Business Editors/High-Tech Writers

ARLINGTON, Va.--(BUSINESS WIRE)--Feb. 10, 2004

Migration to IP Technologies, Such as VoIP, Driving Growth of Enterprise Applications

Total Internet protocol (IP) revenues are expected to grow in 2004 by 7.8 percent, achieving a total of $13.9 billion, according to the newly released TIA's 2004 Telecommunications Market Review and Forecast, an annual publication of the Telecommunications Industry Association (TIA).

Although IP revenues declined over the past two years due to decreased prices, IP backbone or core traffic has grown and the market is beginning to take off. In fact, in 2003, IP accounted for the majority (58 percent) of network traffic for the first time. The study predicts that the U.S. IP traffic will rise by a factor of more than six, increasing to 1,633 petabytes per month in 2007, a 58.3 percent compound annual increase (2004-2007).

"The rapid growth of IP traffic on the network -- 75 percent in 2003 -- clearly indicates that the migration to IP is in full swing. We are therefore pleased that the FCC is addressing the issue as a national priority and acting this week to begin to clarify the regulatory issues surrounding IP applications such as VoIP," said Matthew J. Flanigan, TIA president.

"In order for the IP market to grow and for service providers as well as enterprises to take advantage of the flexibility, cost-efficiencies and convergence capabilities of IP networks, we believe regulation should be very minimal, as we noted in TIA's Principles for VoIP and the Public Interest (http://www.tiaonline.org/media/press_releases/uploads/voippolicy.pdf) statement released last week," Flanigan said.

The report also predicts the IP market will reach $18.7 billion in 2007, with a 9.7 percent compound annual growth rate from 2004 to 2007. This projected growth reflects that companies are beginning to migrate to convergence technologies to enhance productivity, reduce costs and upgrade the enterprise network to accommodate new applications and technologies. Voice over Internet protocol (VoIP), for example, is both a driver and beneficiary of broadband connectivity and may provide cost savings to both carriers and enterprises. Carriers are now building IP overlay networks with gateways for transport to and from legacy voice and data networks.

IP applications revenues are expected to grow even faster. IP revenues for audioconferencing, videoconferencing, Web conferencing, follow-me services, 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.

TIA's 2004 Telecommunications Market Review and Forecast provides an overview of telecom's interrelated market segments including network services, enterprise and consumer, mobile and wireless communications, and international markets. It's available in hard copy or on CD-ROM. To order, please visit http://www.tiaonline.org/media/mrf.cfm or call (703) 907-7074. To obtain a press copy of the report, please contact Jennifer Mead at (703) 907-7723 or email jmead@tiaonline.org.

The Telecommunications Industry Association (TIA) is the leading trade organization serving the communications and IT industry, with proven strengths in standards development, domestic and international public policy, and trade shows. Through its worldwide activities, TIA facilitates business development opportunities and a competitive market environment. The association provides a forum for its member companies, the manufacturers and suppliers of products and services used in global communications. TIA represents the communications sector of the Electronic Industries Alliance (EIA). Visit us at http://www.tiaonline.org.