How Much More Growth for SIP Trunking?

How much more growth is left for SIP trunking? Lots more, by most estimates, or more, in other estimates. If 62 percent of the market already has bought, 38 percent more potential customers remain.

If so, then SIP trunking might prove to be the sort of communications product that never sees an inflection point where growth rates accelerate non-linearly.

So far, no inflection point has yet been seen, something many of us would have thought would already have happened, for SIP trunking or hosted IP telephony. Instead, we see slow, steady adoption of hosted IP telephony, for example. That raises the possibility that no inflection point ever will happen. Instead, slow, steady adoption could well be the market growth model.

That is not necessarily a bad thing, but might also suggest the whole SIP trunking and hosted IP telephony space, though important to business users and niche suppliers, is going to motor along in linear fashion, with a slowdown happening maybe sooner than many would have suspected.

It is conceivable that adoption might already be nearing a peak, if it is true that adoption reaches the 60-percent level in 2017.

Business buyers of SIP trunking will be spending about seven percent more in 2017 than they did in 2016, according to the Eastern Management Group. SIP phone purchases might climb as much as 12 percent.

The global regions with the fastest SIP growth are Asia Pacific, the Middle East and Africa. The growth rate in these regions is much stronger than in either the U.S. or Europe, both of which are more mature markets. Eastern Management Group suggests North American adoption rates might see additional growth of  less than four percent in 2017.

SIP trunking might have been about a $3 billion business in the U.S. market in 2015.  Some researchers believe the SIP trunking market could reach $20.7 billion by about 2024.

Cavell Group’s latest IP Voice market reports show unexpected market dynamics, with the SIP Trunking market performing slower than expected and the hosted VoIP market continuing to grow strongly.

The hosted VoIP market has shown 11 percent growth reaching a total of 2,423,123 Business hosted VoIP seats, while the SIP Trunking market has only grown nearly 10 percent  in the last six months to a total of 2,113,528 SIP trunks.

“This is a slowdown in the migration from ISDN to SIP trunking and may show that customers are leapfrogging SIP to move directly to a hosted solution,” Cavell Group notes.

Cost is now the big driver behind today's SIP sales, according to John Malone, Eastern Management Group president.

SIP trunking easily costs 50 percent less than traditional networks. Furthermore, SIP trunk prices are dropping five percent to seven percent annually.
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