IP Switching and Converged Network Drives Market for Signaling Gateways

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BOONTON, NJ. July 25, 2000:

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The migration of U.S. telecommunications from analog to a converged digital network will drive the market for signaling gateways, communications devices that act as bridges between dissimilar networks and networking protocols, at a 96.3 percent rate compounded annually through 2004, says a new report by Insight Research.

According to Insight's report Gateways and the Telecom Carrier: Middleware and Mediation Platforms for Next-Generation Networks, the single greatest change in telecom over the next few years will be the migration of carrier networks from analog circuit-switched systems to packet-switched systems capable of handling large volumes of voice and data traffic simultaneously on the same network. Competitive pressures are forcing telecom providers to become more flexible in operating, provisioning, maintaining, and administering their networks and packet switching tends to operate more efficiently than traditional circuit switching when voice and data travel on a single network. Yet incumbent carriers cannot totally replace their existing circuit-switched legacy systems to meet these pressures; instead, signaling gateways will be installed to bridge the gap between the circuit-switched world and the new packet-based networks. Signaling gateway revenue will top $190 million this year, increasing to $2.83 billion in 2004.

"The efficiencies of packet switching when it comes to handling all type of traffic--voice, video, data, static high-resolution images--are well documented," says Robert Rosenberg, president of Insight. "However, the investment in the current circuit-switched PSTN can't be written off tomorrow. Carriers need a migration strategy to reach the converged network and signaling gateways will be one of the key ingredients in that migration path."

Additional data in Gateways and the Telecom Carrier: Middleware and Mediation Platforms for Next-Generation Networks includes four-year forecasts of revenue, shipment, and pricing for ten types of signaling gateways, including Internet telephony gateways and voice-over-IP (VoIP) packet gateways. A free report excerpt and table of contents is available online at www.insight-corp.com/gateways.asp.

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Donna Savino

at Insight Research

973-541-9600