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In Europe, VoIP Grows & Grows

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Meg Whitman, former CEO of eBay, once famously said that voice was going to be free. She was wrong in ponying up billions of dollars for Skype, but she was right in her assertion about voice. Thanks to European broadband service providers treating voice as a loss leader to attract triple-play customers, local voice has become almost free in Europe, according to research conducted by Telegeography, a division of market research firm PriMetrica.

In 2008, VoIP represented 26 percent of total fixed lines in Europe but brought in only 10 percent of the total fixed-line revenues. I bet a big chunk of the VoIP-related revenues are coming from VoIP-to-mobile phone calls. Mobile calls are seriously expensive in Europe, and as a result, any attempts by mobile VoIP companies such as Truphone have been met with resistance by the carriers.

Telegeography estimates that there were more than 35 million European households with VoIP service in 2008. That’s up from just 1.9 million VoIP lines in service in Europe in 2004. Telegeography also estimates that, during every quarter of 2008, more than 2 million homes signed up for VoIP service. Just to give context, in the U.S., we had about 19.4 million VoIP subscribers at the end of 2008. In 2004, there were 1.2 million VoIP lines. Telegeography analysts estimate that Europe will continue to exceed U.S. growth in VoIP lines.


Household penetration of VoIP telephony at mid-year 2008 ranged from slightly less than 50 percent in France to less than 3 percent in Spain, and annual subscriber growth rates ranged from 544 percent in Portugal to a comparatively anemic 13 percent in Norway.

One of the main reasons why France is so far ahead of rest of Europe is because of the presence of a truly disruptive company: Iliad, which offers a flat rate triple rate service under the brand Free. (Related article: Xavier Niel, France’s Broadband Maverick). Free’s offering forced everyone — including incumbent France Telecom — to offer similar, simpler triple-play plans, resulting in increased VoIP penetration.

Other related posts: In Europe, they like their VoIP (2007), VoIP growing really really fast in Europe (2008.)

9 Responses to “In Europe, VoIP Grows & Grows”

  1. I always wonder why mobiles in UK are so expensive compared to America and Asia

    Mobile retail stores can be found on almost every street here. sometimes there are 2 or more of the same store on a single high street or shopping mall. We don’t actually need 10+ mobile stores at the same place and most of the staff just stood there doing nothing. But I guess huge number of stores is necessary to compete against other mobile operators.

    I have been using Connexin VoIP with my Nokia N95 for more than a year now. I use it wherever there is Wi-Fi, sometimes I stand outside a Starbucks to make cheaper VoIP calls =P.

  2. Rita Chen

    Mobile VoIP services is generation next, they not only offer cheap international calling options but also have more features i.e IM /utilities to connect end users. Jajah and Truphone new application to convert iPod into communication device and Vopium new mobile back services are amazing. We can predict that VoIP growth will be more faster in future.

  3. The impact of VOIP is truly staggering. Every time, I think I’ve gotten my head around its power and capability, I am surprised.

    A look at what VOIP has done to network traffic in the South Pacific:

    This weekend, a contact in Fiji called me on my cell phone in North America–a free phone call with the highest call quality I’ve ever experienced.

    Never thought I’d be saying this… long live the MagicJack!

  4. I remember how I started to tinker enthustiastically with VoIP three years ago, always hunting for the cheapest price.

    I have tried so many accounts and solutions. But now I will renew my DSL contract. Not only will my 16 Mbps DSL line become cheaper (€29,90), they will also include a voice flatrate for Germany fixed line in this cheaper price. There are wonderful VoIP services and cheap prices in my country. That’s why we use it so much. Calls to other countries cost 1 Cent per minute or they are free with the VoIP solutions I use. Calls to cell phones cost about 8 Cents per minute.

    There is nearly no tinkering necessary anymore. That’s why I didn’t updated my VoIP blog for such a long time.