The North American voice over IP (VoIP) market is about to go completely bananas, with phenomenal growth predicted for the next six years, according to a report by Frost & Sulllivan.
The analyst’s newly-released North American Residential VoIP Markets report says that the pervasiveness of broadband Internet access and the availability of low-cost VoIP services will spur huge growth, with consumer VoIP market revenues reaching $4.07 billion (~£2.33bn, ~€3.34bn) in 2010 – up more than 1300% over $295.1 million (~£169m, ~€242m) last year.
The report anticipates a stampede of non-traditional telecommunications companies – including cable operators, Internet service provider (ISP), and non-telecom companies – charging into the voice market, driving the number of North American VoIP lines up to 18 million from 1.5 million in the same period.
The VoIP’s operator’s joy could be the incumbent local exchange carriers (ILECs) misery, as Internet telephony represents a direct threat their market share and revenue.
According to Frost & Sullivan’s report, ILECs are already reeling from losing 15 million access lines to their non-traditional competitors, although a sizeable proportion of these were data lines and second residential lines.
“Residential subscribers are likely to replace second lines with wireless or VoIP; the benefits of VoIP include lower cost, additional features and ease of use,” Frost & Sullivan Senior Analyst Lynda Starr said in a statement. “If an ILEC offers VoIP, it risks cannibalising traditional revenue but also opens up new revenue streams.”
The report concludes that it’s the quality of service and the VoIP feature set that’s attracting punters to the service rather than a desire to get in with the hi-tech crowd.
Frost & Sullivan notes that the mass market will initially be attracted by cost-savings, but the compelling new features on offer will ensure VoIP’s success.