This publication has been discontinued on July 19, 2011.
Research Overview
IP Network Advancement Limits Demand for Traditional Voice Services within Wireline Voice Services Market
Internet Protocol (IP) enables the convergence of voice and data, integration of multiple channels, centralized reporting function, and allows telecom vendors to offer many other value-added features in a single package, thereby steering voice traffic away from switched networks to IP networks. Apart from lowering costs, the IP-based models are set to replace access and private lines with virtual private networks (VPNs), endangering the time division multiplexing (TDM)-based wireline voice services. The shift in demand from traditional, disparate TDM-based networks/services to IP services is likely to have a negative impact on the growth of traditional local voice services thereby affecting service providers' revenues, access lines, and profitability.
This Frost & Sullivan research service analyzes the North American enterprise TDM-based wireline voice services markets. The study provides insights into the drivers for this market along with challenges faced by the vendors and recommendations to overcome them. Detailed revenue analysis includes a breakdown by service type while market forecasts include both the U.S. and Canadian markets.
Declining Prices for TDM-based Domestic and International Voice Services to Promote their Usage
Service providers are offering flat rate long distance (LD) plans to businesses that provide either unlimited or large volumes of transaction for a fixed monthly charge. An increase in competition combined with bundling and alternative mediums (wireless and VoIP) have compelled TDM-based voice services providers to substantially reduce per minute rate for business LD carriers, which was always higher than residential rates.
"The average domestic LD rates in the United States have dropped from 15 cents a minute in 1992 when promotions and bundling were introduced to nearly 6 cents currently," says the analyst of this research service. "International LD rates have also been falling due to the deregulation of the global telecommunications sector, which is leading to a decline in terminating costs." Such drastically reduced prices are going a long way in promoting the usage of traditional wireline local and long distance voice services.
TDM-based Voice Services to Dominate the Enterprise Voice Service Markets in the Short-Term
Despite aggressive marketing from telecom carriers, the adoption rate of IP telephony among enterprises is limited. This market is dominated by traditional TDM-based voice services in terms of the number of customers, revenues, and traffic (minutes of use). However, this trend is not likely to continue in the long-term, as VoIP services, due to technological advancements that enhance service quality, are expected to make inroads into the business segments for local and long distance voice services. This could lead to a significant erosion of revenue for the TDM-based wireline voice services market.
"However, the overall rate of decline is expected to remain relatively low over the next 24 months due to limited VoIP adoption among small, medium, and large organizations," concludes the analyst.
Frost & Sullivan Growth Partnership Service
Based on extensive and in-depth research, real-world consulting work, and new theories tested in hundreds of companies across many industries, Frost & Sullivan has evolved its Growth Partnership Services (GPS) program that provides established and emerging firms with powerful growth visions. Moving beyond token mission statements, GPS provides an actionable vision to growth consulting partners by illustrating how key intelligence and strategic research based on defined goals can guide day-to-day behavior and overall company direction. The foundation of Frost & Sullivan's GPS includes:
- Assisting companies to reach their full potential in the core business
- Providing growth strategies to help companies expand into related businesses
- Preemptively redefining the core business during market turbulence
- Applying the Frost & Sullivan framework to identify and address common mistakes resulting from misaligned corporate strategies
- Recommending growth management strategies through continuous partnership
To maximize the potential for growth within a firm's internal and external environment, Frost & Sullivan consultants can facilitate the creation of strategic programs that deliver improved market success. Frost & Sullivan's strengths lie in combining strategic understanding with market expertise and applying these with absolute commitment to its clients' growth.
Benefits of this Service
Provides an Extensive Understanding of the Enterprise Voice Service Sector's Challenges and Drivers
Understanding of business challenges will help TDM-based voice providers to better position their products. In essence, effective understanding of business challenges is a key to offering customized solutions to enterprise customers.
Provides Breakdown of TDM-Based Voice by Various Service Types
The study provides extensive breakdowns of revenues and traffic for various TDM voice services. This information can help providers make informed decisions regarding marketing of traditional services.
Offers Market & Competitive Outlook for Various TDM Voice Services
The research highlights key market and competitive trends influencing the traditional voice services markets. The study also includes extensive discussion of regulatory changes that are re-shaping the competitive landscape within enterprise TDM-based voice services markets.
Detailed Industry Segmentation and Business Analysis is Also Valuable for the Investment Community and Consultants
The study provides detailed industry segmentation including local, long distance, toll-free, and audio-conferencing services markets.
