VoIP Sales Top $20 Billion in First Half, More Growth to Come

Maybe there is something to this idea that, in a recession, Voice over IP service is an affordable alternative to traditional telephone service.

In the first half of 2009, VoIP services brought in nearly $21 billion in revenue, with both residential and business services looking healthy and poised for even more growth for the second half of the year, according to a report by market research firm Infonetics Research.

Residential voice services still brings in the majority of revenue, with the number of subscribers growing 14 percent from the end of 2008 through the first half of ‘09. On the business side, the research firm said it expected IP Centrex and hosted unified communications service revenue to grow 26 percent year-over-year.

But the current sweet spot, at least in North America, is small businesses with fewer than 100 employees. In the first half of the year, roughly two-thirds of all IP Centrex seats sold went to small businesses.

In an earlier post, Andrew Nusca offered some insight into VoIP from K. Paul Singh, CEO of Primus, the parent company of Lingo VoIP services. In that interview, Singh said that VoIP has gone from being “a new thing” several years ago to a technology that people have become comfortable with. Now, that’s opened the door to Phase 2: Growth.

The technology, he said, gets better by the day, improving quality and allowing the operators to introduce new applications. Plus, the costs are lower. Pricing remains somewhere between $20 and $40 per month because it involves use of the public Internet. Said Singh:

We don’t have to pay telephone companies for “the last mile” — to originate the call. Slowly and slowly, more international customers will go onto broadband, removing telephone companies on both sides.

Comments

[PeterB:]

I continue not to understand why VOIP discussions never mention the solution I and my US-based kids use. The landline is local only (<$20/mo), and calls further than that are via a local number to a VOIP provider, 1.9c/min to any number in the US, no monthly fee, low rates to Europe (2.5c/min to UK, 5c/min to Czech Rep). Our cell phones use the same provider for all non US calls, same rates. Emergency 911 service is normal, no special issues (we had to use it a week ago), 1-800 type calls are normal, etc. Our total phone costs are <1/3 of the lowest rate I could find before.

Nov 02 07:10 PM

[Nextel Acce...:]

Voip was great for our house, until our DSL goes down a couple times a month....need more reliable internet before I switch again.

Nov 02 07:58 PM

[siriusflyer:]

Great time to buy, this stock will be up above 2.00 by december.

Nov 04 02:46 PM

[Abridge:]

LVLT has a great article on growth of Vo IP on website. Still to much capacity in space to make any money for companies Video demand from netflix and others will be key for growth. Voip is such a small part of the overall big picture

Nov 04 07:45 PM