Carrier Evolution

Some 10 years ago, some executives might have been forgiven for believing that U.S. cable TV operators would not be much of a force in either the enterprise or small and mid-sized business VoIP and IP telephony markets. At this point there is less room to make those arguments.

In the hosted VoIP and unified communications services market, Comcast is ranked number one by Infonetics Research. Comcast earned a high overall score of 33 out of 35 for hosted VoIP services; West, Verizon, and 8×8 are also among the top hosted VoIP providers in North America, says Diane Myers, principal analyst for VoIP and IMS at Infonetics Research.

At least in part, Comcast’s performance is attributable to its acquisition of New Global Telecom,
which had been the perennial leader in our business VoIP scorecards, says Myers. There might be more reason to debate cable success in the enterprise market,

But there is much less reason to doubt cable operator ability to sell services to small business customers.

Hosted IP telephony installed seats in the North American SMB market were predicted forecasted to grow from 393,967 in 2006 to about three million seats by year 2010, according to AMI-Partners.

But most of the actual revenue from IP voice has been in the consumer markets. In early 2012, U.S. hosted PBX revenue was about $500 million annually, but that revenue will grow to about $1.2 billion by 2015, Insight Research predicted. .

Some might note that this is not a lot of revenue in a communications industry with the size of the U.S. market, representing wireless revenue of about $335 billion, while fixed network revenue will be about $176 billion, for a total of about $511 billion, annually, according to Telecommunications Industry Association estimates.

“The hosted PBX/VoIP service providers had only garnered less than four percent of the small business lines (seats) as of year end 2010,” Insight Research says. “This low penetration level, can be attributed to the lack of knowledge about the cost and functionality benefits of hosted PBX or VoIP services among the business community.”

Insight Research Corp. analysts apparently believe that understanding will grow, and so will acceptance. In fact, Insight expects a compounded annual growth rate of almost 25 percent between 2012 and 2015.

Growth of the whole market to about $1 billion by 2015 is within the bounds of reason, one might argue. In 2012, U.S. enterprises will spend about $1.7 billion on unified communications services, for example, after more than a decade of sales activity. So growth to about $1 billion annually wouldn’t be unrealistic.