VoIP On the Fast Track

Updated: January 07, 2011

According to a recent PointTopic analysis, VoIP hardware users grew by 15% in the first three quarters of 2009 to finally reach a new milestone: 100 million subscribers.John Bosnell, senior analyst at PointTopic said, "The number is close to 110 million today." Bosnell goes on to say that "This represents steady growth, particularly in the face of the financial turmoil of the recent past. For VoIP though there is an argument that these conditions are an uptake driver since you should be saving money if you’re making your calls over IP."

Over 22 million of these subscribers are US citizens, but almost as many (21,368,000) come from Japan. More interestingly, France, the third biggest VoIP-using nation, has over 38% of all fixed lines terminated over VoIP, making it by far the biggest relative user of VoIP. According to Bosnell, "It's competition that’s forced the pace in France and with a combination of an enthusiastic set of suppliers, cost effective bundles, appropriate regulation and a developing infrastructure the same could be seen in any market no matter how entrenched the incumbents."

On the software side, Skype, the world’s leading softclient VoIP service provider, is also experiencing a boom, with incomes totaling $653 million in quarter 3 of 2009. Although this number may seem relatively small, it becomes far more telling in light of the fact that 90% of Skype’s traffic generates no revenue whatsoever. The primary market beneficiary of this growth is Cisco, which has the leading share of the VoIP market.

Although VoIP service has been relatively slow to catch on with many consumers, Bosnell claims that the recent surge of interest has been building for a while and is unlikely to die out anytime soon. As he says, VoIP’s slower-than-expected start is due mainly to "technical issues, by no means resolved even today, regulatory barriers and customer inertia. Many operators have reduced their standard tariffs to cope with the threat of VoIP, which reduces the incentive to switch. Conditions are starting to become common that should allow for faster growth in the next couple of years…There’s certainly enough headroom in enough markets to see adoption increase markedly."

Jeremy Duke of Synergy’s Market Intelligence, on the other hand, anticipates destructive competition in VoIP’s future. He writes that today’s VoIP market "is driven by the need for integrated, remote IP telephony interconnections. In the future, we anticipate the application of gateway functionality to experience competitive pressure from the growing availability of SIP trunk lines."

Regardless of VoIP’s long-term future, the numbers certainly show that the industry is doing exceptionally well today, a trend which is unlikely to change in the immediate future.

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