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VoIP in Crisis
2007-04-05
Once the exclusive preserve of startups, techies and hobbyists, voice over Internet Protocol communications has entered the mainstream, where it has been aggressively adopted by U.S. cable operators.
Cable operators control a combined 71 percent of the U.S. VoIP market, which now counts almost 10 million customers. In the last quarter alone cable groups added another 1 million customers, said Bruce Leichtman of Leichtman Research.
Market leader Vonage has 23.9 percent of the market, but investors and analysts are worried it may be forced to shut down after a U.S. court recently ruled that technology used by the publicly-traded VoIP company violated patents held by Verizon Communications. The technologies in question are used by most other VoIP companies, raising fears that they may also be forced to adapt or shut down.
Cable and phone companies combine voice calling, Internet access, TV service, and sometimes cellphone service into discounted bundles that have proven popular among American consumers. Consumers get significant discounts on all three or four services for accepting them from the same company, but consumers are heavily penalized for dropping even one of the services.
“Cable companies have the advantage of being able to offer service bundles including voice, and now the phone companies are doing the same,” said Mr. Leichtman.
Time Warner Cable (TWC) has 21.1 percent of the U.S. VoIP market, while Comcast owns 19.9 percent, putting them both within shouting distance of Vonage. Cable operators now service 80 million U.S. homes, up from 33 million just two years ago, according to Mr. Leichtman. Cable leader Comcast will reach 10 million more homes in 2007, while TWC will add 6.4 million customers.
The Bernstein report suggested it was only a matter of time before Vonage was eclipsed by Comcast and Time Warner Cable. The trend also pointed to trouble for upstart VoIP players such as Cordia, Netlogix, Sagevone and CallCentric.
“Cable share gains were accelerating well before the Vonage ruling,” the report said. “The rate at which Comcast was and is adding subscribers…suggests that [Vonage’s leadership] could be short lived.”
By Cassimir Medford
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VoIP Providers Statistics |
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Providers in database: 3315
Users Online: 178
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