Total IP Revenues Forecast To Increase

TechWeb News - February 10, 2004

Total revenues from Internet protocol services and technology are expected to reach $13.9 billion this year, a telecommunications trade group said Tuesday.

Revenues from IP applications, including audio conferencing, videoconferencing, Web conferencing, 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 percent compound annual growth rate.

IP revenues are expected to jump by 7.8 percent compared to last year, following a two-year decline that was due to decreased prices, the Telecommunications Industry Association said. The IP market is forecast to reach $18.7 billion in 2007, increasing at a 9.7 percent compound annual growth rate.

IP backbone traffic has increased over the last several years, accounting for 58 percent of network traffic in 2003, the TIA said. U.S. IP traffic is expected to increase at a 58.3 percent compound annual growth rate through 2007, reaching 1,633 petabytes per month.

"The rapid growth of IP traffic on the network—75 percent in 2003—clearly indicates that the migration to IP is in full swing," TIA President Matthew J. Flanigan said in a statement.

This projected revenue growth reflects that companies are beginning to migrate to IP networks to enhance productivity, reduce costs and accommodate new applications and technologies, such as voice over Internet protocol (VoIP) communications, the industry group said. Carriers are now building IP overlay networks with gateways for transport to and from legacy voice and data networks.