Infonetics: IMS Market is Down, But Not Out

The first quarter buying blues that sunk the Ethernet switching market hit IMS and next generation VoIP equipment last quarter, reports Infonetics Research in its latest "Service Provider Next Gen Voice and IMS Equipment" report due to be released on Wednesday.

The market dropped 7% to $722 million in the first quarter of 2006, but still remained 48% higher than first quarter, 2005 and is expected to remain strong over the next few years reaching $6.2 billion in 2009.

The report highlights three emerging trends. First, session border controllers (SBCs) could be used as the traffic cop ensuring VoIP security, and as the security gateway in IMS acting as a P-CSCF, says St?phane T?ral, directing analyst at Infonetics Research. Manufacturers of SBCs include Acme Packets, Data Connection, Ditech Communications, Huawei Technologies, IntereXchange Carrier, Juniper Networks, NeoTip, Netrake, Newport Networks, NexTone Communications, Veraz Networks, and Versatel Networks.

Second, media servers are evolving to become the MRF (Media Resource Function) in IMS architecture. MRFs control the multimedia resources within the IMS architecture, providing such functions as resource provisioning and media mixing and processing.

And third, while softswitches are still growing, the pace of IMS deployments -- along with service providers' willingness to find alternatives -- may lead to a diminishing role of softswitches, says T?ralMuch of this activity will be fueled by phenomenal growth in residential and SOHO VoIP subscribers. The number of subscribers is expected to nearly double between 2005 and 2006 to 47.3 million worldwide, and will continue to skyrocket through 2009.

This year Infonetics expects there to be:

- 21.3 million subscribers in Asia Pacific, up 50% from 2005

- 13.6 million subscribers in EMEA, up 151% from 2005

- 12.3 million subscribers in North America, up 184% from 2005

Other Market Highlights:- A total of $21.6 billion will be spent on service provider next gen voice and IMS equipment worldwide during the five-year period between 2005 and 2009.

- Although softswitch revenue was flat in 1Q06 and will remain flat in 2006, it is expected to grow to $2.6 billion in 2009, as they are the core of next gen voice networks.

- The session border controller segment is growing fast, up 29% sequentially and 99% from a year ago in 1Q05.

- In 1Q06, media gateways and softswitches made up 86% of total service provider next gen voice and IMS equipment revenue; as more traffic becomes IP, softswitches will increase their share at the expense of media gateways.

- Sonus leads the trunk media gateway segment, Nortel leads the softswitch segment, Acme Packet leads the SBC segment, Cantata leads the media server segment, and Broadsoft leads the voice application server segment.- In 1Q06, Nortel continued its lead in the combination media gateway/softswitch market, Siemens takes second place, and Huawei emerges in third.