Carrier VoIP Sub Growth Begins to Recover

After a dismal couple of years, carriers will see a gradual turnaround in VoIP subscriber growth beginning in 2010, according to a new report from Dell’Oro Group.

“The total carrier IP telephony market is expected to stabilize in 2010 after two years of steep revenue declines,” the research firm reported. “During 2010, voice-over-IP (VoIP) subscriber growth is expected to accelerate due to an improving housing market and aggressively priced bundled service offerings from service providers.”

With government initiatives, such as the National Broadband Plan in the U.S., hastening the spread of broadband connections, “we forecast the market to grow in the low single-digits through 2014,” added Greg Colllins, a vice president at Dell’Oro.

In general, VoIP subscriber growth parallels broadband deployments. Prices for carrier VoIP services continue to decline, though, meaning that the revenues for the overall market will likely contract, at least this year. The carrier VoIP market should grow at a single-digit rate in subsequent years, Dell’Oro forecasts.

Carriers have found success with an “if you can’t beat ‘em, buy ‘em” approach to adding VoIP services, which are often seen as cannibalizing existing revenues from their core businesses. BT Group (BT) two years ago acquired VoIP provider Ribbit, in one of the first major acquisitions of a VoIP startup by an established carrier. Last month Telefonica (TEF), a major Euro-telco, finalized its purchase of U.S. VoIP startup Jajah, and last week Comcast Corp. (CMCSA) – already the leading provider of VoIP in the country, with 7.4 million subscribers – said it would acquire wholesale VoIP provider New Global Telecom Inc.

At the same time, carriers’ own bundled voice-over-IP services are starting to gain traction. AT&T (T) last month said its U-verse Voice digital home phone service had reached the 1 million subscriber mark, two years after it was introduced.

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