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Research Says European VoIP Growing Strong
2007-07-30
However, while VoIP services are growing rapidly in all of western Europe, a closer look reveals stark differences in subscriber numbers, market penetration and growth rates across Europe, says TeleGeography.
Some markets, like France and the Netherlands have already reached a large portion of homes; others, like Spain, have low penetration levels, but are growing at a blistering pace, according to the report.
To the dismay of incumbent telco's (which the report claims find the idea of 'free' IP Telephony "a trifle communistic"), the adoption of VoIP by European consumers is growing at a blistering pace. At the end 2006 there were 15.6 million consumer voice-over-IP (VoIP) lines in service in Europe, up from 6.5 million in 2005.
That represented 247 per cent growth over 2004 though when there were only 1.8 million VoIP lines were in Europe. That represented only 1 per cent of households so the 2005 figure of 6.5 million lines accounts for 4 percent of households. 2006 with its 15.6 million represents 11 percent of households and the mid-2007 estimate of 22 million households show a solid trend.
VoIP subscriber growth is accelerating.
TeleGeography says the number of quarterly subscriber additions grew from approximately 1 million subscribers per quarter throughout most of 2005 to 2 million subscribers in much of 2006, and increased to 2.9 million subscribers in the final quarter of 2006. Revenues from VoIP services have grown at a comparable pace. Annual revenues from consumer VoIP services were € 583 million in 2005, and € 1.5 billion in 2006. Given current growth patterns, VoIP revenues should top € 2.8 billion in 2007.
"VoIP telephony services have rapidly gained acceptance in all of the countries profiled in this study, but the pace of adoption has varied widely. VoIP growth in France has been particularly spectacular: at year-end 2006, France had 6.6 million IP telephony subscribers, comparable to the total number of subscribers in Germany, the U.K., the Netherlands and Italy combined. France accounted for 42 percent of Europe's 15.6 million IP telephony subscribers at the end of 2006. Conversely, only two percent of households in Austria subscribed to VoIP telephone service, and less than one percent of households in Spain had such a service," says the report.
TeleGeography projects that VoIP subscribers in western Europe will grow from 15.6 million at the end of 2006 to 29.9 million by the end of 2007, and will reach 61 million by 2011. This growth would drive VoIP penetration from 11 percent of households at year-end 2006 to 40 percent of households by year-end 2011.
"Since VoIP service providers charge far less for their service than traditional operators, it should come as no surprise that VoIP operators generate lower revenues than their switched counterparts. Western European VoIP service providers generated approximately € 1.5 billion in 2006, a sum that is projected to increase to € 5.4 billion in 2011. Compared to revenues from traditional, fixed-line phone services, VoIP revenues are quite small. Nevertheless, VoIP could have a disproportionately large effect on "POTS" (plain old telephone service). Revenues from PSTN fixed-line telephony are expected to decline from € 44.7 million in 2006 to € 25.2 million in 2011.
"VoIP's effect on traffic revenues likely will prove particularly severe. Due to pressure from VoIP providers, we anticipate average per-minute prices for calls from fixed-line phones to decline over the forecast period. Pressure from VoIP providers has compelled most European fixed-line incumbents to offer VoIP services of their own; even many incumbents that rely on switched services have launched monthly product offerings with free, unlimited calls to domestic fixed-line phones," says the researcher.
By Adam Gosling
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