The Advanced Capabilities of VoIP and
SIP Trunking Exceeds Traditional Voice
Services
Research PREVIEW for the
North American VoIP Access and SIP Trunking
Services Market
@FS_ITVision
Sample of Key Highlights
• The voice over Internet protocol (VoIP) access and session initiation
protocol (SIP) trunking services market continues its rise to become the de-
facto communications link from business customers’ premises to service
providers’ networks.
• In 2012, the market grew by 25.9 percent in terms of installed users, and by
26.1 percent in terms of revenue. Revenue is expected to grow by 22.5
percent over the period 2012-2019.
• Consolidation in the VoIP access and SIP trunking services market quieted
down in 2012 compared to the rampant activity of previous years. After a
particularly active 2011, many market participants are focused on
integration of their acquisitions, rather than adding to their holdings.
• Adoption rates stabilized among different customer profiles. Large
enterprises (businesses greater than 500 employees), comprised 32.7
percent of the revenues for the year, with small and medium-sized
businesses (SMBs) making up the remaining 67.3 percent of the customer
base. The ratio between enterprise and SMB remains consistent with 2011
and reflects continued mainstream adoption.Source: Frost & Sullivan analysis.
Executive Summary—CEO’s Perspective
2Hosted IP telephony solutions are the most direct competition to SIP trunking, even internally within service providers.
3Simplification and optimization of deployments will accelerate mainstream customer adoption.
4Competitive differentiation will come from features and flexible options, rather than commodity pricing.
5Mergers and acquisitions that can be quickly integrated are still the shortest path to growth and scale.
Source: Frost & Sullivan
1In this early growth stage, the market focus is on migrating new customers to VoIP, and not competitive churn.
Market Distribution Channels
Total VoIP Access and SIP Trunking Services Market: Distribution Channel Analysis, North America,
2012
Key: VARs: value-added resellers
Source: Frost & Sullivan
Key Takeaway: While most VoIP and SIP trunking providers rely on direct and indirect sales in the retail market, a number of providers also serve the wholesale market to extend reach.
VoIP Access and SIP Trunking Service Providers
End User
Wholesale Sales
Access Trunks For Hosted
Telephony/UC, Contact Center, and
other 3rd party applications
Reseller Sales
VARs, Systems Integrators, and
Consultants Direct Sales
Drivers 1–2 Years 3–4 Years 5–7 Years
Modern unified communication platforms support SIP as
the default PSTN interface, incentivizing customers to adopt
SIP trunking alongside platform refreshes.
H H H
Advanced capabilities including mobility and disaster
recovery enhance the control and value of SIP trunking
services.
M M M
The return on investment (ROI) benefits of IP telephony
migration are pushing businesses to VoIP access and SIP
trunking.
M M M
Growing trust in the quality of VoIP and SIP trunking is
extending the technology past early adopters into
mainstream deployments.
M M M
Future hybrid cloud models will require a break from
physical circuits to dynamic IP-based links.L L L
Impact ratings: H = High, M = Medium, L = LowSource: Frost & Sullivan
Total VoIP Access and SIP Trunking Services Market: Key Market Drivers, North America, 2013–2019
Market Drivers
Restraints 1–2 Years 3–4 Years 5–7 Years
Contract restrictions are limiting customers’ choices,
keeping them locked into existing provider relationships and
TDM deployments.
H M L
Hosted UC solutions offer a compelling alternative to on-
premises systems and SIP trunking.M M M
SIP interoperability concerns and manual processes
complicate enterprise deployments.M M M
Required customer education about the benefits of VoIP
and SIP trunking services limits enterprise adoption.M M M
Aggressive pricing can seriously restrain market revenue
growth.M M M
Impact ratings: H = High, M = Medium, L = LowSource: Frost & Sullivan
Total VoIP Access and SIP Trunking Services Market: Key Market Restraints,
North America, 2013–2019
Market Restraints
Details of the Full Analysis
Contents
Section Slide Number
Executive Summary 5
• Key Findings 6
• Market Engineering Measurements 7
Market Overview 10
• Market Definitions 11
Drivers and Restraints—Total VoIP Access and SIP Trunking Services Market 17
Forecasts and Trends—Total VoIP Access and SIP Trunking Services Market 29
• Demand Analysis—Total VoIP Access and SIP Trunking Services Market 36
Market Share and Competitive Analysis—Total VoIP Access and SIP Trunking Services Market 39
The Last Word 45
List of Exhibits
Figure Slide Number
Total VoIP Access and SIP Trunking Market: Market Engineering Measurements, North America, 2012 7
VoIP Access and SIP Trunking Services Market: Distribution Channel Analysis, North America, 2012 15
Total VoIP Access And SIP Trunking Services Market: Key Market Drivers, North America, 2013–2019 18
Total VoIP Access and SIP Trunking Services Market: Key Market Restraints, North America, 2013–2019 23
VoIP Access and SIP Trunking Services Market: User and Revenue Forecast, North America, 2011–2019 31
VoIP Access and SIP Trunking Services Market: Percent of Users with Native SIP Trunking and VoIP Access with
Protocol Conversion, North America, 2011-201932
Total VoIP Access and SIP Trunking Services Market: Average Annual Revenue Per User,
North America, 2011–201934
Total VoIP and SIP Trunking Services Market: Penetration Analysis, North America, 2011–2019 36
Total VoIP Access and SIP Trunking Services Market: Market Share by Percent of Revenue,
North America, 201340
Total VoIP Access and SIP Trunking Services Market: Competitive Structure, North America, 2012 41
Total VoIP Access and SIP Trunking Services Market: SWOT Analysis, North America, 2012 42
Total VoIP Access and SIP Trunking Services Market: Market Engineering Measurements,
North America, 2012 51
Key Questions This Analysis Will Answer
Is the market growing, how long will it continue to grow, and at what rate?
How is the market impacted by the overall enterprise unified communications market?
How are traditional market participants faring against new challengers?
How will the structure of the market change with time? Is it ripe for acquisitions?
Do current deployment models meet customer needs and how will these models change?
When is the tipping point for VoIP access and SIP services over traditional telecom services?
Source: Frost & Sullivan
Partial List of Companies Interviewed
• 2600Hz
• 8x8
• AT&T
• Comcast
• CenturyLink
• FairPoint
Communications
• Intelepeer
• Level 3
Communications
• Megapath
• MTS AllStream
• Star2Star
• Verizon Business
• West IP
Communications
• Windstream
• XO Communications
Source: Frost & Sullivan research.
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Michael Brandenburg
Industry AnalystInformation &
Communications Technologies
Frost & Sullivan
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Rob Arnold Principal Analyst
Information & Communications
TechnologiesFrost & Sullivan
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