Market Analysis – 43221510 – Telephone call diverter or forwarder

Market Analysis Brief: UNSPSC 43221510 - Telephone Call Diverter/Forwarder

Executive Summary

The market for physical telephone call diverters is in a state of terminal decline, with a current estimated global TAM of est. $12M. This market is projected to contract sharply with a 5-year CAGR of est. -22% as its core technology is rendered obsolete. The single greatest threat is the rapid, widespread enterprise adoption of software-based Unified Communications as a Service (UCaaS) and VoIP platforms, which include call forwarding as a standard, integrated feature. Procurement strategy must pivot from sourcing optimization to managed exit and technology migration.

Market Size & Growth

The global market for dedicated call forwarding hardware is exceptionally small and contracting. The addressable market is comprised almost exclusively of maintenance, repair, and operations (MRO) spend on legacy Public Switched Telephone Network (PSTN) infrastructure. The transition to all-IP networks by global telecoms is accelerating the obsolescence of this hardware category. The three largest geographic markets are sustained only by the pace of their respective infrastructure upgrades: 1. Asia-Pacific (lagging modernization in some sub-regions), 2. North America (legacy industrial/utility systems), and 3. Europe (MRO for systems predating the BT 2025 switch-off).

Key Drivers & Constraints

1. Constraint: Dominance of UCaaS/VoIP. The primary market constraint is the wholesale shift to software-based communication platforms (e.g., Microsoft Teams, Zoom Phone, RingCentral). These platforms provide superior, feature-rich call routing capabilities, eliminating the need for ancillary hardware.
2. Constraint: Global PSTN Decommissioning. Major telecommunication providers are actively shutting down their copper-wire PSTN infrastructure in favor of fiber and wireless networks. This removes the foundational technology upon which these devices operate [Source - BT Group, Dec 2023].
3. Constraint: High Total Cost of Ownership (TCO). Compared to software, physical diverters incur costs for hardware, installation, maintenance, power, and physical space, offering a significantly lower ROI and lack of scalability.
4. Driver: Legacy System Support. The only remaining demand driver is the need for replacement parts in niche, critical environments (e.g., utility control centers, elevators, security systems) where legacy PSTN equipment has not yet been upgraded due to cost, complexity, or regulatory hurdles.

Competitive Landscape

The competitive environment is sparse and consists of small, specialized manufacturers serving a shrinking customer base. Barriers to entry are negligible from a technical standpoint, but the collapsing market size is a formidable commercial barrier.

• Tier 1 Leaders (Legacy Niche)

  • Patton Electronics: Differentiates with a broad portfolio of "last-mile" connectivity hardware, bridging legacy and modern IP systems.
  • Viking Electronics: Focuses on durable, specialized telecom peripherals and security communication devices for niche industrial applications.
  • Multi-Tech Systems: Offers a range of communication devices, including some legacy-compatible gateways, with a reputation for reliability.

• Emerging/Niche Players

  • Specialized online electronics retailers (e.g., Black Box).
  • White-label manufacturers based in Taiwan and China.
  • Refurbished equipment resellers on secondary markets (e.g., eBay).

Pricing Mechanics

The price build-up for a typical call diverter is simple, driven by the bill of materials (BOM), assembly, and logistics. The unit price is low (typically $50 - $250), but declining volumes prevent suppliers from achieving significant economies of scale. The primary cost components are basic electronic parts, a plastic enclosure, and low-complexity PCB assembly. While demand is falling, component price volatility can still impact supplier margins.

The three most volatile cost elements are: 1. Microcontrollers (MCUs): Legacy 8-bit and 16-bit MCUs have seen supply chain normalization, but prices remain est. +10% above pre-pandemic levels. 2. International Freight: Ocean and air freight costs, after peaking in 2022, have fallen significantly but remain susceptible to geopolitical events and fuel price swings. Current rates are est. -30% from their 2022 peak. 3. RJ11/RJ45 Connectors: Prices for these standard components can fluctuate based on copper and polymer input costs, with recent volatility of est. +/- 5%.

Recent Trends & Innovation

Innovation in this category has ceased; trends are centered on obsolescence and replacement. * PSTN Shutdown Acceleration (Q4 2023): Major carriers in the UK (BT) and US (AT&T, Verizon) have reaffirmed aggressive timelines for copper network shutdowns by 2025, forcing remaining users to find alternative solutions [Source - Ofcom, Jan 2024]. * Rise of Analog Telephone Adapters (ATAs) (2022-2024): A key trend is the use of ATAs as a "bridge" to connect legacy analog devices (including fax machines and diverters) to VoIP systems. This is an interim solution, not a driver for new diverter sales. * Supplier End-of-Life (EOL) Notices (2023-2024): Manufacturers are increasingly issuing EOL and last-time-buy (LTB) announcements for their PSTN-dependent product lines, creating significant supply continuity risk for any remaining users.

Supplier Landscape

Regional Focus: North Carolina (USA)

Demand for physical call diverters in North Carolina is negligible and presumed to be near zero. The state's robust technology (Research Triangle Park), finance (Charlotte), and life sciences sectors have long since migrated to sophisticated UCaaS and cloud-based contact center solutions. The advanced statewide deployment of fiber optic and 5G infrastructure further marginalizes this legacy hardware. Any residual demand would be confined to small, isolated pockets of legacy industrial control or utility systems. There is no local manufacturing capacity; any required units would be sourced from national distributors of the few remaining niche suppliers.

Risk Outlook

Actionable Sourcing Recommendations

1. Mandate Migration & Execute Last-Time Buys. Initiate an enterprise-wide audit to identify all remaining hardware diverters. For any device supporting a business-critical function, immediately execute a last-time buy (LTB) to secure a 24-month supply of spares. Concurrently, mandate a full migration to a software-based solution on our corporate UCaaS platform (Microsoft Teams) within 12 months to eliminate this technology risk entirely.

2. Freeze New Spend & Consolidate on Software. Effective immediately, place a hard freeze on all new requisitions for UNSPSC 43221510. Direct all teams to use the built-in call forwarding and routing features within existing enterprise software licenses. This zero-cost alternative leverages sunk software investments and will generate est. $75k+ in annual hardware and maintenance cost avoidance across the enterprise.