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North American VoIP Access Service Markets

  • Publication Date:February 2009
  • Publisher:Frost & Sullivan
  • Product Type: Report
  • Pages:64

North American VoIP Access Service Markets

Immediate Cost Savings to Bolster VoIP Access Services Market in a Challenging Economic Environment

The North American VoIP access service market can benefit from the recessionary trend and the strive for economies in communications services and solutions to grow steadily over the next few years; its end-user base of close to 2.2 million at the end of 2008 is expected to grow to over 23 million in 2014. Demand for VoIP access services will be favorably impacted by its ability to save costs by converging access lines and reducing site-to-site and long-distance off-net calling charges. Such services also enable businesses to outsource certain network capabilities and features to a service provider that is better equipped to provide continuous network management and service enhancements. With the services becoming increasingly accessible and tough economic conditions making immediate cost savings imperative, VoIP access services should fare well, says the analyst of this research. The implementation costs of the service are low as well since users need to make only a small capital investment in integrated access devices (IADs) and gateways. Moreover, providers are willing to subsidize the equipment or spread its cost over the year by including it in the monthly payments. Other strong adoption factors include improving service reliability and the addition of various survivability, failover, and redundancy capabilities. Continued interoperability testing among vendors and service providers will offer another major boost to the market. The clear value proposition of converged access services makes it the first choice of customers that are not restrained by existing contracts. Despite all their advantages, VoIP access services represent a commodity and are therefore, subject to considerable price pressures and the basic bandwidth component of the service bundle as well as the local and long-distance calling minutes are particularly vulnerable. Service providers can offset this concern by aggressively marketing advanced network-based features and capabilities such as hosted voicemail/unified messaging, hosted email, voice virtual private network (VPN) services, and fixed-mobile convergence (FMC) capabilities on top of the basic VoIP service to increase average revenues per user. However, the limited supply and low awareness of the availability of such services as well as concerns about the voice quality and overall service reliability restrains their rapid adoption. Market participants can look to overcome these issues through continued technology improvements and customer education but the challenging economic environment could shrink the potential target audience business telephone users. Budgetary constraints and fear of uncertainty will compel most users to hold onto existing equipment and other investments, postponing or canceling new purchases or subscriptions for a certain or an indefinite period. With demand likely to slow down over the next few quarters, service providers should seek to offer creative service packages but also watch margins very carefully, notes the analyst. Wherever possible, they need to explore opportunities to deliver additional network-based services even if target customers own some premise equipment. They could try to provide a fully hosted solution to customers that could benefit from outsourcing their entire communications infrastructure to a third party. Hosted IP telephony is a stickier' service with new features and capabilities and offers considerable opportunities for up-selling customers. Nevertheless, for service providers to succeed in this even more high-touch' service area, they have to ensure that appropriate channels, in-house skills, and market penetration strategies are in place. Vendors should offer tailor-made solutions to provide each customer with the greatest value. For example, trunk pooling can help businesses with sites in different time zones realize significant cost savings, observes the analyst. Businesses with a mobile workforce but with outdated time division multiplexing (TDM) systems may find it difficult to implement expensive premise-based FMC solutions and will appreciate network-based mobile extensions.

Technologies

The following technologies are covered in this research:

  • Unified communications (UC)
  • SIP trunking
  • VoIP trunking
  • Line-side VoIP access
  • 1 CHALLENGES AND OPPORTUNITIES IN THE NORTH AMERICAN VOIP ACCESS SERVICE MARKETS
    • Immediate Cost Savings to Drive Demand for VoIP Access Services in Tough Economic Times
      • 1. Analysis of the North American VoIP Access Service Markets
  • List of Figures
    • North American VoIP Access Service Markets: Industry Segmentation (North America), 2008
    • VoIP Access Service Market: Market Engineering Measurements (North America), 2008
    • VoIP Access Service Market: Impact of Industry Challenges (North America), 2009-2014
    • VoIP Access Service Market: Competitive Structure (North America), 2008
    • VoIP Access Service Market: Relative Service Provider Market Positioning (North America), 2008
    • VoIP Access Service Market: User Forecasts (North America), 2007-2014
    • VoIP Access Service Market: Revenue Forecasts (North America), 2007-2014
    • VoIP Access Service Market: Percentage of Users by Trunking vs Line-Side Implementations (North America), 2007-2014
    • VoIP Access Service Market: Percentage of Users with Direct SIP Trunking vs VoIP Access Where Protocol Conversion is Required (North America), 2007-2014
    • VoIP Access Service Market: Addressable Market Opportunity (North America), 2008 & 2014
    • VoIP Access Service Market: Average Revenue per User (North America), 2008
    • VoIP Access Service Market: Market Drivers Ranked in Order of Impact (North America), 2009-2014
    • VoIP Access Service Market: Market Restraints Ranked in Order of Impact (North America), 2009-2014
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