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Summary:

If the market trends remain the same, then we will have around 4 million VoIP subscribers in the US by end of 2005, up nearly 300% from a million subscribers at the end of 2004, according to latest data from Telegeography. The revenues have ramped up […]

If the market trends remain the same, then we will have around 4 million VoIP subscribers in the US by end of 2005, up nearly 300% from a million subscribers at the end of 2004, according to latest data from Telegeography. The revenues have ramped up equally fast – up 473% from 3Q 2005 to $304 million.

The 3Q 2005 numbers show that the growth has been especially strong amongst the cable guys, though the endless marketing budget has helped Vonage defy the odds and stay at the top of VoIP rankings. So have other smaller players – for example, 8×8’s subscribers have grown more than 132% in the first nine months of 2005. Stephan Beckert, who tracks the VoIP business for Telegeography points out that all the e911 stuff hasn’t really had any material impact on the business. Even the recent spurt in outages and degrading services (in some cases) hasn’t slowed down the momentum. As seen from these numbers, when VoIP-based phones are sold as simply phones by Cable companies, consumers are happy to switch.

The number of voice-over-broadband subscribers increased 33 percent in the sec-ond quarter, from 2.7 million to 3.6 million. Voice over broadband subscribers have grown 400 percent since the third quarter of 2004, when only 714,000 VoIP lines were in service. The stronger-than-expected growth in the third quarter has prompted TeleGeography to increase modestly its forecast of total subscribers at year-end 2005 from 4.2 million to 4.4 million

Stephan Beckert, who tracks the VoIP business for Telegeography asks the important question, when he says, “how long before the subscribers shut off their main phones.” I think a lot of that is going to happen when Comcast ramps up its marketing machine, and rolls out the service in all its regions sometime in 2006. Initial checks in geographies Comcast has been offering their digital voice service, nearly 60% of consumers are switching away from the Bell phone system. Another point Beckert brought up was that the “revenue per subscriber for cable guys is much higher.” The growth in cable subscribers is one of the main reasons why the average VoIP monthly tab is up from about $27 a month to $28 a month.

  1. It might be growing but you may want to answer Heather Green’s post on her BusinessWeek blog as to why VoIP is so unreliable as to not be counted on.

    My DSL provider (Frontier) does not allow “naked” DSL, you have to have a regular phone line. I don’t need it as I have cell but until they change the policy, my DSL is in effect, twice as expensive as they advertise.
    My local cable company requires at least basic digital service so they are no better.

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  2. Wow!
    What a goofy comment system. The first line of a response is really, really big.

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  3. not sure what is going on, but let me check on the comment system

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  4. on the point you bring up – look at the gains being made by the cable companies. they are ones with fewer issues than so called independent VoiceIP providers. i think most of the problems have been localized to guys like sun rocket, vonage, broadvoice etc. (verizon and T as well). i think its all about grooming the traffic downwards…

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  5. the design issue was when you typed in some strange dash marks. that must have triggered off something. thanks for pointing that out. appreciate it

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  6. I didn’t think I would ever be using the word “wonderful” to describe my cable company, but that’s exactly how I feel after using the Cablevision VoIP, broadband and cable TV package. The phone service in particular is very reliable and the sound quality is great. And just a few months ago they sent me a letter saying that they are LOWERING my monthly bills!

    I haven’t been happier ever since I switched off my Verizon land line and their awful DSL service.

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  7. wow, not that is some kind of endorsement. well, i hope the cable guys keep the standards high and make it possible for people to keep the good vibes…

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  8. CableLabs does set standards for the cable companies and they are using Voip codecs by Gips and Broadcom. They are narrowband codecs, not wideband, but they do have a standard.

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  9. Well, perhaps it’s just that I’m still bitter at Verizon. To be fair, the cable guy did break off a large chunk of the wall and never replaced it while installing the cable. :)

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  10. [...] Om has an interesting and well-thought post online entitled The State of VoIP – Pretty Good If the market trends remain the same, then we will have around 4 million VoIP subscribers in the US by end of 2005, up nearly 300% from a million subscribers at the end of 2004, according to latest data from Telegeography. The revenues have ramped up equally fast – up 473% from 3Q 2005 to $304 million. [...]

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