TMCnet News

InStat: 55 Million VoIPers by 2009
[February 04, 2006]

InStat: 55 Million VoIPers by 2009


TMCnet CRM Alert Columnist

In "Global VOIP Has Arrived; Just Not As Expected!" tech research firm In-Stat throws out another crystal ball prediction that total VoIP subscribers worldwide, 16 million in 2005, will balloon to over 55 million in 2009.

But despite an impressive 62 percent year-over-year subscriber growth rate in 2005, InStat officials say, "few consumers have ever heard of the term 'VoIP.'" In other words, considerable room for market growth here, friends.

"Competition in broadband access services is the key driving force behind VoIP market development," says Keith Nissen, In-Stat analyst. "In addition, multiple waves of new entrants, ranging from broadband ISPs and cable MSOs, to Google and eBay will play significant roles."

Everyone's competing to see who can be the most bullish on VoIP. A couple weeks ago Kevin Mitchell, principal analyst of Infonetics Research and author of a report on VoIP's rosy prospects, said “VoIP subscriber growth is skyrocketing right along with revenue growth: we’re forecasting triple-digit growth from 2005 to 2006, with 6 million new subscribers a year every year from 2006 to 2008, when there will be over 24 million."

That optimism's translating into hard business practice. Comcast is one firm expecting to significantly accelerate its VoIP rollout, hoping to add 1 million new customers by the end of the year. Comcast added 202,000 Comcast Digital Voice customers in 2005, according to industry observer Jeffrey Soong, "reflecting the rollout of the service to 25 new markets including Boston, Chicago, Seattle and Atlanta."

Comcast is de-emphasizing circuit-switched telephone customers in favor of VoIP, with the result, Soong says, that "Comcast Cable reported 98,000 net new phone customers in 2005 compared to a loss of 43,000 in 2004."

And following France Telecom's recent announcement of an expected 2005 revenue shortfall, Strategy Analytics published a report titled "France Telecom Targets FMC and Downplays Need for Speed as VoIP and LLU Threaten Growth."

The key reasons for the expected France Telecom revenue shortfall, SA thinks, are "rapid growth in competitors' unbundling local loops and VoIP subscriber numbers. The company is now downplaying the importance of investing in next generation FTTH and VDSL2 technologies, which are so heavily promoted by telecom vendors such as Alcatel, Ericsson, and Siemens."

"France Telecom's caution over high-speed Internet suggests that telecom vendors will struggle to meet sales targets with some incumbents," says Senior Analyst Martin Olausson. "If other markets develop similar competitive profiles to the advanced French market, telecom operators, such as BT and Deutsche Telekom, may come under similar pressure to re-state their previously announced Next Generation Network plans."

73 percent of all VoIP subscribers worldwide have migrated to VoIP without making a conscious buying decision to adopt the new technology, InStat found.

The report also finds that in North America and Canada, cable operators are aggressively expanding their VoIP footprint, but are marketing VoIP as plain old telephone service.

In Asia, South Korea will have the highest VoIP growth rate, followed by Hong Kong and Singapore, InStat thinks, while in Europe, broadband ISPs, such as Free Telecom (France) and FastWeb (Italy) are poised to do well with "innovative consumer triple-play service bundles."

David Sims is contributing editor for TMCnet. For more articles please visit David Sims' columnist page.

[ Back To's Homepage ]