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Growth in VoIP telephony market

Growth in VoIP telephony market

The Voice over Internet Protocol (VoIP) telephony market will top 25 million US households by 2012, driven by greater broadband subscribership and the expansion by cable operators into new markets.

In a report titled, "US Broadband Telephony Forecast, 2007 to 2012: Cable MSOs assert their dominance in the VoIP market," JupiterResearch found the ability to successfully bundle broadband telephony with other relevant services will continue to drive consumers' adoption of cable-based VoIP.

This currently accounts for 71 percent of the VoIP telephony market.

According to the study, growth in cable-based VoIP will drive the market going forward.

After more than 10 years in the telephony business, cable operators have finally struck a chord with consumers, as demonstrated by the acquisition of about 3.6 million new VoIP telephony customers in 2006.

Broadband Analyst at JupiterResearch, Douglas Williams, said, "Aggressive marketing of double- and triple-play options, coupled with troubles for over-the-top VoIP providers, have given cable MSOs the upper-hand in the broadband telephony market.

"The forthcoming push into the wireless market will give cable providers the flexibility to provide whatever multi-play option a consumer may want."

The sufferings of Vonage, underscored by its patent-infringement case with Verizon, indicate the over-the-top VoIP market is increasingly at risk of becoming irrelevant.

Growth of broadband connectivity, greater availability of VoIP services, aggressive promotion of bundled packages, and more diverse offerings at a lower cost could each play a significant role in the eventual demise of the single-play VoIP market.

President of JupiterResearch, David Schatsky, said, “Over-the-top VoIP providers currently add subscribers on a net basis, but reliability and service quality offered by cable providers threatens future growth opportunities for single-play providers.

"Additionally, the relative difference in price points for voice service is declining as cable providers drop prices and over-the-top providers have added regulatory and cost-recovery fees."
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