More Home Users Call on VoIP Phones

Voice over Internet Protocol use continues to gain subscribers in the home telephone service market, according to San Francisco-based Telephia, a provider of performance measurement information to the converging communications and mobile industries.

Households subscribing to pure-play subscription VoIP services--meaning those who are either replacing or complementing existing traditional landline service--rose from 2.2 million in the first quarter of 2006 to 2.9 million in the second quarter, according to the survey.

The Telephia Total Communications Survey seeks to understand the attitudes of households about emerging communications services and provide integrated insights into household use and preferences involving converged landline and wireless phone, VoIP, Internet, and TV services. Rankings for the top pure-play VoIP providers are based on subscription services, and excludes free or pay-per-call VoIP services, according to Telephia.

"We believe that the market where the money is is really based on those subscription VoIP services," said Kanishka Agarwal, vice president of new products for Telephia. "We found that penetration is increasing. This doesn't mean that all of these houses are replacing their tradition phone lines because in some case it could be a secondary line."

Market Share

Vonage continues to have the largest market share of pure-play subscription VoIP consumers, with a 53.9 percent share. Telephia's Total Communications Survey for Q2 2006 shows that Verizon VoiceWing and AT&T CallVantage were tied for second place, with a 5.5 percent share each. SunRocket followed with a 4 percent share, while Lingo had a 2.6 percent share. NetZero Voice rounded out the top five with a 2.5 percent share.

"Vonage has the highest share of the market, partly because Vonage had gone very heavy into marketing and advertising," Agarwal said.

More than 27 percent of VoIP subscribers who are likely to change providers cite network quality as their primary reason for a switch, according to Agarwal. Improved customer service and better plan prices are also critical to why subscribers would switch service providers, he said. In addition, more than 12 percent of all VoIP subscribers are likely to leave their current VoIP service provider for another supplier within a year, said Agarwal.

"The battle is not over," he said. "Just because Vonage got these subscribers, doesn't mean they're going to stay with Vonage."