Having followed the VoIP market for about seven years now, I’ve grown a little skeptical when industry analysts predict big numbers for VoIP in 2006. Each year it seems that analysts project VoIP usage to skyrocket, and yet Voice over IP hasn’t really achieved anything like widespread adoption yet. However, the benefits to VoIP are so compelling (and it’s proven to be reliable and that it can delivery toll-quality voice) that it does seem to be more of question of when, not if, VoIP will take off.

2005 was a watershed year for mass-market VoIP in the United States. Vonage, which currently enjoys the largest market share for residential VoIP service, passed the one million customer mark. Google launched an IP telephony service called Google Talk; it’s tied into their Gmail service. Microsoft acquired VoIP service company Teleo and plans to fold services into MSN messenger. And Skype, makers of the web-based telephony service, was acquired by eBay for $2.6 billion in September 2005. Public awareness of VoIP has grown thanks to high-exposure, mass-marketing campaigns from Vonage.

According to Jupiter Research, adoption of VoIP in the United States will grow from 1% in 2004 to 12% in 2009.

Cable companies are projected to take over the residential VoIP market, the chief reason being triple-play service bundles. Cable operators can offer voice, video, and data all delivered over one wire and charged on a single bill. Industry experts agree this is key to attracting and retaining customers.

When it comes to the corporate world, big business has taken the lead. Industry experts agree that VoIP deployment has been a more signifcant factor among large businesses than small to medium ones. Companies like Ford, Boeing, and Bank of America have all inked large VoIP deals and have begun rolling out service. The percentage of companies using VoIP grew from 3% in 2003 to 12% in 2004 (In-Stat/MDR). According to the Yankee Group, there are several reasons why the adoption rate for SMBs (Small to Medium Business) has not grown as quickly as anticipated: reasons include technology challenges, changing regulatory issues, and a fragmented vendor landscape. SMBs prefer to use hosted VoIP solutions, whereas large businesses can more readily afford to deploy a fully-owned, IP-PBX system.

VoIP across the world

Japan — a country that’s smaller in size than California and has less than half the population of the United States — is projected to have 28 million VoIP users by 2008. The country is about a year ahead of the rest of the world when it comes to VoIP adoption. Analysts cite government support, high percentage of residential broadband access, and high cell phone usage as factors for the success of VoIP in Japan.

VoIP in Asia is expected to grow from a $5.5 billion business in 2004 to over $10 billion in 2009, according to an In-Stat report. In Europe, France is the current leader in VoIP use at 14%, with Germany at 11%, and the United Kingdom at 7% (Hotwire/Mori report). German network operator Deutsche Telekom plans to migrate its network to IP technology completely by 2012. But regulator issues, use of VoIP for emergency calls, and reliability issues are viewed as the major obstacles delaying wider VoIP deployment in Europe.


See also:

• Advantages of VoIP
• Disadvantages of VoIP
• Regulation & Policy
• Standards

Request a new page