Nortel Gains in Resurgent VOIP Market: Dell'Oro

Nortel Networks, which has spent much of the year selling off portions of its business, regained its position at the top of a resurgent voice over IP market in the second quarter, according to analyst firm Dell’Oro Group.

According to a Dell’Oro Group report issued Sept. 9, Nortel stood atop a VOIP market that saw a 7 percent jump in revenue—to $737 million—from the first quarter, fueled in large part by service providers’ drive to refresh equipment and license inventories.

Those providers also bought infrastructure designed to meet the short-term needs of their customers, the analyst firm said.

“Although the weak economy and lack of confidence in business conditions have severely reduced spending on network modernization projects, subscriber-facing equipment has seen only a modest negative impact, and business voice-over-broadband licenses on both softswitches and voice application servers remain a bright spot,” Dell’Oro Group analyst Greg Collins said in a statement.

License shipments for softswitches jumped 33 percent in the second quarter, while business voice or IP Centrex license shipments on voice application servers grew 85 percent, Collins said.

Nortel, which entered into bankruptcy earlier this year and has been working to sell off parts of its business—including its CDMA (Code Division Multiple Access) wireless business and LTE (Long Term Evolution) technologies—at the same time has been building up its unified communications offerings.

Also gaining ground in the VOIP market were smaller vendors, such as AudioCodes, MetaSwitch and Veraz. An advantage they had was not being exposed to large network upgrade projects that may have been hindered by the global recession.

Some of the larger vendors that were exposed to such projects, including Nokia Siemens Networks and Huawei, lost share, according to Dell’Oro Group.