VoIP Moves in to Disconnect Landlines

With lower prices and unlimited calling, Voice over Internet Protocol (VoIP) is becoming an imposing force for landlines to face. Mintel Comperemedia, a competitive intelligence service that analyzes direct mail and print media, estimates that in the first five months of the year, 77 million direct mailings were sent to U.S. consumers. This statistic has already shattered the 60 million mailings sent throughout last year.

The surge in mailings comes in part from the efforts of key players in the VoIP market, such as Vonage and Time Warner. This April alone, Comperemedia found that Vonage distributed over 18 million pieces of direct mail. Vonage is only one of the new players spurring growth in the industry. Since 2004, Comperemedia has captured direct mail from 11 new companies that have begun promoting VoIP services.

In the next four years, Mintel predicts that close to 20 percent of households will have some version of VoIP. It is estimated that there will be over three million VoIP subscribers by the end of this year. At this point, VoIP is still a relatively new technology. The general public is not yet comfortable and has been unwilling to make VoIP a primary method of communication.

"For VoIP to really become the 'new thing,' it needs to be as reliable and easy to use as a landline," said Mark Aguinaldo, research analyst for Comperemedia. "Only when there is a seamless service and an established trust will VoIP really be able to take off."

While VoIP is not expected to surpass landline services any time in the near future, the service is gaining ground. According to Mintel projections, the number of landline installations in U.S. households is expected to decline four percent between 2005 and 2010. But with most VoIP providers offering service for about $20 to $40, the traditional landlines will be forced to offer more competitive prices.

VoIP activity naturally coincides with the widespread establishment of high-speed Internet. Since VoIP relies primarily on high-speed Internet service, the creation of the infrastructure has established a crucial platform for VoIP to grow. Between this January and May, there have been roughly 200 million high-speed Internet promotions. This is a 75 percent increase from high-speed Internet promotions seen during the same period in 2004.

"Just as we have seen mailings for VoIP growing, so too have the offers for high-speed Internet," said Aguinaldo. "As this complementary technology finds more users and its capabilities are understood, VoIP will push ahead into a new phase of growth."

Posted on Jul 31, 2006  Reviews | Share |  Digg
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