Study: IP-based Centrex revenue to spike

The market for hosted IP telephony and integrated access services with Centrex features will increase to $7.8 billion by 2009 from $61 million last year, according to a study released today by Frost & Sullivan.

The emergence of new business models, as well as the compelling value proposition to businesses of both services, is driving service providers of all types to delve into the market faster than ever, said Elka Popova, a Frost & Sullivan analyst and the author of the report. However, for those already in the market, organic growth has been relatively slow.

“We’re seeing a very rapid emergence of service providers offering hosted IP Centrex globally,” she said. “At the same time, I’m seeing very slow growth of the existing ones. Most of the growth in this market is coming from the entry of new service providers.”

In Europe, the Middle East, and Africa, for instance, only about 4% of all access lines are served by IP Centrex (with a softswitch), Centrex IP (with an IP-enabled Class 5 switch) or integrated access with Centrex features. At the same time, the entry of large carriers, particularly the RBOCs in the U.S., will increase that percentage.

“In terms of hosted IP telephony and integrated access, the RBOCs will keep gaining marketing share and they will be the dominant players, if not in the near term than in the next two years,” Popova said. “They certainly have a lot of traction in the large enterprise space. With the introduction of IP Centrex, that will help them in the smaller businesses.”

Additionally, the development of new applications that can only be served in an IP environment, such as unified messaging and voice dialing, will attract more users from the circuit-switched world, according to Popova.

“I think IP telephony in general and hosted IP telephony specifically is opening up new opportunities for service providers.”