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May 07, 2007

Study: VoIP Telephony Market to Reach 25 Million by 2012

By Spencer D. Chin, TMCnet Web Editor

Greater broadband sponsorship and aggressive market expansion by cable operators will enable the Voice over Internet Protocol (VoIP) telephony market to top 25 million households by 2012, according to a study by JupiterResearch 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, which currently accounts for 71 percent of the VoIP telephony market.
According to the study, 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.
“Aggressive marketing of double- and triple-play options, coupled with troubles for over-the-top VoIP providers, have given cable multi-service operators the upper-hand in the broadband telephony market, “said Douglas Williams, broadband analyst at JupiterResearch, in a statement. “The forthcoming push into the wireless market will give cable providers the flexibility to provide whatever multi-play option a consumer may want.”
No one needs to look further at the problems on VoIP phone service provider Vonage, currently in a bitter court patent dispute with Verizon (News - Alert), to find that 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, the study 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,” said David Schatsky, president of JupiterResearch. “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.”
For additional information on this report or JupiterResearch's Broadband research service, visit .
Spencer Chin is a contributing editor for TMCnet. To see more of his articles, please visit his
columnist page.
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