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Report: VoIP growth will be pressured by wireless

Tue, 04/29/2008 - 8:04am
Brian Santo

The cable industry is likely to continue to grow residential VoIP, but cable’s hold on new phone service subscribers could be tenuous, SNL Kagan suggests.

In a new study called “Cable Looks for Phone Share Gains Amid Change,” SNL Kagan analyzes the telcos’ loosening grip on the market and the opportunity created for alternative services. In the past two years, the telcos’ share has dwindled from 90 percent to 74 percent of total connections, with the five-year outlook estimating another 23 percent drop.

Meanwhile, total cable voice subscribers should reach 31.4 million in 2012, good for a market share of 26 percent.

But cable companies and telcos alike will have to contend with wireless replacement services gaining momentum. According to SNL Kagan, approximately 12 million households currently opt for a wireless-only phone connection, with that number expected to increase to about 26 million in 2012 – or about 22 percent of the market.

"The maturing of the younger, more tech-savvy demographic, combined with emerging technologies (such as femtocell) set to improve wireless coverage and reduce costs, will further promote the position of wireless services," said Ian Olgeirson, senior industry analyst for SNL Kagan.

SNL Kagan also evaluates the role of independent Internet voice providers and projects that the number of customers will decrease in the next five years, largely due to the strength of cable providers in the IP voice market.

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