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Telecom Growing Nicely
December 5, 2007
It’s a good time to be in telecom. With all the housing gloom and doom it is nice to see that at least the telecom market is doing exceedingly well. Of course you have to pick your battles… Consumer VoIP is a rough space to be in (just ask Vonage) but companies focusing on the enterprise are as happy as pigs – well let’s keep this semi clean – Pigs in subprime mortgages.
Case in point, after a sluggish second quarter in 2007, enterprise telephony equipment manufacturers saw an 11 percent jump in worldwide sales in 3Q07 to reach $2.6 billion, according to a recent study.
“The Big Three (Avaya, Cisco, and Nortel) had excellent quarters, all growing well into the double digits,” said Matthias Machowinski, directing analyst for enterprise voice and data at Infonetics Research.
Worldwide sales of service provider next-gen voice equipment are up 5 percent in 3Q07 from 2Q07 to $956.4 million, says Infonetics Research in its "Service Provider VoIP and IMS Equipment and Subscribers" report.
“The bump this quarter was partially due to seasonal factors, as the third quarter tends to be strong, but also because of increased demand across the board, even in the TDM segment. Overall, 2007 is on track for high single-digit growth over 2006.”
In fact, year-over-year, the next-gen voice market is up 15 percent, the report shows.
For more on this story please check out Carrier VoIP Equipment Sales Jump 5 Percent in 3Q07 by TMCnet’s Tim Gray.
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Speaking at VPF Winter 2007 Today
December 5, 2007
I am speaking today by the way. I forgot to mention it. Here is the session you can see me at later today –4:00 PM in fact.
Keynote Panel
Web, Media and Telecom Market
Panelists include Bhupender Kaul from Time Warner Cable and Hunter Newby from Telx. See below for some of the discussion points.
The panel will be an informal discussion on how these various markets are intersecting, and potentially merging into a single industry. Specifics include:
- Opportunities and disruptive influences of the Web and Media on Telecoms industry
- Open standards, interoperability, peer-to-peer are viewed with concern by the telecom and media industry
- Strategies carriers are taking in their "home" markets and in global markets
- The transition of CableTV to Video over Internet and IPTV and its impact on the MSO market
- What will the role of a traditional telecom company look like in 2, 5 and 10 years?
- How will Google's 700Mhz bid change the industry?
- Is the Web the new "telecom" industry?
I know it is a bit late but assuming you are reading this blog entry on your mobile device while jogging in Central Park you can make it here by 4:00PM EST. :)
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Voice Peering Forum Winter 2007 Kicks Off
December 5, 2007
At the Voice Peering Forum Winter 2007 conference the attendance is very good which indicates tremendous interest in this burgeoning market. So far it seems clear that Stealth Communications, the company behind this event has yet another successful conference under its belt.Perhaps the best indication of how this market has evolved is the fact I am sitting in a session on wholesale VoIP meaning the Voice Peering Forum is not just about peering but has evolved to the point where it focuses on more general service provider topics – not just peering.
The session really focuses on international long distance growth and is being chaired by Stephen Beckert, Research Director at TeleGeography Research is speaking. Here are some of the session points worth noting:
- Aggregate wholesale revenues are growing 2-3% annually while traffic is growing 20-30%.
- The impact on carriers net is not as bad as on gross. The reason for this decrease is due to declining mobile termination rates.
- Most regulators in Europe have set policies to lower rates and this will artificially constrain revenues.
- There is slower traffic growth to and from mobile phones.
- This is counterintuitive because mobile subscriber growth grows 20% annually.
- Then again, much of the phone purchases in Europe are for second phones (SIM cards) meaning less traffic per phone.
- In addition, the biggest mobile subscriber growth has come from developing countries like India, China Pakistan, Bangladesh, Nigeria etc, where ARPU can be $2 per month.
- One third of international wholesale traffic is VoIP-based.
- Skype had 14 billion minutes of international traffic in ’06 and ’07 according to TeleGeography Research
- This is a huge amount for one company but not large compared to 300 billion minutes from major phone companies.
- Skype is having a measurable impact on international carrier growth rates.
Service providers have much more complex challenges ahead of them and niches are harder to spot. Some incumbents with large retail customer bases will outsource their long distance.
This is a slow motion crisis, much better than 1999 when rates dropped rapidly. Service providers will begin to join forces and pool resources to reach the international market. There will also be more cost cutting which could be buoyed by voice peering.
The energy level at the conference is as high as any of these conferences I have attended and I am looking forward to keeping you informed of the latest news from the show. Stay tuned.
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