Infonetics: VoIP equipment down, capex spending not so much

A pair of reports by Infonetics Research reports that large carriers are scaling back on VoIP equipment purchases by 8 percent in 3Q08, with total capex spending expected to be down around 2 percent in 2009.

Even as service providers spent $816 million on VoIP marketing spending in 3Q08, sales for high-density media gateways experienced a steep decline, and the softswitch market dipped as well in the quarter. The good news is that sales of SBCs and media servers are both up, with softswitches, SBCs and media servers seeing year-over-year growth from 2007.

U.S. carriers were always slowing down their VoIP spends after completing major projects, while in Western Europe and some parts of Asia, inventories were already high. Infonetics predicts that new VoIP projects will be postponed or canceled as more consumers ditch their landlines. The research firm expects a two year pause in the overall carrier VoIP space, with a pick-up coming in 2011.

Turning to the worldwide service provider capex report, sales are on track to reach $275 billion in 2008, up 10.5 percent from the previous year. However, most of the growth is anticipated due to currency appreciation against the U.S. dollar, which peaked back in July. Overall, Infonetics sees a 2 percent downturn in worldwide carrier capex in 2009, led by big cuts by service providers in the Asia Pacific region. The following year - 2010 - is expected to be flat with a slow return to growth due to the start of a new investment cycle.

The good news is most service providers have clean balance sheets, having already adjusted their books after the dot.com binge died and forced deep "double-digit" capex cuts. This time around, North America, EMEA and CALA are expected to have low to mid single-digit cuts, while there's likely to be "steep" double-digit capex cuts in Russia and Asia Pacific.

For more:
-  Infonetics talks about service provider VoIP and carrier capex.

Related articles
Gartner sees telecom spending up despite economy - FierceTelecom