VoIP Growing Statistics

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1 VoIP Growing Statistics We often hear about VoIP services astonishing growth, internet telephony tremendous success and VoIP revolution. Today we will try to be more objective, avoid these emotional epithets and take a look at the statistics. In this article, we gathered information from different sources (statistics agencies, market research groups and VoIP websites) and we should note that sometimes figures given in their reports considerably differ. Estimates of the total VoIP market vary greatly due to the problems of definition, and because of the different approaches in use. Quantifying the number of VoIP users, or minutes of traffic is not easy, as it is part of a general migration to IP-based services. What obvious however, is that the VoIP market is growing faster and faster all over the world in terms of subscribers, revenues and traffic. VoIP vs traditional telephony For example TMC experts say that the global VoIP services market grew 33% in 2008 to $30.8 billion. VoIP continues to develop as a technology and an offering. The services using IP-based networks have grown throughout the year on the basis of features, pricing and availability. The industry success is stimulated by the US Federal Communication Commission decision not to control or limit voice traffic over the Net, and the low price of these services. With low barriers to entry, competition is growing making companies differentiate services, improve quality and reduce prices. In spite of the prices decrease, the cost of VoIP allows the providers to continue generating the profit margin that traditional phone companies have enjoyed. This fact has stimulated them to cooperate with VoIP-companies. SNL Kagan reports that in the United States households increasingly replace landlines with VoIP. In the 2007 and 2008 the share of common carriers in home telephone market decreased from 90% to 74%. Experts predict a further 23% drop over the next five years. According to SNL Kagan it will be determinated by the progress of cheap cable VoIP that captured the attention of public. Specialists consider that 31.4 million USA households will use a VOIP as the main and the only home phone line by Landline operators will capture 26% of the home phone market within 1 / 5

2 the same time, then stabilize with a market share of 27%, according to SNL Kagan s ten-year outlook. Another source, Pike & Fischer s Broadband Advisory Service, gives a bit different figures. It reports that need for VoIP services in the US will continue to increase over the next two years, and 8.5 million more Americans will sign-up for IP phone offerings within that time frame. The Pike & Fischer s research forecasts a 14% growth rate for the VoIP market over the next five years, and predicts that 30 million US households will use some form of VoIP by the end of Europeans are also taking advantage of healthy competition in the communications sphere. Approximately a quarter of households have now given up their landline telephone subscriptions in favor of mobile phones and VOIP, with Finland (61%), Portugal (48%), and eastern Europe (39%) showing the highest number of cord cutters. VoIP is becoming more and more popular. It is used by 22% of households with internet connections. The number of VOIP-users is notably high in Latvia (58%), Lithuania (51%), the Czech Republic (50%), Poland (49%), and Bulgaria (46%). Consultancy Booz and Company says that in Great Britain an increasing of quantity internet users are going to utilise VoIP in their homes. As their study reveals, 44% of consumers are eager to use VoIP in the next six months. According to research firm Infonetics website «VoIP is going to reach an inflection point in which more traffic will go over VoIP than over circuit switch» in the not-so-distant future. The popularity of VoIP solutions grew by more than 30% through the course of 2008 and the technology's influence is likely to expand even further. The research finds that SIP trunking is the fastest developing segment of VoIP services. SIP trunking will hit an 89% compound annual growth rate from 2008 to 2013 this trend driven mainly by cost. Analysts expect hosted UC services to take off as well, with worldwide revenue doubling between 2009 and / 5

