Telecom Industry Association Predicts Uptick in IP Market

Despite a decline in IP revenues over the past two years due to rapid price declines, the Telecommunications Industry Association (TIA) predicts that total IP revenues will grow in 2004 by 7.8%, achieving a total of $13.9 billion.


TIA's newly released 2004 Telecommunications Market Review and Forecast notes that in 2003, IP accounted for the majority (58%) of network traffic for the first time. The study predicts that the U.S. IP traffic will rise by a factor of more than six, increasing to 1,633 petabytes per month in 2007, a 58.3% compound annual increase (2004-2007).


"The rapid growth of IP traffic on the network -- 75 percent in 2003 -- clearly indicates that the migration to IP is in full swing. We are therefore pleased that the FCC is addressing the issue as a national priority and acting this week to begin to clarify the regulatory issues surrounding IP applications such as VoIP," said Matthew J. Flanigan, TIA president.


The report also predicts the IP market will reach $18.7 billion in 2007, with a 9.7% compound annual growth rate from 2004 to 2007. This projected growth reflects that companies are beginning to migrate to convergence technologies to enhance productivity, reduce costs and upgrade the enterprise network to accommodate new applications and technologies.


IP applications revenues are expected to grow even faster. IP revenues for audio conferencing, videoconferencing, Web conferencing, follow-me services, unified messaging and instant messaging totaled $1.5 billion in 2003, more than twice the $696 million of 2002. Revenues will increase to a projected $11.4 billion by 2007, a 66.5% compound annual growth rate.


The 2004 Telecommunications Market Review and Forecast is available in hard copy or on CD-ROM from TIA. http://www.tiaonline.org/media/mrf.cfm