VoIP booms while telecoms struggle

The telecom sector may be downgrading but sales of enterprise VoIP and IP equipment continue to surge. All the IP phone vendors are reporting bullish activity and industry analysts say they are seeing 200-seat deals coming across their desk regularly. Garrett Smith reviews many IP systems and says if resellers are not gearing up they are missing a major opportunity. "The phone-system deals are getting larger, easier to close and the margins are the best they have been in years," says Smith in his blog. "The market is hot and I can't wait to see just how hot it will get!"

The reports of strong activity coincide with figures showing a 31 percent increase in VoIP enterprise sales in 2007. At the same time, traditional telephony gear witnessed a 20 percent fall. Global Sources reported a combined revenue of $4.26 billion from IP PBX sales and converged PBX sales. This was the first time IP spend exceeded traditional PBX revenue of $4.12 billion.

The boom in IP spending contrasts with the struggle major vendors, and to a lesser extent the big carriers, are having as convergence and the inexorable shift to software-based systems dramatically changes industry structures. Both Verizon and AT&T this week suffered downgrades as analysts factored in tempered broadband and cellular revenue growth as well as the impact of a slowing economy. The downgrades came despite strong Q4 performances and "more of the same" market guidance.

For more:
- VoIP phone system sales are booming Blog [1]
- Enterprise IP is also booming Article [2]

Related articles:
U.S. telecom giants downgraded Report [3]
Ericsson cuts 4000 jobs Report [4]