North American VoLTE preparations propel IMS spending

Voice over LTE is keeping providers of IP Multimedia Subsystems very busy, according to separate reports from research firms Infonetics and Exact Ventures.

"In the first quarter of 2012 we saw the largest order of IMS core equipment and application server licenses on record, secured by Alcatel-Lucent (NASDAQ:ALU)--a clear sign that operators in North America are gearing up for voice over LTE (VoLTE) deployments," said Diane Myers, Infonetics principal analyst for VoIP and IMS.

The firm's research showed that North American operators led in carrier VoIP and IMS spending during the first quarter of 2012, with outlays up 76 percent year-over-year. As operators gear up to offer VoLTE over the next five-plus years, "large equipment orders will be sporadic and the IMS market will continue to be lumpy," said Myers.

Exact Ventures said its research revealed the IMS core market in 2012's first quarter nearly tripled year-over-year, due in large part to significant VoLTE deployments in North America.

Clearwire (NASDAQ:CLWR) has said it will offer Voice over LTE technology when it launches its LTE Advanced-ready network by June 2013.  AT&T Mobility (NYSE:T) plans to have VoLTE in place by 2013. MetroPCS (NYSE:PCS) executives have said the company will launch two to three smartphones with Voice over LTE capabilities in the second half of this year. And Verizon Wireless (NYSE:VZ) has said it will deploy the technology in late 2012 but will begin pushing it more broadly in mid 2013.

Alcatel-Lucent led the IMS core market in the first quarter on the strength of early VoLTE deployments in North America, which also benefited Ericsson and Nokia Siemens, Exact Ventures said, noting Alcatel-Lucent topped also the IMS core market during the fourth quarter of 2011, followed by Ericsson (NASDAQ:ERIC), Huawei and Nokia Siemens.

Infonetics' research revealed that globally during the first quarter, Alcatel-Lucent more than doubled its service provider VoIP and IMS revenue and market share, propelling the company to the top position in worldwide, ahead of Huawei and Genband. Myers observed that in addition to VoLTE, other contributors to the strength of the VoIP and IMS equipment market during the first three months of 2012 were continued fixed-line network transformation, fixed-mobile convergence and voice-over-broadband projects using IMS.

Greg Collins, founder and principal analyst at Exact Ventures, said the IMS core market still accounts for only 10 percent of the total--wireline plus wireless--voice core market. "The transition away from circuit switching to an all IP core network based on IMS is just beginning and is expected to last well over a decade," said Collins.

According to Infonetics, the overall service provider VoIP and IMS equipment market rose 18 percent during 2012's first quarter from the year-ago first quarter, despite continued declines in legacy trunk media gateway and soft-switch sales. Growth is being driven by strong IMS core equipment, session border controller (SBC) and voice application server( VAS) sales.

Exact Ventures calculated that during the first three months of 2012, the SBC market increased 15 percent over the prior-year's first quarter, while the VAS market increased 39 percent over the same timeframe. "Legacy soft-switch and media gateway markets continued to contract in the first quarter, due in large part from operators deploying and testing newer IMS solutions," said the firm.

For more:
- see this Infonetics release
- see this Exact Ventures release
- see this Telecompetitor article

Related articles:
Clearwire CTO: We'll offer VoLTE when we launch TD-LTE network
Sprint will deploy LTE-Advanced in the first half of 2013
AT&T's Kris Rinne on the specifics of moving to VoLTE
Report: All flavors of voice over mobile broadband to benefit operators
Interoperability issues aside, OEMs should consider VoLTE as a tool for innovation

Article updated on May 24, 2012, to correctly spell out IP Multimedia Subsystems.