February 2019 –

During 4Q18, the total session border controller (SBC) market contracted 12% sequentially and 9% compared to 4Q17. The total market includes both enterprise (E-SBC) and service provider (SP-SBC) SBCs. The sequential decline was due to a very large order in 3Q18 boosting the SP-SBC market well above trend levels. The year-over-year decline was due to order variability. We expect that over the course of 2019, both markets will return to growth, discussed in more detail below.

For the full-year 2018, the total market grew just 1 percent to nearly $1.2 billion as both the SP-SBC market and the E-SBC market grew modestly. We forecast that the market will return to stronger growth in 2019 as the E-SBC continues to be fueled by the migration to SIP trunk services and hosted- or cloud-based UC services. The SP-SBC market will be continue to be driven by the migration toward VoLTE and the transition of interconnection services from mixed IP and TDM to pure IP.  Both the E-SBC and SP-SBC markets are in the process of transitioning to virtual- and cloud-based systems. The shift in architecture helps to boost demand but also comes with additional price pressure due to competition and the shift to software-only prices. For the year approximately 20 percent of the market consisted of virtual- and cloud-based network functions.

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