Demand for VoIP Services to Rise, Revenues to Remain Flat

Falling equipment prices will offset substantial increases in VoIP subscription rates.

By Adam Stone

As with so many businesses and individuals in these recession-stricken days, it looks as if providers of VoIP equipment will be working harder for less money this year.

Telecom researchers at Dell'Oro Group put out their "Carrier IP Telephony Report" this week. They say that while the demand for VoIP services is likely to rise, falling equipment prices will leave equipment makers merely holding steady.

"We are looking at a 35 percent growth in voice over broadband subscribers in 2010," said Dell’Oro Vice President Greg Collins. That’s a somewhat faster rate of growth than in 2009. Yet with price declines, the overall effect will leave the equipment market "stable."

Demand will come largely from the aggressively priced bundling of services, as service providers continue to wrap up high speed Internet, television and other services in packages that include a VoIP component. Collins pointed for example to Comcast’s offering on caller ID over TV.

Tools such as speech-to-text will go beyond such providers as Google Voice to be incorporated into other business and residential voice offerings, further driving demand.

At the same time, expected improvements in the housing market and in the overall economy also should boost VoIP adoption, Collins said.

Looking to the long term, Collins said, government initiatives such as the National Broadband Plan should further encourage VoIP adoption.

But what about those equipment makers: Putting out more product, but with revenues just holding steady – working harder, in fact, for no more pay?

"Just like the rest of us," Collins quipped.