End-User Analysis for Various Wireline Voice Services will Help Providers Understand Buyer Behavior
The analysis highlights various adoption and implementation trends for IP-based voice services within the enterprise markets. In addition, the toll-free section provides a breakdown of service usage by various business verticals such as retail, manufacturing, and financial segments.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- TDM-Based Voice Services
- Enterprise Local Voice Services
- Enterprise Long Distance Voice Services
- Toll free services
- Audio Conferencing Services
What's Included
- TDM-based voice services revenues and traffic forecasts (local, long distance, toll-free, and audio-conferencing)
- Market trends
- Competitive trends
- Domestic and international LD and toll-free revenue and traffic projections
Table Of Contents
1. Local Voice Services Markets
- 1. Executive Summary
- 1. Summary of Research Findings
- 2. Research Scope
- 2. Local Voice Services Overview
- 1. Market Overview
- 2. Market Challenges
- 3. Market Drivers
- a. Large Installed-Base of Switched Access Lines Continues to Provide Significant Cash Flows to Local Exchange Carriers
- b. Unclear VoIP Value Proposition Helps TDM-Voice Services Retain a Bigger Share of the Business Local Voice Market
- c. VoIP Reliability Concerns Help TDM-Based Voice Vendors Dominate Enterprise Local Voice Markets
- d. Limited Capex Spending by Enterprise Customers Hinders IP Adoption
- e. Growing Industry Consolidation Helps Reduce Pricing Pressures in the Local Voice Market
- 3. Local Voice Services Forecasts
- 1. Market Forecasts and Analysis
2. Long Distance Voice Services Markets
- 1. Long Distance Voice Services Overview
- 1. Market Overview
- 2. Market Challenges
- 3. Market Drivers and Restraints
- a. Market Drivers
- i. Flat Rate Calling Plans for Businesses Spur the Growth in Usage of LD Services
- ii. Falling Per Minute Prices for Both Domestic and International LD Promote LD Demand
- iii. Growth in International Business Promotes Demand and Revenues for International LD Voice Services
- iv. Bundling Increases the Viability of Switched Wireline LD Voice Services
- v. Businesses in Most Industries Will Continue to Use Toll-Free Services for Customer Support and Other Activities
- vi. Telecommuting and Remote Offices Will Drive LD Market Revenues
- b. Market Restraints
- i. Intense Competition among Incumbents and New Entrants Translates into Reduced Revenues for Wireline LD Services
- ii. Declining Prices for Both Domestic and International LD Restrict Revenue Growth
- iii. Inexpensive National Wireless Plans Promote Usage of Wireless Among Business Users at the Expense of Wireline LD
- iv. Increasing Number of VoIP Business Plans will Lead to Migration of Traditional LD Voice Demand to IP
- v. Email and Data Services Restrict Business LD Voice Services
- 4. Market Trends
- 5. Product and Pricing Analysis
- 2. Long Distance Voice Services Forecasts
- 1. Market Forecasts and Analysis
3. Toll-Free Services Markets
- 1. Toll-Free Services Overview
- 1. Market Overview
- 2. Market Challenges
- 3. Market Drivers and Restraints
- a. Market Drivers
- i. Toll-Free Services Ability to Provide Round-the-Clock Access without Geographical and Time Restraints Will Continue to Drive Their Demand from End Users
- ii. Rise in Demand for Premium Priced Advanced Toll-Free Features in the Large Enterprise Space Spurs Revenue Growth
- iii. Falling Prices Attract Small and Medium Sized Businesses to Adopt Basic Toll-Free Services
- iv. Rise in Overseas Call-Center Outsourcing Increases the International Toll-Free Revenues
- v. Rising Adoption of Toll-Free Services By Various Market Segments and Emerging Applications Increases Toll-Free Usage
- vi. Longer Hold Time Increases Toll-Free Minutes Used
- b. Market Restraints
- i. Rising Internet Use by End-users is Prompting Businesses to Enhance Web-Based Customer Support Applications Resulting in Reduced Toll-Free Expenditure
- ii. Advanced Routing Techniques Reduce the Need for Multiple Toll-Free Numbers and Shortens Toll-Free Call Duration
- iii. Limited Use of Advanced Toll-Free Features by Small and Medium Sized Businesses Limits Revenue Growth in the Wake of Falling Per-Minute Prices
