VoIP Market To Hit $4 Billion By 2010: Report

VoIP Market To Hit $4 Billion By 2010: ReportThe 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.

VoIP Market To Hit $4 Billion By 2010: ReportThe 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.”

VoIP Market To Hit $4 Billion By 2010: ReportThe 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.

Frost & Sullivan