Lawful Interception Market

Market Overview

The global lawful interception market size was valued at USD 3.81 billion in 2022 and is projected to reach USD 23.80 billion by 2031, growing at a CAGR of 22.4% during the forecast period (2023- 2031). Factors such as the rising number of criminal activities and a significant increase in interception warrants are driving the lawful interception market growth.

Lawful Interception (LI) is a security procedure in which a service provider or network operator manages and transmits intercepted communications from private individuals or organizations to law enforcement agencies. Lawful interception is used by law enforcement agencies (LEAs), regulatory or administrative agencies, and intelligence services to prevent crime, including fraud and terrorism. Recent developments in data-based communications have unveiled new channels for lawful interception. The expansion in networks and increased telecommunication activities promote lawful interception activities.

In order to evaluate analytics workloads and social media network influencers, lawful interception is a growingly popular network evaluation method. Managers in charge of advertising spend their time with this program to learn who might be persuaded to buy through posts shared across social networks. Financial crimes like money laundering can also be uncovered with its help. These instruments are employed in the fight against terrorism and the suppression of criminal activity.

Market Dynamics

Market Drivers

Rising Number of Criminal Activities

The rise in the number of criminal and terrorist activities across the globe has fostered the need for technologically advanced crime detection methods and favorable lawful interception regulations. Lawful interception is used by law enforcement and intelligence agencies to analyze the communication data of suspects to fight and control crimes, such as terrorism, domestic crimes, and cybercrimes. On issuance of a warrant by the legal body, the network operators and service providers relay the intercepted data of the suspect to intelligence agencies and LEAs. The monitoring centers analyze the forensic telecommunication data from SPs and ISPs to derive general intelligence for law enforcement agencies about the suspect's organizations, activities, and associations to track and monitor criminal activities. Such factors drive market growth.

Significant Increase in Interception Warrants

There has been a significant increase in the number of warrants issued for executing lawful interception in the past two decades. The number of warrants issued for lawful interception has drastically increased in countries like Germany. Moreover, certain changes in the communication pattern have led to an increase in the number of interceptions carried out on mobile connections. In addition, the rapid increase in mobile/smartphone users has resulted in the exploitation of communication networks, which has been the prime reason for the increase in the number of interceptions carried out on telecom networks. The number of warrants issued for lawful interception is estimated to increase owing to the current scenario and recent technological changes.

Market Restraints

Adherence to Rules and Privacy Maintenance

Communication data for analysis or evidence must be interception with prior consent from the judicial body. The lawful interception regulations forbid interception without consent from the court. Some countries consider intercepted data (audio, video, or other data) as evidence in legal proceedings, but unlawful interception is a criminal offense. The person or organization responsible for executing unauthorized interception could be penalized. The implications of adherence to rules for intercepting communication act as a key restraint for the lawful interception market.

Privacy concerns have been associated with public communication systems. Private communications offer better privacy and confidentiality of communication channels. However, lawful interception leads to privacy issues for users, as it is a legalized method of tracking user conversations, which could hinder the growth of the lawful interception market.

Market Opportunities:

Advancements in Network Technologies

Telecommunication networks based on the conventional system are categorized into voice and data-carrying networks. The current network evolved from 2G to 3G and then LTE standards to carry voice, text, and videos through separate channels. The traditional interception methods have been replaced by advanced interception solutions, which allow the interception of voice, audio, digital image, and text files. Technological advancements in network communication technologies would demand heavy investment in developing newer interception solutions.

Furthermore, every country has a set of guidelines and regulations for service providers (SPs) and Internet service providers (ISPs) to execute lawful interception. In addition, regulations have been enforced by governments in other countries that require SPs and ISPs to implement lawful interception capability in their network. This factor would continuously foster the growth of the lawful interception market during the forecast period. International standards organizations have proposed specific parameters that must be adhered to by the SPs and ISPs to carry out lawful interception facilities.

Regional Analysis

North America Dominates the Global Market

Region-wise, the global lawful interception market is segmented as North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

North America is the most significant global lawful interception market shareholder and is expected to exhibit a CAGR of 21.8% over the forecast period. This reflects increased awareness among law enforcement agencies about the advantages of implementing lawful interception solutions and several regional and global telecom companies. Rising investment opportunities in R&D activities and strict regulatory requirements are the main factors causing this need for lawful interception in North America. In addition, North America held the largest share of the lawful intercept market in 2022 because the region has many vendors offering lawful intercept solutions, including Cisco and FireEye, which has helped the market expand. Cisco has developed a RADIUS-based lawful interception mechanism that supports lawful interception in IP networks. The U.S. Government invested nearly USD 3 million in 2007 and entered into a contract with Verint Systems, Inc. to develop a lawful interception tool for Agencia Federal de Investigacion (AFI) to interpret communication from SMS, landline calls, or the Internet.

Similarly, NICE Systems Ltd. provides a location-tracking solution that detects suspicious incidents in real time and identifies new suspects and targets. Pattern analyzer collects multiple data from multiple sources and analyzes them. The analysis generates real-time alerts for targets and new threats and reveals unique patterns using preinstalled programs. NICE track OSINT uses monitored information and combines the data from intelligence sources to get a complete picture of the crime and target. Such factors drive market growth.

Europe is expected to exhibit a CAGR of 20.8% over the forecast period. The adoption of lawful interception is prompted by a rise in internet crime rates in Germany, which opens up numerous opportunities for market expansion for those operating there. According to Bitkom, an IT business association, around half of German internet users are victims of online crime. According to a study conducted by Forsa in 2012, the crime rates increased by 11%, with 38,000 recorded cases, in 2011. European Telecommunications Standards (ETSI) is a major driver for defining lawful interception standards, which are not restricted to Europe. However, the same guidelines define lawful interception across various world countries.

