The race to convergence is on as the VoIP marketplace begins to pick up steam. The promise of cheaper telephone service delivered right over your broadband connection is simply too compelling for businesses large and small. The race to convergence is on as the VoIP marketplace begins to pick up steam. The promise of cheaper telephone service delivered right over your broadband connection is simply too compelling for businesses large and small. So, it should come as no surprise that everyone from startups to traditional telcos and even cable operators are jumping on the VoIP bandwagon.

Cable Operators Join The Fray

A major trend that industry watchers predict for 2005 and beyond is the introduction of VoIP services by cable operators. The reasoning is simple: Cable operators want to deliver voice services to customers who are already using the cable infrastructure for video and Internet access. The goal is to deliver all the multimedia services customers could ever want through a single pipeline.

This trend should concern traditional telephone companies. After all, VoIP eliminates the need for a dedicated, proprietary network for delivery of voice services. This unique voice-services pipeline gave the telcos an advantage that is quickly vanishing as customers discover they no longer need the telephone network to use telephony services.

The statistics demonstrate this trend: According to data collected by Infonetics, a market research and consulting firm specializing in data networking and telecommunications, the number of VoIP cable subscribers in North America increased from 50,000 in 2003 to almost 500,000 in 2004.

While that number is still rather low, the 900% increase is impressive. Infonetics' research also reveals cable operators almost doubled their expenditures on VoIP equipment (from $ 63 million to $ 123 million). Overall, Infonetics expects the increase in cable VoIP subscribers to continue as cable operators rush to cash in on VoIP.

Market research firm IDC predicts a tough battle between cable operators and local exchange carriers for the consumer voice market. Cable operators want a piece of the action, but traditional telephone companies are not going to cede any ground without a fight. Still, IDC predicts that by 2008, almost 20 million customers will subscribe to voice services provided by cable operators.

Enterprises Focus On Applications

According to research conducted by the Radicati Group, corporations are implementing IP telephony to take advantage of declining IP telephony equipment costs, upgrade older telephony equipment, and implement converged voice and data applications.

The Radicati Group's research indicates converged voice and data applications are a key driver for corporations. Examples of these include contact center, unified messaging, and collaboration applications that complement IP telephony and add value by improving communication effectiveness and productivity. As a further example, Radicati Group analyst Teney K. Takahashi points to new collaboration applications that combine email, instant messaging, and voice communications into a single application and interface.

A Tale Of Two Mergers

Two recent acquisitions took place in the telephony marketplace during recent months: SBC's purchase of AT&T and MCI's expected purchase of Verizon.

If nothing else, the acquisition of AT&T by SBC is ironic, considering that SBC was one of the initial Baby Bells spun off from the Ma Bell breakup that forever changed the industry. According to market research firm Nemertes, the merger will realize its benefits if SBC management allows AT&T to continue to push forward with its successful IP and e-services ventures.

As an example, Nemertes analyst Robin Gareiss points to AT&T's successful launch of its CallVantage VoIP service. Success, adds Gareiss, hinges on SBC management's willingness