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story category VoIP: Not So Big After All
1100 providers, and few make much money
(old news - 09:34AM Thursday May 05 2005)
tags: business · stats · VoIP
Business 2.0 Journalist Om Malik crunches the VoIP numbers from a new report by Infonetics Research. VoIP saw $1.3 billion in revenues in the U.S. for 2004. That's less than one percent of the total voice revenues in this country. While VoIP is frequently discussed as if it has become an all pervasive technology, mainstream adoption really isn't expected to soar until at least 2009. While there are 1,100 VoIP providers in North America, few of them are actually doing much business.

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Forums » VoIP: Not So Big After All
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pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD
·Comcast

Not just too many VoIP providers...

VoIP also competes with cellular providers in terms of being a cheap provider of "long-distance" phone calls. Most cell phone plans now include thousands of minutes and allow you to call anywhere within the USA. Unless someone doesn't have a cell phone, I don't see any reason for getting VoIP.
--
Hey Fast Eddie... you're next!

wwdubbia

join:2002-06-03
Clinton, NY

Re: Not just too many VoIP providers...

said by pnh102 See Profile:

VoIP also competes with cellular providers in terms of being a cheap provider of "long-distance" phone calls. Most cell phone plans now include thousands of minutes and allow you to call anywhere within the USA. Unless someone doesn't have a cell phone, I don't see any reason for getting VoIP.
The primary reason, from a business perspective, is the elimination of billed local minutes. Cost savings can more than justify the leap to VoIP if the environment is right. From a residential perspective, I tend to agree with you, however VoIP's biggest impact will be in the business arena.

pnh102
Reptiles Are Cuddly And Pretty
Premium
join:2002-05-02
Mount Airy, MD
·Comcast

Re: Not just too many VoIP providers...

said by wwdubbia See Profile:

however VoIP's biggest impact will be in the business arena.
I agree. I can see a lot of businesses moving their landlines to VoIP service to save money on long distance and other toll calls. For them the 911 issue isn't as big of a deal as it would be for a residential user.
--
Hey Fast Eddie... you're next!
ihaddsl

join:2001-12-05
/dev/hda0
·Comcast

Re: Not just too many VoIP providers...

911 is VERY important for business. They are required to provide 911 to their employees, and if they use a traditional VOIP provider, this is not a sure bet at the moment.

However, business are using (and will increasingly use) VOIP interally for routing interoffice calls across their own network (saving money by bypassing the telcos).

DrTCP
Yours truly
Premium,ExMod 1999-04
join:1999-11-09
Round Rock, TX

Re: Not just too many VoIP providers...

They can keep a few lines of POTS connected to their PBX and the rest could be supplemented via cheaper VOIP lines. It still saves money when making long distance or International calls.
neftv

join:2000-10-01
Broomall, PA
Well its not quite affordable yet for non-profit. I got pricing for like 45 person business and the cost per Cisco phone is like 350. And for a small non-profit company that is still just to much.

Proud VoIP user



Actually, there is a very good reason for using VoIP, even if you have a cell phone. You get to use ordinary phones, and you don't have to worry about "dead zones", which, in my case, is my entire apartment.

There is also the fact that, within reason, you don't have to worry about usage, or what time you call. I love my cell phone, but I don't want to pay a premium just so I don't have to worry about whether it is 8:59 or 9:00 to call my family.

There are some down sides, such as network problems causing voice outages, but the benefits (IMHO) far outweigh them.

Of course, I willingly admit the main reason I signed up was because I was sick of paying "long distance" all the time because my apartment straddled the line between the 301 and 410 area codes. The pizza joint three blocks away was a long distance call.

JammerMan79
Premium,VIP
join:2004-05-13
Prince George, BC
I'm just glad that in canada there is no such thing as local toll or local long distance calls

CrazyFingers

join:2003-10-01
Columbia, MO

John says...

It's ok, John Dvorak says that VoIP will be dead in a few years, and he's never wrong.
Dubya should create a cabinet post for him, with his track record, he'd be a shoo-in.
--
Burrow owl...burrow owl...
JSRoman
Premium
join:2005-03-10
Callahan, FL

Re: John says...

DING DING DING WINNAR!

CPM

join:2001-08-24
Miami, FL
He also says that wi fi would be dead as well. That was 2 years ago.

Phoenix2088

join:2002-12-04
Strongsville, OH
clubs:
John Dvorak shouldn't be allowed to have a column in PC Mag, he's a clueless idiot.

WhyADuck
Premium
join:2003-03-05

Three comments

First, if VoIP is so insignificant, why are the various regulators and state attorney generals (in SBC territory) and the like making such a fuss about it? Why not wait until the industry matures a bit before frothing at the mouth over it?

Second, bear in mind that there are a good many traditional long distance providers that have less than 1% of the market. When you are carving up a very big pie, even a small percentage can be quite satisfying.

Third, of course total voice revenues are going to be lower, because VoIP companies charge less! The people spending $25 per month for unlimited local and long distance service are not going to be a large a percentage of "total voice revenues" even though their numbers might be higher than the revenues would suggest, if you catch my drift. I'm not disputing that right now VoIP users are a very small percentage of that very large communications "pie", but anyone who uses total voice revenue as the yardstick for growth in the VoIP industry may someday be blindsided by the actual number of VoIP users.
Network Guy

join:2000-08-25
New York

That's fine by me

That keeps prices down, taxes out of the question, and competition on the up and up. I'm very thankful for VoIP, ESPECIALLY untaxed VoIP at that.
cbm
Premium
join:2000-05-05
Pottstown, PA

Just my 2 cents worth

First, in response to Neftv... Yes, a Cisco based system can be a large expense, especially for non-profit. You quoted a price of #350 per phone. But that doesn't include the cost of the system and software to run it on. I think in this particular discussion we are talking more about the actual line types, not the phone system. You could utilize an IP based phone system even if you don't have VoIP.

I believe the real benifits of VoIP is where a business will use it between locations and routing of phone calls. We utilize that at several of our larger clients and it works extremly well. However, the 911 issue is something that must be addressed by the phone system vendor. As a general rule, that type of service is provided by a regular POTS line. Most companies will also use this for alarm lines and backup lines in case the digital (VoIP, T1, etc.) lines go down.

Now, onto the costs. I've been trying to find documentation on this. But I have heard the reason you are hearing legislators discussing this is because they are trying to apply taxes to VoIP. the way they may try this is to apply a VoIP tax to each device, such as a VoIP phone. If anyone knows of this, please let me know.

Thanks,
Mike

fgrir

join:2005-04-15
Indianapolis, IN

Re: Just my 2 cents worth

I think the biggest problem with voip is line quality. If your on cable your line will be wishy washy due there erratic speeds. You might be ok with dsl but I still question how good the line would be during high internet traffic.Iv talked to people that had it in there business and had to go back to land lines due to poor quality. That user was on a cable connection.
Forums » VoIP: Not So Big After All


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