Market Insight

SIP Trunks to Top 53 Million in 2021

October 18, 2017

Diane Myers Diane Myers Senior Research Director, VoIP, UC, and IMS

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Following is information and insight from IHS Markit about our 2017 SIP Trunking Services Annual Market Report

Bottom Line

  • Worldwide Session Initiation Protocol (SIP) trunking revenue totaled $3.3 billion in the first half of 2017 (H1 2017), growing 12 percent from a year ago
  • SIP trunks, meanwhile, increased 26 percent year-over-year in H1 2017, to 30 million seats; by 2021, SIP trunks are forecast to reach 53 million
  • All regions are growing, but North America comprises 59 percent of trunks

Our Analysis

The SIP trunking market is mainstream in North America for voice connectivity services and in other geographic regions enjoys continued expansion that helps to fuel growth. SIP trunking is a hot area marked by upside growth and a dynamic supplier landscape.

Global SIP trunking revenue is on track to notch double-digit year-over-year growth through 2020, but it lags behind trunk growth due to pricing compression.

There is no denying that the world is moving to IP, and SIP has become the de facto communications solution of choice for business connections. Topping the list of reasons that businesses are deploying SIP trunking are improved reliability, centralized applications and flexibility.

Still, SIP trunking accounts for less than 50 percent of installed business trunks, representing a large upside opportunity for migration. What we have found is that while more businesses are making the switch, they are not cutting over 100 percent of their connections to SIP on day one. SIP trunking is ideal for multi-site businesses due to its flexibility and cost savings — two important drivers of SIP trunking that are better achieved across multiple sites.

Although there is a wide swath of SIP trunking providers in North America and growing expansion worldwide, only a handful have achieved scale with more than 1 million trunks in service. And only a small number of providers have more than 3 million trunks in service. Most providers that have sold legacy voice connectivity services have made the switch to SIP trunking, but the installed base of legacy time division multiplexing (TDM) connections still prevails.

Looking ahead, continued strong worldwide growth is forecast for the SIP trunking market through 2021, when revenue is anticipated to reach $9 billion and trunks are expected to total 53 million.

Report Synopsis

The IHS Markit SIP Trunking Services Annual Market Report provides worldwide and regional market size, forecasts through 2021, analysis and trends for revenue and trunks. 

Research by Market
Enterprise & IT Mobile & Telecom
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