The worldwide market for carrier VoIP equipment has stalled after a pro-longed period of double-digit annual revenue growth that began in 2002.
This led to the market contracting for the first time ever in 2008, with a drop in revenue of 6 per cent, according to Infonetics Research.
On a brighter note, a second Infonetics report, found that IMS deployments are likely to become a serious revenue driver by 2011.
Diane Myers, directing analyst at Infonetics, said the fourth quarter of 2008 confirmed what had been seen in the previous two quarters in North America, with signs in Western Europe and some parts of Asia as well.
"The market for carrier VoIP equipment has stalled due to large deployments nearing completion and shifting strategic priorities," she said.
"The global economic downturn will likely exacerbate the drop in VoIP equipment sales."
The second Infonetics report paints a more optimistic picture for VoIP equipment manufacturers.
It shows that worldwide sales of IMS (IP multimedia subsystem) equipment, including HSS (home subscriber servers) and CSCF servers, were up 94 per cent in 2008 compared to 2007.
Myers said IMS deployments are growing, led largely by European operators.
Fixed-line VoIP services are still the most popular applications delivered over IMS, however the reports suggests rich communication services will be an important part of the shift from fixed-line VoIP services to mobile networks and integration with standardized devices.
She said the revenue total for IMS deployments is small currently, but will grow rapidly and become substantial in 2011 and beyond as mobile operators upgrade infrastructure.
"With over 100 service providers worldwide having chosen their IMS vendors, less than half are fully deployed with live traffic," she said.
"The move to turn-up the remaining deployments, in addition to new deployments, will help fuel the sales for IMS network equipment.
"Mobile operator migration to IP and adoption of RCS will drive the deployments for IMS during the next four to five years."