VoIP revenue expected to halve till 2011

To no-one’s surprise, the convergence of data and voice accelerated during the past year, IDC has said.

However, increasing competition in the VoIP space is expected to see revenue growth in the phone and IP private branch exchange (PBX) sector slow to half its current rate over the next five years, the research outfit said.

IDC also expects the local IP Phone and IP PBX revenue to grow at a compound annual growth rate (CAGR) of 14.49 percent to reach $606.76 million in 2010.

The total market revenue of Australian VoIP service, including managed/hosted VoIP and IP Centrex will increase to $462.12 million in 2010 at a CAGR of 39 percent.

Investigating this phenomenon it its ‘Australia Business Voice over IP Services and Equipment 2006-2010 Forecast and Analysis: Golden Egg Hidden in Services’ report, telecommunications research director Landry Fevre said the change would have a strong impact on providers in the VoIP field.

Equipment vendors, ISPs, carriers, service providers and system integrators will have to target specific industrial verticals and move from technology-based to value- and usage-based solutions, he said.

"Convergence integrators must ensure not to be too reliant on equipment sales revenue and mitigate risks with recurring revenue such as services,” Fevre said in a statement.

“Opportunities over the next five years will be in managed convergence services, specifically in managed VoIP security, network capacity/support, application management, hosted voice solutions and contact centres."

As VoIP market penetration increased and the complexity of deploying applications decreased, a wider use of open standards was expected to be used, Fevre said.

“In addition we predict the integration of voice functionality into critical business applications that can be deployed out of the box," he said.

Vendors Cisco, Avaya, Nortel and Alcatel were expected to lead the market during the next five years with service providers like Telstra, Optus and smaller players expected to continue tuning their offerings and pricing.