IDC: A Boom in VoIP

New stats project residential VoIP growth to explode over the next five years.

By Sean Michael Kerner | Posted Apr 4, 2005
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In 2005, research firm IDC expects that 3 million Americans will subscribe to residential VoIP services. By 2009, the number of subscribers is forecast to balloon to 27 million.

IDC notes that even though the VoIP market is already crowded with next-generation carriers like Vonage, as well as traditional carriers like AT&T, cable vendors will enter the fray in 2005 further cluttering the VoIP service market.

The price point at which VoIP services are offered is one of the current drivers of the technology's growth, However IDC cautions that carriers need to move beyond price and educate consumers about the features and functions of VoIP. IDC suggests that enabling convergence and integrating applications are "critical capabilities" that service providers will have to offer in the future.

According to IDC, VoIP still has a long way to go before it achieves critical mass in comparison to the existing time-division multiplexing (TDM)based services.

"VoIP must prove that it is more than just a cheap replacement for plain old telephone service (POTs)," said William Stofega, senior analyst in IDC's VoIP Services Research program in a statement.

"To do this, carriers will need to offer services that are compelling and affordable. The winners will use the flexibility of IP to design services that differentiate themselves from their competitors. However, it is important to remember that the market for VOIP services is still in the very early stages of development and carriers, and equipment vendors need to plan for a marathon."

VoIP services have recently been the subject of discussion on Capitol Hill. One of the downside issues is about 911 services (or lack thereof) provided by VoIP carriers.

In particular, Vonage has been involved in a number of disputes. Just last week it came up against regional carrier SBC over how to implement e-911 services for VoIP.

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