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U.S. Trails Europe in Residential VoIP Adoption

7:00 am on July 16, 2007 | Category: Business, Telecom Services, Telephone, VoIP

The United States is falling behind European markets in consumer VoIP adoption, according to a recent In-Stat study, which predicts that this growing gap could further stifle investment in America’s IP telephony sector.

A total of 14 million Europeans signed-up for VoIP in 2006, bringing the total number of residential VoIP subscriptions to 19 million at the end of December. In-Stat says that this number is still rising dramatically, and should reach approximately 34 million by the end of this year.

The U.S., by contrast, added just 4 million VoIP users last year, for a total of 10.6 million subscriptions, and is expected to show growth of around 50% this year as cable companies increasingly enter the digital home telephone market.

Yankee Group analyst, Zeus Kerravala, responded to the study with a prediction that VoIP demand would remain low in the U.S., since Americans already pay less for traditional landline service, and make far fewer international calls than their European counterparts.

â€œWhere the value proposition for VoIP is simply cost savings, you are never going to see the kind of adoption rates in North America that you see in Europe,â€ Mr. Kerravala commented.

In-Stat analyst, Keith Nissen, predicts that a lack of interest in IP telephony among American consumers could dissuade major telephone and cable providers in the nation from investing in the technology. It could also limit the amount of venture capital funding available to North American VoIP startups such as Vonage and SunRocket, he noted, discouraging innovation and reducing the widespread availability of alternative telephone services.

The solution, according to Nissen, is for U.S. carriers to take the plunge of consolidating their landline and mobile phone networks, using VoIP technology, and encourage the creation of next-generation devices like dual-mode IP handsets.

â€œCarriers must engage VoIP,â€ Mr. Nissen commented. â€œThe will not grow new revenues selling traditional voice. They will do that with new converged multimedia applications.â€

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