Growing Adoption of SIP Trunking Services in Multiple End-use Sectors to Boost Market Growth
Business owners around the world are increasingly seeking novel ways to minimize costs and review their spending strategies. Some of the services that require a high level of management include merchant services, payroll services, and shipping services. Over the past couple of decades, session initiation protocol (SIP) trunking has emerged as an effective cost-saving service and its adoption continues to grow across various sectors, including retail, IT, education, BFSI, media & entertainment, and healthcare. The demand for SIP trunking services is expected to witness a staggering growth in the upcoming decade.
As SIP trunking services create, modify, and terminate sessions with one or multiple parties in a specific IP network, its adoption has scaled up over the past few years – a trend that is expected to continue during the forecast period. In addition, at present, players operating in the current SIP trunking services market landscape are increasingly offering customized SIP trunking services to business owners as per the requirement of customers due to which, its adoption rate is moving in the upward trajectory. The steady economic growth in several developing regions has also played an imperative role in boosting the demand for SIP trunking services in recent years.
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Moreover, notable advancements in cloud-technologies have paved the way for cloud-based SIP trunking services that are gradually replacing the traditional ISDN modules – another major factor that is expected to propel the growth of the global SIP trunking services market. SIP trunks are relatively cost-efficient in comparison with the equivalent analog trunks and thus, their demand is expected to remain higher than that of analog trunks during the assessment period. Hence, the global SIP trunking services market is expected to reach a market value of US$ 35.5 Bn by the end of 2030.
Favorable Architecture and Entry of Several Players to Fuel Market Growth
Technological advancements are likely to play a key role in the development of the global SIP trunking services market during the assessment period. In the current scenario, end users are highly in favor of opting for SIP trunking services due to higher purchasing flexibility in comparison with the TDM. Furthermore, several customers are gradually replacing WAN services, WAN connections, and public Internet with SIP trunks due to which, the global SIP trunking services market is expected to exhibit an impressive growth rate in the upcoming decade. In addition, the favorable architecture of SIP trunking is another factor that is anticipated to boost the adoption of SIP trunking services, especially in on-premise phone systems.
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Over the past couple of decades, multiple players have entered the global SIP trunking services market due to its soaring adoption rate. While improving the quality and performance of their SIP trunking services, market players are likely to compete on the basis of pricing points and the ability to provide customized SIP trunking services. In addition, several top tier market players are increasingly working toward offering additional features at minimal rates– a factor that is projected to propel the market for SIP trunking services.
Adoption of SIP Trunking Services across Healthcare Sector to Grow amid COVID-19
Although the overall adoption of SIP trunking services is likely to remain lower than the initial projections owing to the onset of the novel COVID-19 pandemic in 2020, the healthcare sector is expected to provide considerable opportunities to the players operating in the current SIP trunking services market. The growing demand for efficient communication and collaboration, especially in the healthcare sector to provide high-quality urgent care is one of the key factors estimated to boost the demand for SIP trunking services across the global healthcare sector. In addition, as cloud-based telecommunication continues to garner considerable popularity due to the COVID-19 pandemic, healthcare providers are increasingly relying on SIP trunking services to stay connected with their patients from remote locations.
The global SIP trunking services market is expected to expand at an impressive CAGR of ~13% during the forecast period. The market growth is primarily driven by factors such as significant decrease in the total cost of ownership due to the entry of the pay-as-you-go model, soaring adoption of cloud-based communication solutions, and surge in integration between private branch exchange systems and SIP trunking services. In addition, the rising demand for SIP trunking services in small-scale businesses is another factor anticipated to propel the global SIP trunking services market. Although on-premise trunking services are projected to retain the lead in the first half of the forecast period, hosted SIP trunking services are expected to garner considerable popularity in the second half of the forecast period.
SIP Trunking Services Market: Overview
- The global SIP trunking services market is expected to expand at a CAGR of ~13% during the forecast period, primarily driven by growing cloud-based SIP trunking services and replacement of traditional ISDN
- The SIP trunking services market is expected to be valued at around US$ 10.6 Bn in 2020 and reach US$ 35.5 Bn by 2030
- In terms of deployment, the on-premise trunking services segment is anticipated to account for notable share as compared to the other form factors of the SIP trunking services market
- Based on end user, IT & telecom is set to dominate the market during the forecast period, whereas retail is expected to be the fastest growing segment during the forecast period
- North America remains a prominent market for SIP trunking services globally, and the market in the region is expected to be valued at US$ 3,955.9 Mn by the end of 2020
SIP Trunking Services Market Definition
- The SIP trunking services market report provides analysis of the market for the period 2018 – 2030, wherein 2019 is the base year, 2020 is the estimated year and 2020 to 2030 is the forecast period. Data for 2018 has been included as historical information.
