This annual report offers a wealth of information on the worldwide development of NGNs, IP and VoIP. Information on a regional level is also provided for the Americas, Europe, Africa, Middle East and Asia Pacific. The report includes analyses, statistics, trends and forecasts. It provides an overview of NGN development, with a focus on IP, including detailed information on the progress of VoIP. The report examines NGNs from an infrastructure perspective, including global telecoms capital expenditure. Information on the global outsourcing sector is also provided.

Subjects covered include:

NGN deployment;
NGNs and infrastructure;
Global telecoms CAPEX;
Analysis of the future of voice;
VoIP market overview, including applications;
VoIP and convergence;
VoIP statistics and forecasts;
Outsourcing sector;
Regional overview.

Executive summary
A huge change is taking place in telecoms infrastructure, with the traditional telephone systems being replaced by an IP-based infrastructure. This will facilitate data communications and file transfers via networked computers. IP is now adapted for voice communications (VoIP) and most corporate users are on IP networks. However, the true value of IP is that it is becoming the core of the next generation public networks (NGNs), facilitating affordable triple play business models that seamlessly integrate voice, data and video. NGN projects are very complex in nature however, and due to this their progress still remains slow. For more information, see chapter 1, page 1.

Once NGNs are in place, there will be a major impact upon current infrastructures. Voice services will be placed under increasing pressure from VoIP and mobile communications will consolidate in mature markets but continue their spectacular growth in developing countries. Wireless broadband will also begin to challenge 3G, as it is much better suited for the delivery of mobile data, including Mobile VoIP. For more information, see chapter 1.2, page 11.

Fixed VoIP is becoming more prominent in corporate and government markets, due to the fact that good NGNs are already in place. In the residential market, VoIP has traditionally been viewed as a ‘hobby’ product linked to the Internet – but this appears to be slowly changing, with residential VoIP subscribers more than doubling in 2006. However, the real breakthrough for VoIP will be when NGN quality broadband networks are delivering triple play business models to the mass market. The uptake of VoIP will further reduce the revenues of telcos and add more pressure on them to seek new revenues streams. Separately VoIP will become an integral product offering in most Internet media products. For more statistics, see chapter 3.4, page 56.

The growing importance of e-commerce has led to a further key trend, where companies are moving away from building and/or maintaining their own networks, and outsourcing to NGN operators. With an increase in data services both in the business and the residential market, the market for outsourcing and other forms of external assistance will continue to grow. Based on convergence developments around IT and telecoms and driven by broadband, a significant growth in outsourcing starting to emerge. The overall outsourcing sector is expected to grow by around 8% in 2007. For more information on outsourcing, see chapter 4, page 63.

In recent times the telecom space has become a key focus for many of the IT vendors, and some services firms have developed specialist areas aimed at attracting and capturing telecoms outsourcing deals. Cost savings are still the major driver to outsource, but improvements in quality are increasingly becoming a key reason.

This report provides a global overview on the progression of NGNs, with a focus on IP/VoIP. It also includes information on the developments taking place regionally across the Americas, Europe, Africa, Middle East and Asia Pacific. The report provides analyses, statistics, forecasts and trends.

Key highlights:
Already around 50% of all global telecoms traffic is done over IP, and this will increase to 75% in a few years time.
A modest growth in telecoms capital expenditure is expected over the next three years; capital expenditure for NGN’s will focus on broadband/triple play expansion plans. For more information on telecoms CAPEX, see chapter 1.1, page 1.
Managed services, the use of specialist third parties to deliver IT services, is set to increase significantly over the next five years.
An increase in VoIP subscribers has usually been driven by mass-marketing efforts by the incumbents, and the inclusion of VoIP in double/triple play models. This has been witnessed in France and the Netherlands. For more information, see chapter 3.2, page 40.
While we have not witnessed a major move towards VoIP to date, 2006 did see an increase in users in the residential market.
Worldwide residential VoIP subscribers – 2005 - 2006; 2009

Year (e) Approximate subscribers (million)
2005 20
2006 39
2007 135

Skype is still the global market leader, with over 170 million registered users; around 30% of these are business users.
The market for VoIP equipment is growing at around 25% per year. For more VoIP statistics and forecasts, chapter3.4, page 56.
The future of VoIP lies in video webconferencing. Web-based videoconferencing is presently one of the largest growth markets. Pent-up demand has been building for decades, and while services have been launched in the past, both the technology and the economics failed to deliver a compelling product for users.
In terms of VoIP subscribers, Japan led the VoIP market in 2006 with almost 14 million subscribers, followed by the USA and France.
The growth of NGNs in Asia is mostly focused on the developed markets and has been heavily dependent on the local support provided by the governments in those markets. For more information, see chapter 5.5, page 93.
VoIP is continuing to gain ground in Africa following deregulation, steady improvements in Internet bandwidth and a growing number of service providers entering the market. Telkom South Africa is planning to invest $5 billion into its NGN over the next five years. For more information, see chapter 5.3, page 79.
One of the drivers behind NGN deployments in the US is VoIP, which has become one of the fastest growing US telecommunication sectors, boasting growth rates of around 150% in 2006. For more information, see chapter 5.1, page 70.

