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Story URL: http://www.silicon.com/research/specialreports/voip/0,3800004463,39129275,00.htm

VoIP primed to hit 27 million subscribers
Get ready for converged services

By Dinesh C Sharma

Published: Tuesday 05 April 2005

The number of residential net phone subscribers in the US is set to grow from three million in 2005 to 27 million by 2009, according to data released by IDC.

Home subscribers will lead growth in the VoIP (voice over Internet Protocol) market, IDC said, as leading traditional service providers start rolling out net phone offerings. The company noted that the technology is finally starting to overcome what has so far been a trend of slow growth.

Lower calling rates are attracting customers to net phone plans but carriers will have to educate consumers about the features and functions of services to avoid a pricing war, the company said. This could mean offering converged services in the future.

"VoIP must prove that it is more than just a cheap replacement for [traditional phone] service," William Stofega, senior analyst at IDC, said in a statement. "To do this, carriers will need to offer services that are compelling and affordable. The winners will use the flexibility of IP to design services that differentiate themselves from their competitors."

The VoIP market already appears crowded with traditional carriers, as well as newer specialised companies like Vonage. But IDC said more service providers, including cable MSOs (multiservice operators), will launch consumer products and services this year.

Dinesh C. Sharma writes for CNET News.com