- In this report, we analyze the growth drivers that enhance the value of the SIP trunking services market and various opportunities prevailing in the market
- Providers of SIP trunking services are focused on developing innovative solutions to serve specific requirements of end users, which is expected to drive the market in the upcoming years
North America SIP Trunking Services Market Snapshot
- Key countries that significantly contribute to the growth of the SIP trunking services market in North America are the U.S., Canada, and Mexico. The U.S. witnesses increasing adoption of SIP trunking services across industries such as retail, BFSI, IT & telecom and others, thus driving the SIP trunking services market in the U.S.
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Key Drivers of SIP Trunking Services Market
- Cloud-based SIP Trunking Services: Cloud-based SIP trunking services eliminate the need to install equipment infrastructure in organizations. This reduces the burden of installation and cost of management. Currently, small organizations are largely implementing cloud-based SIP trunking services due to their stringent budget. Furthermore, vendors and telecom service providers are focusing on offering cloud-based SIP trunking services to explore the ever-increasing demand for cloud solutions.
- For instance, Deutsche Telecom based in Bonn, Germany, deployed a centralized SIP gateway for 18 European countries. The deployment of this gateway enables customers to access up to 50,000 voice channels in the public telephone network.
Hence, growing cloud-based SIP trunking services is expected to fuel the expansion of the SIP trunking services market worldwide.
- Replacement of Traditional ISDN: SIP trunking services are witnessing continuous increase in demand, considering their cost benefits over traditional systems, scalability, and flexibility to add channels to existing SIP trunks. Large businesses can realize huge cost benefits through the installation of SIP trunks. Companies are influenced to replace their traditional telephone systems with SIP trunking services.
SIP trunking eliminates expensive ISDNs by operating over the existing network infrastructure and also reduces the cost incurred in installing multiple lines for voice and data. Moreover, large telecom companies are taking initiatives to migrate their customers over the IP network considering the benefits of SIP trunking over traditional telephony. This migration is due to ROI benefits and control capabilities.
Key Restraints of SIP Trunking Services Market
- Interoperability Challenges: Interoperability is one of the major issues faced by SIP trunking services in the market. The interfacing of these devices might pose challenges for the smooth functionality of SIP trunk calls due to differences among vendors providing edge devices, service providers, and IP-PBX. IP phone vendors and SIP trunking service providers are taking initiatives to conduct interoperability testing in order to complement IP phones’ configuration and operability with different SIP trunking solution providers.
Therefore, interoperability challenges is one of the major restraints for the growth of the SIP trunking services market.
SIP Trunking Services Market: Competition Landscape
- In April 2019, Verizon Communications partnered with Microsoft Corporation to provide cloud-based integrated connectivity solutions, including SIP trunking services. This cloud-based service is likely to reduce the requirement for organizations to invest in new hardware systems to combine their collaboration and communication efforts.
- In October 2019, SkySwitch partnered with 3CX Ltd, to provide advanced level SIP trunking solutions to create and manage virtual connections. The initiative would help the company to improve its customer base and enhance its market presence worldwide.
SIP Trunking Services Market: Company Profile Snapshot
- AT&T Inc.: AT&T Inc. is a Europe & Asia Pacific telecom operator providing communication and digital entertainment services. AT&T, Inc. provides mobile services, SIP trunking services, next-generation TV, high-speed Internet, Internet transit services, and smart solutions to consumers, businesses, and governments around the globe.
- CenturyLink, Inc.: CenturyLink, Inc. is a U.S.-based communications service provider founded in 1968. The company operates through two segments, Business and Consumer, providing services such as Multi-Protocol Label Switching (MPLS), broadband, private line, hosting (including cloud hosting and managed hosting), Ethernet, data integration, video, colocation, network, public access, information technology, ancillary services, and Voice over Internet Protocol (VoIP).
- Tata Communications Ltd.: Tata Communications Ltd. is one of the leading providers of communication services to enterprise customers and service providers across the world. Tata Communications Ltd. offers a wide range of solutions and services, including converged voice, transmission, IP, SIP trunking, managed network connectivity, hosted data center, and others, such as business transformation services.
- Verizon Communications, Inc.: Verizon Communications, Inc. provides information, communication, and entertainment products and services. The company primarily offers voice, video, and data services and solutions through wireless and wire line networks. Verizon Communications, Inc. provides a wide range of products and services, including broadband data and video, corporate networking solutions, and cloud and network services to end users such as consumers, businesses, and governments.
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