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Consumer Local VoIP Industry to Grow More Than 100 Times Its 2003 Size
Posted: 30-Aug-2004 [Source: Yankee Group]

[Yankee Group projects explosive VoIP growth from 1 million subscribers year-end 2004 to 17.5 million by year-end 2008.]

Boston -- According to the Yankee Group report, Despite Uncertainty, Leading Telephony Industry Players Commit to Mass-Market VoIP Deployment, voice over IP (VoIP) will have close to 1 million subscribers by year-end 2004, and serve 17.5 million U.S. households by year-end 2008, growing from 131,000 at year-end 2003.

Although Vonage dominates the market, cable MSOs will take the lead quickly. Cable MSOs will capture 56% of the U.S. local VoIP market by year-end 2005, while market share for the alternative voice provider category will decrease from 66% in 2003 to 19% in 2005. VoIP will drive cable telephony efforts and surpass circuit-switched cable telephony in 2006; by 2008, cable MSOs' share of the local telephony market will reach nearly 10%.

After many years of testing, VoIP is finally ready, and major industry players are committing to mass-market deployment of their VoIP services. The success of Vonage--and the resulting regulatory turmoil--has spurred a dramatic response from major telephony players. AT&T, Verizon and Qwest have committed to local VoIP rollout strategies for 2004, while Sprint, SBC and BellSouth view the consumer VoIP market with more caution.

"These companies have the potential to capitalize on the market's momentum," says Kate Griffin, Consumer Technologies & Services senior analyst. "Although alternative players and the MSOs maintain a head start in the consumer VoIP market, U.S. telcos can leverage their knowledge of telephony delivery, marketing, support and brand recognition. Operators that brave the uncertainty and enter the VoIP market will gain the ability to define the service and set consumer expectations."

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