Cable multiple systems operators (MSOs) are in the early phases of what could become a no-holds-barred battle with the incumbent local exchange carriers (ILECs) for a slice of the consumer voice market. Looking toward the future, IDC expects U.S. cable companies to sign up 19.7 million customers for voice services by 2008, generating an additional $11.8 billion in revenue.
According to a recent study conducted by Ipsos-Insight for the AT&T Customer Insights Group, 74% of US consumers are aware of voice over Internet protocol (VoIP), but primarily when it is specifically referred to as “broadband phone service” or “Internet telephony.” Ipsos compares this level of recognition to just 19% of consumers who are aware of Wi-Fi and a strong 68% aware of DSL. Despite the widespread awareness of VoIP, only 6% actually use it at home. 52% of those people use VoIP as their primary phone line, 44% as secondary.
Worldwide sales of Internet phone equipment rose 31% in Q4 2003 and could triple by 2007, as demand surges for voice over Internet Protocol gear, according to analyst firm Infonetics Research.
In Q2 2003, the average selling price (ASP) of an IP Telephone fell 7% QTQ to $193. This drop can be largely attributed to the market leader, Cisco, who reduced some prices and introduced new low cost models. We are forecasting more modest ASP declines during the coming year (to $185 in Q2 2004) as most IP Telephones continue shipping on enterprise PBXs, where phone choices are limited by proprietary protocols. Further into the future, ASPs should decline more quickly as more IP Telephones ship for service provider VoIP offerings, where open-standard, lower cost phones will dominate.