> Broadband Gear Report's VoIP Alert for December 14, 2006

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VoIP Rollouts and Equipment Sales Move at a Healthy Clip

Fresh in everyone's minds is the lavish irrationality of a few years back that led to the dot-bomb implosion. The result was that many of the hot dot-coms quickly became dot-gone. Cable, like all "high tech" industries, suffered in the Wall Street aftermath as some cable companies were forced into layoffs, and HFC vendors endured a drought and sluggish sales.

So it's no wonder, and pretty smart, that while the cable industry is enjoying its recent VoIP successes, it also is keeping a steady eye on how it can continue to practically and reasonably roll out IP telephony.

Equipment Sales

Keeping that solid VoIP sensibility in mind, both vendors and ops will be interested in recent Infonetics Research reports that show gains in the carrier VoIP/IMS market and the enterprise telephony market in the third quarter of 2006.

"The service provider next-gen voice market is robust and healthy, with none of the extravagance that led to the telecom crash of 2000–2002, pointing to a sustainable investment cycle," Infonetics Research Principal Analyst Stéphane Téral, says. "All segments but soft-switches showed gains in the third quarter."

According to the "Service Provider Next Gen Voice and IMS Equipment" report, worldwide service provider next-gen voice and IMS equipment sales are up 4% sequentially and 26% year over year. The market is expected to more than double between 2005 and 2009, from $2.5 billion to $5.8 billion.

"Some notable movers and shakers this quarter include Nortel, which recaptured its leadership position in the $2.8 billion media gateway and soft-switch market; Cisco, which is making serious inroads into the media gateway market and is now second in the media gateway/soft-switch market; and Sonus, which has a strong book of tier 1 customers and is considered by many the go-to manufacturer for pure-play," Téral adds.

Infonetics' research includes the following findings and predictions:

The media gateway segment is up 11% quarter-over-quarter and 45% year-over-year
The session border controller segment grew 8% QoQ and up 102% YoY
As more traffic becomes IP, soft-switches will increase their share at the expense of media gateways
The number of worldwide residential and SOHO VoIP subscribers nearly doubles between 2005 to 2006 to over 47 million

On the revenue leaderboard:

Cisco had another big quarter for trunk media gateway sales, up 22% to maintain the lead they grabbed from Sonus the previous quarter
Nortel leads in worldwide soft-switches
Acme Packet leads in the fast-growing session border controller (SBC) segment
RadiSys is the worldwide leader for media servers
Broadsoft leads in voice application servers

VoIP Subscriber Growth

In other growth news, U.S. subscribers to VoIP services blossomed 18% to 8.2 million in the third quarter, but the growth rate slowed for a second straight quarter, according to the research firm TeleGeography.

VoIP revenues for the second quarter were up about two and a half times -- $732 million across the United States, compared with a year-ago level of $298 million.

Vonage remained the biggest provider with 1.95 million subs. Time Warner Cable came in at close second at 1.64 million. Comcast moved into third place with 1.35 million, and Cablevision had 1.10 million.

TeleGeography predicts the market would grow by about 1.5 million subs in the fourth quarter to end the year with 9.7 million, or about 8.7% of the nation's households. Revenues are expected to approach $2.6 billion for the year, or more than 2.5 times the 2005 total of just over $1 billion.

Gear Watch

Who's Buying What

TV Cabo, Portugal's largest pay TV op, selected the ARRIS C4 CMTS for its network upgrade. "The C4 CMTS' wire-speed processing capabilities are important to reliably deliver VoIP packets," says ARRIS Senior VP of Sales Claudio Cerioli. "Additionally, its QoS mechanisms offer TV Cabo the highest call quality and completion metrics in the industry and will provide TV Cabo with the head end platform they need to drive their VoIP rollout."
VOO, a joint venture of Brutele and ALE Teledis in Belgium, will use the integrated Cedar Point SAFARI C³ system to deliver residential and business telephone services to their existing 700,000 cable TV and Internet customers in Brussels and the Wallonia region.

B.A.S.E. Technologies, a Cedar Point reseller and support partner for the European market, assisted Cedar Point in the completion of the agreement.
R Cable y Telecomunicaciones, a cable operator in Spain's Galicia region, is delivering a suite of voice, multimedia and advanced IP services, including telephony, video and instant messaging, to business and residential customers using a carrier VoIP solution from Nortel. R's new services portfolio enables business customers to outsource their communications, enhance productivity and prepare for fixed mobile convergence, while residential customers can select from a range of new voice and multimedia services.

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