Published: 01/12/2017
Author: Greg Collins, Exact Ventures

While most of the mobile infrastructure market is in decline, the Diameter Signaling Control (DSC) market remains a pocket of growth. In 1H 2017, the total DSC market, including both product and service revenues, increased 31% compared to 1H 2016 to $473 M. Service revenues grew 25% over the same timeframe and accounted for 30% of the total market. Product revenues grew 34% in 1H17 to $330 M as a 27% increase in Tps shipments was bolstered by a 6% increase in the average selling price per Tps. We expected that seasonal factors plus the continued transition to LTE and VoLTE would drive the market to even higher growth rates, but in 1H17, this was not the case. We believe that the less than expected revenues in 1H17 was due in large part to the timing of VoLTE investments and that the market remains poised for sustained long-term growth.

We forecast that in 2017 the total market (product and services) will grow by 40% to reach $1.1 B as LTE and VoLTE deployments—and subscriptions—continue to grow. We expect that at the end of 2017 LTE subscriptions will reach 2.2 billion or 23% of the worldwide total so we believe that the DSC market will have a very long and large growth potential. We forecast that in 2022, LTE subscriptions will amount to 4.7 B still just 52% of the worldwide total so the DSC market should continue to be a vital one for the coming decade. Similarly, since 2G and 3G subscriptions still account for approximately 77% of global subscriptions, the SS7/STP market remains substantial and continues to see good investment from operators who are increasingly considering converged signaling solutions that incorporate both DSC and IP STP functionality. SS7 security concerns are also prompting new investments that incorporate firewall functionality into the IP STP. We are forecasting that the total DSC market (product plus service revenues) will grow by a CAGR of 17% through 2022 to reach $2.3 B, which is largely consistent with our previous forecast.

DSC Nov 2017