Fixed line broadband subscribers are increasingly opting for voice over IP and abandoning traditional fixed line telephone services, with a new report claiming that the VoIP market is escalating at a rapid pace expected to generate $40 billion a year by 2015.
Point Topic, a UK based firm which provides information on broadband communications services worldwide, says Voice over IP has over 120 million subscribers worldwide, with data revealing a massive jump of 12.6 percent in services during 2010, giving global revenues of $17.3 billion.
In the Asia Pacific region, the number of VoIP subscribers showed a year on year increase of 16.45 percent last year.
With services like Luxembourg registered Skype offering free or cheaper calling rates, users are increasingly opting to substitute their PSTN call services with Internet telephony.
John Bosnell, a senior analyst at Point Topic said: “The growth of VoIP has been bumpy but shows signs of acceleration,” he said, noting that consumers are switching from standard telephone systems to an end to end IP service that provides voice services at attractive rates, while adding further benefits.
And with the broadband market increasing as a whole, the research firm says all its consumers are potential customers.
“We expect there to be over three quarters of a billion fixed line broadband subscribers by the end of 2015, in theory all of them are targets for VoIP,” said Bosnell.
However, the firm warns that there are many variables that can derail optimistic forecasts.
An increasing number of subscribers, for example, rely on mobile services without any fixed line telephone service at all. However, operators are looking at marrying this trend with the market for Internet telephony services provided by firms like Skype to make for some attractive opportunities.
Skype calls can be made via a mobile, connecting to the Internet using WiFi (usually free) or 3G ( which could be expensive depending on the tariff).
Skype was bought by Microsoft for US $8.5 billion last month, and has 663 million registered users, with around 150 million making regular users.
However, at the end of 2010 it had around 9 million paying users generating around $8 a month on average. 42 percent of its minutes in the Q4 of 2010 were video telephony calls.
However, while Skype has ensured there is a demand for video calls, the company has created an expectation that it is a free service, according to Point Data, which makes monetising video calls difficult for operators.
In a bid to increase revenue from its video calling services, the firm is now looking to launch advertising on its services, and has already begun running ads in the US, UK and Germany.
Boswell said: “If Skype continues to grow as it has been and manages to keep its ARPU (average revenue per user) at the current level then it will be generating in the region of $2 billion a year by the start of 2016. If you work hard and manage to marry your internet telephony service with a major mobile device manufacturer and solve any number of technical and regulatory issues, the market could really explode.”