3 VoIP and business Many analysts pay attention to the growing popularity of VoIP-solutions in business sector. According to Infonetics Research, despite the economic downturn, businesses continue to switch from landline phone service to VoIP. They are being drawn to VoIP because of the cost savings and productivity enhancing features it brings. Although business VoIP services represented only 31% of the total, this area grew faster than residential services during the year. For companies deploying VoIP low cost is not the only reason for this choice. Nowadays "customers are a company's most important asset" and every company tries to do its best to satisfy a client. This means that providing an exceptional customer experience every time is very important to boost the perception and future prosperity of any business. Choosing the right telephony solution is extremely important for improving client service, which is where VoIP excels. Most companies want to save money as well as boost the customer experience, with VoIP able to help them achieve both of these goals. This is because the VoIP offers everything required to make a "good impression on callers", but without the high call costs of legacy telephone systems. Moreover VoIP is helping companies to enable remote working opportunities for their employees, and cooperate with freelancers from all over the world, that contribute efficiency and also cut costs. This is possible now because most households have a broadband connection. This forms the basis for the introduction of VoIP services, which can ensure domestic and international calls are made at a significantly reduced cost. Besides video calls can substitute face-to-face meetings and help to save money because business trips are becoming less necessary. Observing VoIP statistics we can not but pay attention at one fact. Last month Skype, the VoIP provider number one, announced that it has achieved the milestone of 100 million registered users worldwide. 3 / 5

4 Skype popularity has raised astonishingly since last year when it was bought by internet auction giant, ebay. At that time, Skype had a total of about 54 million users. In fact, number of people who regularly use Skype is still much lower than 100 million, as there are many infrequent and novelty users. The quantity of people that really pay for the SkypeOut PC-to-Phone сalls is smaller still, but with such an enormous base of users, it generates an impressive amount of revenue. Mobile VoIP outlook Today Skype offer its mobile version for different cell phones. By the way we should note the growing popularity of mobile VoIP applications such as Fring, sipmaniac and others. As the market research firm Analysys say mobile VoIP services will generate more revenue in the US than fixed VoIP by 2012, recording more than US$18 billion versus about US$12 billion for fixed VoIP. Although cellular VoIP is still a rare thing today, the upgrade of CDMA2000 1x EV-DO to Revision A beginning in 2007 and the upgrade of W-CDMA to 3G Long Term Evolution (LTE) beginning in 2010 will speed up mobile VoIP deployment. Some of the specialists consider that capacity, price and quality of service of current 3G network are not yet enough to make mobile VOIP calls more widespread than ordinary mobile calls. As Analysys reports EV-DO Revision A and 3G LTE will respectively create the cost benefits and new service opportunities that trigger the migration to mass market cellular VoIP. Experts predict that major cellular carriers Sprint and Verizon Wireless - both use EV-DO - would likely move to cellular VoIP earlier than Cingular Wireless and T-Mobile, which will probably upgrade to LTE technology. Analysys forecast that fixed and mobile voice minutes will be made up of 28% cellular VoIP by 2015 in the United Satetes and 23% in the EU. While European market researchers foresee that in the countries of the EU mobile VoIP will account for US$7.3 billion in revenues by 2012 compared with US$6.9 billion from fixed VoIP. Observing perspectives of the rivalry between cellular VoIP and mobile telephony experts 4 / 5

5 forecast that mobile VoIP will dominate over different local area and broadband wireless deployments including WiMAX. The cellular VoIP could have a major impact on mobile industry. Its development could negatively affect the profit margins of cellular carriers. In response to this tendency, mobile carriers such as T-Mobile and Vodafone have already tried to block access to VoIP due to fears that it will impact on traditional voice revenues. However, EU Telecoms Commission has claimed that it will act to ensure mobile operators allow users to make VoIP calls on their cells. Although many operators have so far resisted the use of VoIP services over mobile phones, it has been suggested that such a stance will not last long and in the years to come VoIP will be widespread on mobile phones. In this situation, mobile operators should keep in step with current trends and position cellular VoIP as a premium service, emphasizing quality of service and a range of value added features in order to resist the erosion of voice prices. The growth in demand of mobile VoIP was recently highlighted when Apple's iphone introduced the service. Over a million users downloaded the application within two days of it becoming available. Results In conclusion, we want to add that all the experts note the growing demand for VoIP services from individuals as well as businesses that will result in many more people making cheap or free calls over their mobile and home phones. Statistics show that VoIP is really going to change the way people communicate the present VoIP revolution may be compared with mobile revolution of last years. 5 / 5