Delays in spending on next-gen voice due to jitters
Lingering doubts and other barriers, like product maturity and interoperability, combined with undeveloped business models for new services, are keeping next-generation voice equipment spending on hold, according to a recent study by Infonetics Research.
Even though service provider expenditures are shifting from TDM to packet, capex is being cut or held flat, Infonetics found. Regional Bell operating companies, for example, are expected to spend $23.3 billion in 2003, a 9% drop from their 2002 capital expenditures, according to the research firm.
Also, the notoriously long selection process of service providers, combined with the relative immaturity of next-gen voice equipment, will hinder spending in the near term, the firm found.
The Infonetics study is based on interviews with 29 service providers, 23 of which are in North America. They include 10 competitive local exchange carriers/ISPs, six incumbent local exchange carries (ILEC) – including three of the four RBOCs – three independent operating companies, two interexchange carriers (IXC) and two multiservice operators (MSO). Six European carriers were also queried: three incumbents and three competitive service providers.
Infonetics found that 7% of the respondents stopped investing in their TDM voice switch network already; and that another 37% plan to stop by 2005. At an average of 90% of total traffic, TDM is still the dominant technology for voice traffic but that will drop to 82% in 2004, the firm found.
Infonetics also found that the most popular next-gen voice application today is Internet or Primary Rate Interface offload. But IP multimedia services, one of the least-used applications now, is expected to be the leading application in 2004.
The biggest spenders on next-gen voice will be North American ILECs, IXCs, and MSOs and European incumbents. Product expenditures in North America will grow about 370% between 2003 and 2007, from $533 million to $2.5 billion.
European expenditures will grow 279% over the same time period, from $380 million to $1.36 billion, according to Infonetics.
