Session Border Controllers Post First Sequential Decline Ever

(Top News, 27 Aug 2008)

Some softness in the otherwise healthy service provider VoIP equipment market materialized in the second quarter of 2008, with the overall worldwide market down 4 percent, led by double-digit percentage declines in the session border controller (SBC) and softswitch segments, according to market research firm Infonetics Research.

Infonetics' report shows that the SBC segment posted its first sequential decline ever, dropping 14 percent from 1Q08 to 2Q08.

Still, the overall market is up 3 percent year-on-year, led by strong gains in the SBC, media server, and softswitch segments.

"While down in the first half of 2008, we expect the carrier VoIP equipment market to bounce back in the second half, ending the year on a positive note. The five-year outlook looks good as well, as demand for VoIP networking gear continues unabated, driven by a long term migration from circuit switched to packet telephony. Similarly, while the session border controller segment saw its first sequential decline this quarter—due to a pause in deployments in North America and Europe where large service providers are maxing out their installed base rather than purchasing new equipment. We expect it to pick up nicely in the second half of the year,¡± said Stéphane Téral, principal analyst for VoIP and IMS at Infonetics Research.

Other highlights from the report include:
- The worldwide service provider VOIP and IMS market is forecast to reach $7.5 billion in 2011, up from $3.9 billion in 2007, with IMS core equipment, particularly HSS (home subscriber servers) and CSCF (call session control function) servers, making up the bulk of the growth
- The voice application server, media server, and overall media gateway segments are all up in 2Q08 from 1Q08
- Voice over broadband (VoBB) continues to be the big driver across the board
- Alcatel-Lucent shook up the worldwide trunk media gateway market with a 173 percent sequential jump in DS0 shipments in 2Q08, propelling the company to the number three spot for both DS0s and revenue (previously number nine and five, respectively)

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