News

Yankee Charts Cable VoIP Growth

9/05/2004 8:00 PM Eastern

The Yankee Group predicts cable companies will have the lion’s share of voice-over-Internet protocol telephone lines by the end of 2005, as MSOs roll out service over the next 15 months.

While Vonage Holdings Corp. — and, to a lesser extent, AT&T Corp. — have boosted phone companies’ VoIP market share to its current 66%, Yankee predicts MSOs will have a 56% market share by December 2005.

There are 1 million VoIP subscribers at present, and Yankee expects that to grow to 17.5 million by year-end 2008. Cable will have 10% market share of the local telephony base by then, Yankee said.

Time Warner Cable and Cablevision Systems Corp. are rolling out VoIP this year. Cox had launched in one market, while Charter and Comcast will test the service in 2004 with further rollouts slated for 2005.

Yankee predicts that VoIP will surpass circuit-switched customers for cable in 2006.

The major telcos are split over VoIP, Yankee said. While AT&T, Verizon Communications Inc. and Qwest Communications International Inc. have announced plans to offer local VoIP service, Sprint Corp., SBC Communications Inc. and BellSouth Corp. are holding back.

“These companies have the potential to capitalize on the market’s momentum,” Yankee consumer technologies and services senior analyst Kate Griffin said in a statement. “Although alternative players and the MSOs maintain a head start in the consumer VoIP market, U.S. telcos can leverage their knowledge of telephony delivery, marketing, support and brand recognition.”

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