Additionally, the upsurge in cybercrimes has fostered the demand for lawful interception in Europe. Forbes has stated that approximately 38,000 cybercrime cases were registered in Germany. Juniper Networks, Huawei, Alcatel-Lucent, and Cisco Systems are renowned manufacturers of SORM. SS8, Aqsacom, Pine, Accuris, and Digivox are some of the companies that have implemented lawful interception in European regions. Siemens, Alcatel Lucent, Cisco, and Nortel are some of the lawful European interception market hardware vendors.

The Asia-Pacific market for lawful interception is expanding as a result of an increase in terrorist attacks and cybercrimes. The hierarchy in the design, development, and implementation of the interception solutions demands some basic safeguards to ensure that non-authorized interception does not occur. These factors are expected to impact the market during the forecast period. The political instability in certain countries of the Asia-Pacific region increased cybercrime activities. Moreover, the government in the region has heavily invested in developing lawful interception technologies to reduce crime rates and prevent data loss.

Furthermore, technological advancements and implementing stringent regulations across the region would foster market growth. Several countries in Asia, such as Japan, Malaysia, Korea, and China, have implemented high-speed, efficient communication technologies. In addition, countries like India have switched to high-speed data communication channels. This offers lucrative growth opportunities to market players to expand their market presence. Aqsacom, Verint Systems, Inc., and NICE Systems are some companies operating in India and other Asia-Pacific countries.

Segmental Analysis

The global lawful interceptionmarket is segmented based on solutions, network technology, communication technology, and end-user.

By solution, the global market is classified into devices, software, and services. 

The devices segment is the highest contributor to the market and is predicted to exhibit a CAGR of 20.3% during the forecast period. The devices market is driven due to the rise in data traffic across telecommunication networks worldwide. Telecommunication network components such as switches, routers, and gateways, amongst others, are witnessing increased traffic. In addition, the market is set to experience further changes due to developments in all-IP networks. The IP network of NGN is expected to increase the traffic and interception on IMS devices. Several companies offering network components have added lawful interception capabilities to their devices. Interception capabilities on devices assist concerned stakeholders.

Based on network technology, the global lawful interceptionmarket is classified into Voice over Internet Protocol (VoIP), Long-Term Evolution (LTE), Wireless Local Area Networks (WLAN), Digital Subscriber Line (DSL), Public Switched Telephone Networks (PSTN), Mobile Voice Telephony, Mobile Data, and others. 

The mobile voice telephony segment owns the highest market share and is anticipated to grow at a CAGR of 21.9% during the forecast period. Mobile voice telephony implies all voice-only communication on mobile channels. Voice communication over IP technology is not considered in this segment analysis. Voice communication over mobile networks was started as per GSM and CDMA standards. These two standards later evolved to accommodate data communication. Eventually, with the roll-outs of high-speed data networks, voice communication is now facilitated over IP channels. However, non-IP-based voice communication is facilitated over GSM or CDMA channels or their evolutions. The evolved architectures of GSM or CDMA are similar to conventional structures regarding non-data communication.

The segment analyzes lawful interception on GSM, CDMA, or its non-data/non-IP voice communications evolutions. The segment analyzes interception across mobile networks until it reaches the trunk network. Often, mobile-originated communication is truncated on the conventional PSTN, ISDN, or IMS network for further transmission, which is analyzed separately in the module. Calls originating from a mobile can be intercepted at various points such as BTS/NodeB, BSC/RNC, MSC, or GMSC, beyond which they are transferred to high-speed trunks.

Based on communication content, the global lawful interceptionmarket is classified into voice communication, video, text messaging, data downloads, and file transfer. 

The voice communication and file transfer segment is the highest contributor to the market and is predicted to exhibit a CAGR of 21.4% during the forecast period. Law enforcement agencies' development of new technologies and communication platforms would facilitate the market growth for voice communication interception. The capability of these intelligent solutions to enable the interception and monitoring of all types of voice and data communications across networks such as fixed networks, mobile networks, and the internet would supplement the market growth. Furthermore, the increase in demand for lawful voice interception due to the rise in criminal and terrorist activities fosters the adoption of interception methods by various government organizations and law enforcement agencies.

Based on end-user, the global lawful interceptionmarket is categorized into government and enterprises.

The enterprise segment owns the highest market share and is predicted to exhibit a CAGR of 26.6% during the forecast period. Nowadays, several companies have personalized cloud servers for storing, processing, analyzing, and retrieving information. It stores sensitive data and is safeguarded by using firewalls. However, critical data of the enterprise are transmitted to undesired destinations. Such unauthorized transmission is intercepted by centralized interception security solutions deployed by enterprises. In addition, interception is crucial to determine links to potential or ongoing fraud. Intra-organizational calls are commonly supported by intranet, intercom, or IPBEX. These calls are intercepted to prevent or detect malpractices.

Many companies have their own cloud server and intranet network for multi-city operations. In addition, the growing adoption of BYOD technology has increased the vulnerability of company data to leak out. Hence, such interception within the company would experience rapid growth during the forecast period.

Recent Developments

• August 2022- SS8 Networks (SS8), a leading provider of Lawful Intercept, Location, and Monitoring Suite Platforms, announced the expansion of their software development team as part of an ongoing strategy to support international product demand growth. The new team will support the research and development of SS8's market-leading solutions Xcipio, Intellego XT, and Location Intelligence, which is based in the Toronto area.
• June 2023 - Cisco (CSCO), the enterprise networking and security leader, is delivering on its promise of the AI-driven Cisco Security Cloud to simplify cybersecurity and empower people to do their best work from anywhere, regardless of the increasingly sophisticated threat landscape. Cisco invests in cutting-edge artificial intelligence and machine learning innovations that will empower security teams by simplifying operations and increasing efficacy.