In-Stat/MDR Projects Rapid Growth for IP Centrex/Hosted PBX

A new report from high-tech market research firm In-Stat/MDR projects that IP Centrex/Hosted PBX will experience growth of around 100% annually through 2008, with much of this growth coming from the entry of Tier 1 providers into the market.

A network hosted voice application, IP Centrex/Hosted PBX provides business users with voice features similar to those offered by an IP PBX. Although at first only smaller service providers sold the service in the US, more Tier 1 players are moving into the market as the demand for VoIP grows.

In-Stat/MDR's findings include:

At the end of 2003, service providers had approximately 40,000 IP Centrex/Hosted PBX seats in service in the US. Covad (GoBeam) had the largest market share at 32%;

The entrance of regional Bell operating companies (RBOCs) will greatly accelerate overall growth. Both SBC and Qwest launched their service offerings in 2004. In-Stat/MDR expects to see the other two RBOCs enter the market as well;Most installations service 40-60 users per site, but providers are reporting an upward trend in this number;

The average monthly service for IP Centrex/Hosted PBX is $65, with $20 going towards Internet access and $45 for the voice application. The average service installation fee is $175 per seat. In-Stat/MDR believes that prices will remain relatively constant as competition increases to meet the growing demand; and

Overall service revenues will remain just a fraction of those of competing voice solutions such as IP PBX. The report attributes this to the reluctance of firms to change their habit of investing in LAN-based voice-switching solutions as opposed to hosted applications.