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Wholesale VoIP Feature Article

Global Service Provider VoIP and IMS Revenues Break Records

March 16, 2017

By Laura Stotler, TMCnet Contributing Editor

Service provider revenues from VoIP and IP Multimedia Subsystem (IMS) revenues are at an all-time high according to new research from IHS (News - Alert) Markit. The firm found that global service provider revenues for VoIP and IMS reached $5.4 billion in 2016, breaking records.

The findings indicate that the digital transformation toward virtualized technologies and solutions is well underway, and IHS forecasts virtualized solutions will comprise a growing portion of overall VoIP and IMS sales. This will happen steadily as service providers and operators incrementally migrate their architectures to environments using network functions virtualization (NFV) as well as software defined networking (SDN).

Last year virtual network functions (VNFs) made up 46 percent of media resource function (MRF) sales, as well as 25 percent of call session control function (CSCF) and home subscriber server (HSS) sales. VNFs also comprised 33 percent of voice application service sales and 4 percent of session border controller (SBC) sales, indicating that virtualization is making up an increasingly larger portion of revenues as operators move toward NFV.

While voice over LTE (News - Alert) (VoLTE) has experienced traction during the past couple of years, VoLTE spending tapered off overall last year, and particularly in the North American and Asia Pacific markets. Even so, VoLTE spending, combined with softswitch and gateway upgrades in the North American and CALA regions, was responsible for increased revenues in the first quarter of 2016. Spending on VoIP and IMS totaled $1.5 billion during that time period, up 1 percent from the previous year.

VoLTE projects in the EMEA and CALA regions are driving market growth, along with Class 5 network transformation projects, according to IHS. Additional market drivers for VoIP and IMS include fixed network expansions and upgrades, with a focus on softswitch and trunk media gateways. The investment and activity has led to an increased rollout of commercial VoLTE services, with 100 operators providing VoLTE as of last month, compared to 48 in January of 2016.

The future for VoIP and IMS revenue looks bright overall, if not record breaking, with IHS forecasting revenues of $4.8 billion by 2021. The slightly lowered spending will be attributed to a slowdown of new VoLTE network deployments as well as general downward pricing based on increased competition and large deals and partnerships.

Edited by Alicia Young

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