- iv. Limited Usage of International Toll-Free Services Restricts Growth of Revenues from This Market
- v. Higher Hold Time Results in Frustrated Callers and Shifts Usage from Toll-Free to Online Applications
- 4. Market Trends
- 5. Switched versus Dedicated Toll-Free Services
- 6. Toll-Free End User Trends
- 2. Toll-Free Services Market Forecasts
- 1. Market Forecasts and Analysis
4. Audio Conferencing Services Markets
- 1. Audio Conferencing Services Overview
- 2. Audio Conferencing Services Forecasts
- 1. Market Forecasts and Analysis
5. Conclusion
- 1. Enterprise TDM-Based Voice Services Market Outlook
6. Frost & Sullivan Awards
- 1. Awards
- 1. Frost & Sullivan 2005 Growth Strategy Leadership Award – Business Long Distance Voice Services
- 2. Frost & Sullivan 2005 Product Differentiation Innovation Award - Toll Free Services
List of Figures
Chapter 1
- Enterprise TDM-Based Voice Services Market: Breakdown of Businesses by Employment Size (U.S.), 2003
- Enterprise TDM-Based Voice Services Market: Breakdown of ILECs and CLECs Total End-User Switched Access Lines (U.S.), 2001-2004
- Enterprise TDM-Based Voice Services Market: Breakdown of CLEC Total End-User Switched Access Lines by Platform (U.S.), 2001-2004
- Enterprise TDM-Based Voice Services Market: Total End-User Switched Access Lines (Canada), 2001-2004
- Enterprise TDM-Based Voice Services Market: ILECs and CLECs Switched Business End-User Access Lines (U.S.), 2001-2004
- Enterprise TDM-Based Voice Services Market: Impact of Top Industry Challenges (North America), 2006-2012
- Enterprise TDM-Based Voice Services Market: Key Market Drivers Ranked in Order of Impact (North America), 2006-2012
- Enterprise TDM-Based Voice Services Market: Total Business End-User Switched Access Lines (North America), 2002-2012
- Enterprise TDM-Based Voice Services Market: Business End-User Switched Access Lines (U.S.), 2002-2012
- Enterprise TDM-Based Voice Services Market: Business End-User Switched Access Lines (Canada), 2002-2012
Chapter 2
- Business Long Distance Voice Services Market: Impact of Top Industry Challenges (North America), 2006-2012
- Business Long Distance Voice Services Market: Market Drivers Ranked in Order of Impact (North America), 2006-2012
- Business Long Distance Voice Services Market: Market Restraints Ranked in Order of Impact (North America), 2006-2012
- Business Long Distance Voice Services Market: Select Plans Offered by Major Market Participants (North America), 2005
- Business Long Distance Voice Services Market: Domestic and International LD Demand Forecasts (U.S.), 2002-2012
- Business Long Distance Voice Services Market: Domestic and International Long Distance Forecasts (Canada), 2002-2012
- Business Long Distance Voice Services Market: Domestic and International LD Revenue Forecasts (U.S.), 2002-2012
- Business Long Distance Voice Services Market: Domestic and International LD Revenue Forecasts (Canada), 2002-2012
Chapter 3
- Toll-Free Services Market: Impact of Top Industry Challenges (North America), 2006-2012
- Toll-Free Services Market: Market Drivers Ranked in Order of Impact (North America), 2006-2012
- Toll-Free Services Market: Market Restraints Ranked in Order of Impact (North America), 2006-2012
- Domestic Toll Free Services Market: Total Working and Available Toll-Free Numbers (U.S.), 1996-2004
- Domestic Toll Free Services Market: Distribution of Domestic Working Toll-Free Numbers by Prefix (U.S.), 2001-2004
- Domestic Toll-Free Services Market: Total Domestic Toll-Free Working Numbers Forecasts (U.S.), 2001-2008
- Domestic Toll-Free Services Market: Total Toll-Free Calls with Domestic Origination (U.S.), 2002-2012
- Domestic Toll-Free Services Market: Switched Toll-Free Demand (U.S.), 2002-2012
- Domestic Toll-Free Services Market: Dedicated Toll-Free Demand (U.S.), 2002-2012
- Total Toll-Free Services Market: Domestic and International Demand Forecasts (U.S.), 2002-2012
- Total Toll-Free Services Market: Domestic and International Demand Forecasts (Canada), 2002-2012
- Domestic Toll-Free Services Market: Revenue Forecasts (U.S.), 2002-2012
- Domestic Toll-Free Services Market: Revenue Forecasts (Canada), 2002-2012
