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VoIP Carrier Equipment Sales Will Hit $5.7 Billion By 2008: Report

Voice over IP (VoIP) is on a sharp growth curve, with revenues from carrier VoIP equipment sales reaching record heights in the second quarter of this year, according to a new report from Infonetics Research.

Revenues were up an unprecedented 18% last quarter over the first quarter of 2005, reaching $614 million. Revenues were up 55% over the same period last year, and Infonetics expects them to reach $5.7 billion annually by 2008. While virtually all enterprise VoIP product classes showed similar revenue improvements, the softswitch class 4 and media servers markets were sluggish, showing no improvement in the second quarter. Nevertheless, softswitch class 5 applications experienced robust growth and overall softswitch revenues reached $247.9 million, up 15% over the first quarter.

"Growth in equipment sales is very strong as carriers continue down the network modernization and service innovation path," Infonetics Research directing analyst Kevin Mitchell said in a statement. "We upped our North American subscriber forecast and added a European subscriber forecast. In both regions, we expect penetration of VoIP to near 40% in 2008."

According to Infonetics, Enterprise VoIP equipment revenue gains will be matched by increases in the residential and small-office-home-office (SOHO) VoIP market. The firm expects the number of residential and SOHO VoIP subscribers in North America to leap from 1.1 million in 2004 to 24.3 million in 2008, with over 6 million new subscribers coming online every year between 2006 and 2008. Infonetics expects even more dramatic growth in Europe, where the subscriber base will swell from 2.2 million in 2004 to 27.8 million in 2008.