VoIP Market’s Identity Crisis

Up or Down? What’s it going to be?

VoIP market growing in cable sector, yet shows downturn in first quarter subscription lines

Being in VoIP marketing, I read a LOT about the VoIP industry during the day.  One of the things that confuses me is how more households can be utilizing VoIP lines (particularly through cable providers), yet the market seems to claim that VoIP subscriber line orders are shrinking.

I, for one, am confused.  How can an industry growing in homes and businesses across the country be shrinking? Seems kind of contradictory to me.

First, the bad news.

JR over at iLocus wrote a post on May 20, saying that the VoIP subscriber lines market shrank 19 percent in the first quarter.  The post stated:

In 1Q08, vendors shipped a total of about 7.9 million VoIP Subscriber Feature Server licenses for deployment in service provider networks generating $144 million in revenue. The number of lines is down by 19% Q-o-Q. The 3Q07 and 4Q07 quarters however were unusually high growth quarters for VoIP Subscriber Feature Servers.”

Meanwhile, on a day prior, May 19, Om Malik at GigaOm produced a post on VoIP booming in the U.S. thanks to cable service providers like Comcast, Time Warner, Cox, Cablevision and Charter.

Despite all the troubles with VoIP service providers such as SunRocket and Vonage, VoIP as a technology seems to be doing quite well in the U.S., according to data from Telegeography. As of the end of March, there were 16.3 million consumer VoIP lines, or about 13.8 percent of U.S. households, and 27 percent of households with broadband lines installed.”

Most of the new customers are coming from RBOC’s (At&T, Verizon and Qwest), with that industry losing 17.3 million residential telephone lines, and VoIP service providers gaining 14.4 million new customers.  According to Om’s post, nearly 80 percent have come from cable companies.

So where does this leave the reader or manager inquiring about the industry?  From the way I comprehend it, people are using their current broadband lines to incorporate VoIP, rather than having to buy new lines.  Considering that half of American homes have broadband Internet, new lines are not necessary.

But the good news is that people are jumping onto VoIP, and will have a need for more VoIP systems and services.  The telecom that could is growing in a big way.

Garrett Smith

Garrett is the former VoIP Supply CMO.

View Comments

  • Nicole,

    Great post.

    The market instant shrinking, it just slowed down last quarter.

    You can look at the market in a few ways, hence the discrepancy:

    1. Quarter over quarter growth (like JR @ iLocus).

    2. Overall market penetration (as Om did)

    Rest assured that the market IS growing, however, as the market matures, it is inevitable that it won't grow AS fast as it has in the past.

  • Thanks Garrett for the clarification. It is also comforting to know that VoIP has become not just an emerging technology, but now an accepted form.

Share
Published by
Garrett Smith

Recent Posts

Watch Now: 2025 April VoIP News Update

https://youtu.be/WsVpLUdxYuQ?si=g7Arw3u20MWfKq8q We're back with more VoIP News for April 2025! In this month's episode, we'll…

7 hours ago

How To: How to Expand Your VoIP System with Gateways and Adapters

Growing pains don’t only happen to people, they happen to businesses too! It’s fantastic that…

1 week ago

Did You Know: Your Network Infrastructure Has to be Ready for New or Upgraded IP Paging

When looking into new or upgraded IP paging equipment, many people don’t realize that you…

2 weeks ago

Viking Panel Phone K-1900712LIPEWP: Product Feature and How to Register with Sangoma PBXact

https://youtu.be/Gex7e6jUGSA?si=ts4-9p6JlWS4ZsC8 If you need a rugged, reliable VoIP panel phone that auto-dials with ease, the Viking…

3 weeks ago

Viking VoIP Emergency Phone E-1600-IP-EWP: Product Feature and How to Register with Sangoma PBXact

https://youtu.be/FE2kcF7KjgQ?si=inw4thEr2thxgGeL When it comes to security, you should never cut corners. Having something that you…

3 weeks ago

Watch Now: 2025 March VoIP News Update

https://www.youtube.com/watch?v=X2_HXAv73FI Your March VoIP News Update is out now! This month we showcase an awesome…

4 weeks ago