U.S.
subscribers to Internet-based telephone services grew 21 percent to 6.9 million
in the second quarter, with cable TV companies expanding their lead in market
share compared with Vonage and other pure-play providers, the research firm
TeleGeography reported Wednesday.
The latest tally on the market for Voice over
Internet Protocol, better known as VoIP, marks a 153 percent increase compared
with mid-2005. But the second-quarter gain was slightly slower than in the first
quarter, when it grew by 28 percent, TeleGeography said.
VoIP revenues for the second quarter were up
173 percent at 7 million across the United States, compared with a
year-ago level of 1 million.
The report also added some credence to the worries
that have bedeviled the stock price of Vonage Holdings Corp., the biggest VoIP
provider, whose share price has tanked since an initial public offering in May:
Cable TV companies now account for 60 percent of VoIP subscribers, up from 52
percent in mid-2005. Vonage and other pure-play VoIP providers serve the
remaining 40 percent, or about 2.8 million subscribers.
"Even more significantly, (cable
companies) accounted for 68 percent of new subscribers added in the second
quarter, a sign that (their) aggregate consumer VoIP market share will continue
to grow in coming months," the report said.
Vonage raised about 0 million in badly
needed capital with its IPO. But its share price has fallen 60 percent amid
fears the company spends too much on marketing for new customers, and
subscriber losses may accelerate as the cable players and phone rivals AT&T
Inc. and Verizon Communications Inc. introduce competitively priced bundles of
TV, Internet and phone services.
While the cable companies entered the market after
pure-play VoiP companies, "their superior financial resources and
established customer relationships have provided them with a significant
marketing advantage," the TeleGeography report said.
Vonage Holdings Corp., its quarter sullied by
the embarrassing stock performance since its IPO, remained the industry leader
with 1.8 million subscriber lines. Time Warner Inc.’s cable TV business was
second again at nearly 1.6 million. The companies added roughly the same number
of accounts, with 243,000 for Vonage and 234,000 for Time Warner.
While Cablevision Systems Corp. remained the
nation’s third-largest provider, growing by 122,000 subscribers to 987,500, No.
4 Comcast Corp. is now on track to surpass it by year-end, TeleGeography said.
Comcast, which launched VoIP more slowly than
most of its cable rivals, posted a 73 percent jump in users during the second
quarter, finishing with 721,000.