1. NEXT GENERATION NETWORKS
1.1 NGN overview and development
1.1.1 Introduction
1.1.2 NGN growth and development
1.1.3 Nextgen telcos – analysis
1.1.4 NGN deployment examples
1.1.5 NGN investment strategies
1.2 NGNs and infrastructure
1.2.1 Infrastructure competition
1.2.2 Narrowband services
1.2.3 Mobile infrastructure
1.2.4 Broadband infrastructure
2. THE FUTURE OF VOICE (FIXED, MOBILE, VOIP)
2.1 Telephone companies – experts in negative marketing
2.1.1 Don’t use the phone
2.1.2 Don’t use the mobile phone
2.1.3 Don’t use the fixed phone
2.1.4 The IP solution
2.2 The future of voice
2.2.1 Market under pressure
2.2.2 Rearguard skirmishes in the voice market
2.2.3 A neglected market
2.2.4 Recent developments
2.3 The future of mobile
2.3.1 Voice still the killer app
2.3.2 But data is the future
2.3.3 Rebalancing of the industry
2.3.4 Devices-driven developments
2.3.5 Only option in developing countries
2.3.6 Multimodal services
2.4 All roads lead to 4G
2.5 VoIP
2.6 Analysis of vendor merge – the future is IT, not telco
2.7 Pricing strategies
2.7.1 Telecoms price developments
2.7.2 From bundling to triple play
2.7.3 New ways to measure ARPUs
2.8 Conclusion
3. VOIP
3.1 VoIP overview
3.1.1 Historic overview
3.1.2 Key trends and developments
3.1.3 Alternative providers
3.1.4 International carriers’ traffic Grows
3.1.5 VoIP regional market overview
3.2 VoIP analysis
3.2.1 The continuing importance of voice
3.2.2 Give VoIP a chance
3.2.3 Corporate markets
3.2.4 Industry issues
3.2.5 Regulatory issues
3.2.6 Security considerations
3.3 VoIP and convergence
3.3.1 NGNs: converging networks
3.3.2 IP=IT
3.3.3 IP - enhanced services
3.3.4 IP is making data market redundant
3.3.5 IP is upsetting the telcos
3.3.6 Technology and communication
3.4 VoIP statistics & forecasts
3.4.1 Statistics and forecasts
3.4.2 IP equipment statistics
3.4.3 VoIP revenue statistics
3.4.4 VoIP operator subscriber statistics
3.4.5 VoIP and the business sector
4. OUTSOURCING
4.1 Managed Network Services (MNS)
4.2 Outsourcing
4.2.1 Outsourcing, cosourcing, insourcing, tasksourcing
4.2.2 Outsourcing market statistics for 2006 and beyond
4.2.3 Outsourcing market statistics for 2005
4.2.4 Outsourcing market statistics for 2004
4.2.5 Historical overview
4.3 IP Centrex or VoIP outsourcing – the battle for the SME market
5. REGIONAL OVERVIEW
5.1 North America
5.1.1 USA
5.1.2 Canada
5.2 Latin America
5.2.1 Introduction
5.2.2 IP and VoIP in Latin America
5.2.3 NGNs in Latin America
5.3 Europe
5.3.1 Western Europe
5.3.2 Eastern Europe
5.4 Africa/Middle East
5.4.1 Africa
5.4.2 Middle East
5.5 Asia
5.5.1 Market overview
5.5.2 Japan
5.5.3 South Korea
5.5.4 China
5.5.5 Singapore
5.5.6 Taiwan
5.5.7 India
5.5.8 Hong Kong
5.5.9 Malaysia
5.6 Pacific region
5.6.1 Australia
5.6.2 New Zealand
6. GLOSSARY OF ABBREVIATIONS


Exhibit 1 – Worldwide IMS deployments – mid-2006
Exhibit 2 – Nextgen telecoms
Exhibit 3 – Global outsource market services
Exhibit 4 – What is IMS?
Exhibit 5 – VoIP issues
Exhibit 6 – Regulator attitudes to VoIP
Exhibit 7 – ITU-T definition of a Next Generation Network
Exhibit 8 – IP-based enhanced services
Exhibit 9 – Top ten technologies that will impact communication
Exhibit 10 – Comparative advantages of outsourcing and insourcing
Exhibit 11 – Mobile outsourcing agreements – 2005
Exhibit 12 – Regulatory status of VoIP in selected Latin American countries – 2007
Exhibit 13 – Telstra’s NGN planned implementation time-line




Table 1 – IMS based services subscribers – 2007; 2011
Table 2 – Global telecoms capital expenditure – 2006; 2010; 2015
Table 3 – Global telecoms revenues – 2006 - 2008
Table 4 – Worldwide residential VoIP subscribers – 2005 - 2006; 2012
Table 5 – Regional residential and SOHO VoIP subscribers – 2006; 2009
Table 6 – Estimated growth of inbound VoIP traffic 2005 – Africa; Latin America; Asia-Pacific; Middle East; Eastern Europe
Table 7 – Worldwide VoIP equipment revenue – 2006 - 2010
Table 8 – VoIP service revenues for North America, Europe, Asia Pacific – 2005; 2009
Table 9 – Number of registered users/subscribers for selected VoIP operators – 2005 - 2006
Table 10 – Global switched and VoIP traffic versus Skype – 2005 - 2006
Table 11 – Number of global outsourcing contracts – first quarters 2004 - 2006
Table 12 – US jobs going offshore – 2003 - 2008; 2010; 2015
Table 13 – Japan VoIP subscribers and market share by operator – 2006
Table 14 – Japan – standard versus IP phone services (subscribers & annual change) – March 2007