• United States
Executive Editor

Stats say VoIP has a healthy future

Jan 05, 20062 mins

* Census Bureau offers good news for proponents of VoIP

The Bureau of the Census has statistics that indicate a healthy future for VoIP.

Numbers released in December say that cable Internet access was up 28% in 2004, the largest increase ever posted year-to-year for cable broadband Internet access.

The more homes have broadband Internet access, the more homes may try running voice over that connection, including commercial VoIP such as that provided by Vonage as well as a peer-to-peer VoIP like Skype.

While the Census Bureau had good news for proponents of VoIP who are looking for more advanced services that blend in other forms of communication such as video, instant messaging and e-mail, it had some sobering numbers for traditional phone carriers.

Revenue for wired carriers was down 5%, and revenue for long-distance carriers was down 17%. This won’t be surprising to service providers who have been battered by the popularity of cell phones and now VoIP. (Cell phone revenue was up 14%, to about $126 billion.) The investments traditional carriers have made in transitioning their networks to IP backbones and pushing broadband to customers have been in progress for years.

So the bad news for traditional carriers about dropping wireline revenue is offset by the encouraging news that the infrastructure needed for VoIP is more prevalent every day. The challenge is that other carriers – cable and satellite companies – already have fat pipes into customer homes. The challenge for the incumbent carriers is to transition their traditional customers to VoIP and other network services before competitors lure them away.

This means continued aggressive deployment of fiber to customers and an acceleration of services such as video on demand that can help pay off the enormous investment fiber requires.