Infonetics: Service Provider VoIP Market Down 8 Percent

The worldwide service provider VoIP market dropped 8 percent in the third quarter, according to Infonetics Research. A big reason: large RBOCs and ILECs are scaling back on VoIP equipment purchases.

The overall market weakness was led by a steep decline in the high density media gateway segment, as well as a dip in the softswitch segment.

On the positive side, sales of session border controllers and media servers were up, although not enough to offset losses in other segments in the next gen voice market.

"Third quarter service provider VoIP equipment sales confirmed what we started seeing in the previous quarter: In North America, carriers were already slowing their VoIP investments after completing major projects; in Western Europe and some parts of Asia, such as South Korea, inventories were already high. The quarter also reflects the global economic downturn, which is turning the expected VoIP deployment dip into a drop. New VoIP projects will be postponed at best, and some may be cancelled altogether, as more consumers ditch their fixed lines, thus cutting the need for wireline upgrades. As such, we are predicting a 2-year pause in the overall carrier VoIP space, with a pick up expected in 2011," said Stéphane Téral, principal analyst for VoIP and IMS at Infonetics Research.