Broadband IP Telephonys a Small but Fast Growing Communications Service

With Vonage adding nearly 20k new lines a month and AT&Ts CallVantage promising to have 1 million subscribers by end of 2005, the US Broadband IP Telephony market will have strong growth over the next several years, according to In-Stat/MDR.The high-tech market research firm reports that, while there were only 144k subscribers at the end of 2003, lower service cost and compelling new communications features are driving service adoption. Broadband IP Telephony provides for voice communications over a broadband connection using Voice over IP (VoIP). The voice traffic can then either be routed over the public Internet or a carriers private IP backbone. Unlike older VoIP services, Broadband IP Telephony allows for both inbound and outbound voice traffic, and can function as a primary voice line. Other challenges facing this market involve service security and competing forms of voice services. In-Stat/MDR has also found that: At the end of 2003, Vonage had the largest share of subscribers, with 66% of the market. The combined efforts of cable operators had a decent share and other hosted Broadband IP Telephony providers controlled the rest of the market. Overall, the market for Broadband IP telephony in the US consists mainly of consumer subscribers. While this service targets primarily consumers, there are some business service offerings. However, the nature of the service limits it to only the smallest of offices needing few voice-lines. 10.3% of all broadband subscribers will utilize Broadband IP Telephony by the end of 2008.