During 1Q18 the total SBC market (SP-SBC plus E-SBC) contracted 12% compared to 4Q17. The market was up 2% compared to 1Q17 as the E-SBC market grew 7%, which more than offset the 2% decline in the SP-SBC market. In 1Q18 SP-SBC demand was less than expected, even factoring in seasonal weakness, due to slower-than-expected uptake of VoLTE services and associated native VoLTE roaming agreements between operators. Many operators seem content to use 3G voice to handle roaming.

We now expect the total market to grow 15% in 2018 as both the E-SBC and SP-SBC markets grow in the mid-teens. The E-SBC market continues to be fueled by SIP Trunk and Hosted UC services, whereby the SBC acts as secure, network demarcation point and provides QoS and protocol mediation. The SP-SBC market has been impacted by price erosion and relatively slow uptake of VoLTE and native VoLTE roaming. We expect that both factors will ease somewhat through 2018, helping to accelerate market growth.

During the quarter, the market leaders in the service provider segments were: Oracle, Ribbon, Huawei.

In the enterprise segment (E-SBC) the market leaders were: Cisco, Oracle, AudioCodes, Edgewater and Ribbon.