Roadblocks

Featured Podcasts

Getting the Most Out of Your SIP Trunks:
Ingate's Steve Johnson and TMC's Erik Linask discuss how best practices forgetting the most out of SIP Trunking services and common pitfalls to avoid.