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Global VoIP Market Takes Hold

  |  August 24, 2006   |  Comments

The voice over IP (VoIP) market grew 83 percent worldwide in 2005, with pure-play, cable and telecoms all competing for market share.

VoIP rose from 10.3 million to 18.7 million subscribers worldwide through the course of 2005. This 83 percent growth is detailed a report from Point Topic.

Combined, the number of people paying for PC-to-phone calls (4.7 million) and retail VoIP (telephone-to-telephone) was close to 24 million in 2005. The previous year, the contingent was 14.4 million users. Japan, France, and the U.S. are the dominant VoIP markets, though Germany, the Netherlands, Norway and other European countries reported strong growth early this year.

The U.S. market grew from 1.4 million subscribers at the end of 2004 to 4.6 million in Q4 2005, more than doubling in size. Pure-play provider Vonage continues to be the largest VoIP service carrier, though cable companies represent a collective threat. Time Warner alone added 900,000 customers in 2005. Domestically, VoIP providers tend to offer their products under the label "digital telephone" rather than VoIP.

In Europe, France is the dominant VoIP market player. The country reached 2.8 million paying VoIP subscribers, excluding Skype users. France Télécom increased its subscriber base from 144,000 to 830,000 in 2005.

The Asian market shows the slowest growth, mainly due to saturation in Japan and regulation barriers in China. China is in a trial phase due to government restrictions. Research indicates PC-to-PC and PC-to-phone activity already present in China, despite government authorization.

Point Topic compiles data from ISPs, telecoms and other providers of VoIP services for the report.

Worldwide VOIP Subscribers by Region and Type, Q4 2004 and 2005 (000)
RegionNumber of VoIP users ('000s) Q4 2005Q4 2004
Asia Pacicific88627071
North and South American45831389
PC to phone1869910324
Skype etc*47304050
Source: Point-Topic, 2006

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Enid Burns

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