IPX revenue to grow by 55.6% over the next 4 years
By Isabelle Paradis, HOT TELECOM
30 January 2012
a result of the exponential growth of mobile data
services anticipated over the next 5 years, a majority
of the IPX revenue increase is expected to come
from IPX data services.
is increasingly popular with Wholesale operators
as it opens up opportunities for voice carriers
to move away from the minutes-based model and towards
alternative methods of charging. Carriers with IPX
hubs will have the opportunity to provide and charge
for services such as routing transparency, low latency
and number portability, or roll this into a subscription
fee for using its IPX platform. At this point in
time however, no single player is able to provide
complete global IPX coverage using its own network.
Even the largest IPX players such as TATA, BICS,
BT, iBasis/KPN and DT ICSS must interconnect with
is likely that in the medium term, most IPX providers
will ultimately deliver IPX platforms that are interconnected.
However, this will take considerable time and in
the interim, there will be more bilateral couplings
such as the TI Sparkle/iBasis relationship.
the whole, players in the IPX arena are currently
in the market entry stage and in the process of
launching services. Most have entered the market
by providing VoIP over their IPX networks, nevertheless,
some are already migrating data services onto their
IPX networks too.
a general rule, carriers are approaching IPX from
different directions, with the majority addressing
first and foremost voice interconnection, whilst
others such as DT ICSS seem more focused on data
to enable new and innovative services. The second
direction we are witnessing includes service providers
such as iBasis/TI Sparkle and BT Wholesale who are
positioning themselves to help mobile operators
reduce their reliance on TDM and migrate to all-IP.
next steps for differentiating in the market will
be based on the ability to innovate on traditional
network strengths such as reach and performance,
and then other sales and support factors. White-label
IPX services are further out on the horizon and
IPX hubs managed by third-party arbitrators are
also a potential business model.
IPX market is populated by an increasing number
of players, with the key players in the IPX market
‘IPX data services are expected to have generated
39.2% of the total International IPX revenue in
2011 with the remaining 60.8% coming from IPX voice
services’ HOT TELECOM president Isabelle Paradis
said. As a result of the exponential growth of mobile
data services anticipated over the next 5 years,
a majority of the IPX revenue increase is expected
to come from IPX data services. Over the next 4
years, total International IPX revenue is forecasted
to grow by a CAGR of 55.6% and by the end of 2015,
International IPX data service should account for
72.3% of the total revenue, with voice expected
to account for 27.7% of the total. (It is important
to keep in mind that in our evaluation of the IPX
market, IPX voice revenue is net of termination
rates, while IPX data revenue includes interconnection
payments to be transferred to the end carrier).
analysing the total International IPX revenue on
a regional basis, HOT TELECOM concluded that Asia-Pacific
is the largest region and should remain so over
the forecasted period. Asia-Pacific should have
generated 46.2% of the total International IPX revenue
in 2011 and the region is expected to benefit from
total International IPX revenue CAGR of 53.8% over
the forecasted period. Europe is the second largest
IPX region in terms of revenue with 23.5% of the
total in 2011 and by the end of the forecasted period,
the region’s total International IPX revenue
should have increased by a CAGR of 53.9%.
Voice revenue is forecasted to grow by a CAGR of
27.7% over the next 4 years. Europe is and should
continue to be the largest market for IPX voice
services (based on location of traffic origination)
over the next 4 years as the region is forecasted
to account for 41.5% of all IPX Voice traffic origination
revenue and this ratio is expected to have decreased
marginally to 39.7% by the end of the forecasted
follows with 35.3% of the world IPX Voice revenue
in 2011 and should have grown to 36.9% in 2015,
mostly as a consequence of the sheer enormity of
the population, and rapid take-up of IP services.
North America is the third largest market, with
18.8% of the IPX Voice revenue in 2011.
America and MEA, although by far the smallest markets
currently in terms of percentage growth, are expected
to be the fastest growing over the next 5 years.
IPX Voice CAGRs are expected to have reached 75.4%
and 59.5% for Latin America and MEA respectively,
growing their share spend from 1.9% and 2.3% respectively
in 2011 to 3.4% and 4.2% in 2015.
details in regards to the International IPX revenue
and forecast can be found in HOT TELECOM’s
newly published report: http://www.hottelecom.com/ipx-revenue-analysis.html
addition to revenues derived from the provision
of voice services, there is also a market opportunity
to provide data services over IPX networks. These
data services will come in four main guises: