U.S. subscribers to Internet-based phone services rose 18 percent (to 18.2 million) during the third quarter of 2006.

December 11, 2006
By Mae Kowalke
TMCnet Associate Editor

VoIP is well on its way to becoming a standard household feature, replacing or enhancing traditional phone service, although the initial surge in excitement about the technology may be waning slightly.

That’s what TeleGeography found in its latest look at IP-based voice services, AP said Friday. The research firm found that U.S. subscribers to Internet-based phone services rose 18 percent (to 18.2 million) during the third quarter of 2006. Impressive as that figure sounds, TeleGeography did note that the growth rate for VoIP services slowed for the second straight quarter.

Regardless of the slowdown, AP said TeleGeography reported that the VoIP market is now more than twice as big as it was roughly a year ago. That claim is backed up by figures showing U.S. VoIP revenues for the second quarter of 2006 reached $732 million, up from $298 the previous year.

Most customers probably know VoIP better as the phone service provided by Vonage (the biggest provider, with 1.95 million subscribers) or their cable provider. The three biggest cable providers of VoIP, AP said, are Time Warner (1.64 million subscribers), Comcast (1.35 million subscribers) and Cablevision Systems Corp. (1.10 million subscribers).

By the end of this year, AP said TeleGeography predicts, roughly 8.7 percent of U.S. households will subscribe to VoIP services. If that figure pans out, it will represent the addition of 1.5 million subscribers during the fourth quarter, boosting revenues for providers to $2.6 billion—more than twice the 2005 total, just north of $1 billion.