VoIP gateway market heads for $1bn growth

But differences in technology are leading to confusion

Robert Jaques, vnunet.com 27 Jan 2005

The global service provider VoIP gateway market is expected to reach $985.7m by 2009, compared with $165.3m in 2003, newly published research has predicted.

According to the latest study from Research and Markets, the VoIP gateway market will grow at a steady rate over the next four years as firms replace digital proprietary voice switching systems with converged IP technology.

The report noted that VoIP can be implemented in two ways: calls can originate from the traditional Time Division Multiplexing (TDM) circuit switched technology, or from an internet protocol router.

It goes on to point out that IP to TDM and TDM to IP VoIP are very different. "These fundamental differences in technology referred to by the same term (VoIP) have confused the market, with distinctly different products being positioned as VoIP solutions," the study said.

"In the near term, routers will be the bases for originating VoIP calls implementing IP to TDM. IP to TDM will quickly become the entire market.

"TDM to IP call origination is outdated and far more expensive. The implementation of broadband in the home will hasten the desire to originate calls directly from an existing internet connection."

According to the analyst firm, the multiple IP-to-IP gateway Cisco IOS software images are used to implement VoIP that originates calls from an IP connection and connects to the existing TDM traditional switched networks after call origination.

"Feature licences are priced based on the platform and processor used. Ports per se do not exist in a system that originates VoIP from the router," said the report.

"Ports are virtual, and dependent on the capacity of the network. The larger the performance capability of the gateway, the greater the price of the feature licence."

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