Smith On VoIP

Number of VoIP Subscribers Doubled This Year

Explosive growth. That is what everyone always talks about when discussing the VoIP industry. But are the days of explosive growth gone for the VoIP industry? According to a recently released Telegeography report on the growth of the VoIP industry the number of US VoIP subscribers doubled from mid-2006 to mid-2007 from 6.5 million to 11.8 million. Great. What many fail to realize, is that Telegeography has the industry doubling in size again over the next FOUR years. This is a considerably slower pace then what we have come accustom to when we speak about the growth of the industry.

Why is the Industry’s Growth Rate Slowing

A primary reason that industry growth is slowing is that service providers have done a poor job of educating consumers on the benefits of “switching” to VoIP. The new wave of VoIP consumers are not as tech-savvy as their predecessors and the rash of mis-information in the mainstream media leaves the majority of the market confused, concerned or uninterested in the technology. Another reason for the slow down could be that teleco’s are offering better pricing. I have some friends who are getting Vonage like pricing their land-line providers - remember that copper is long paid for and teleco’s can lower their pricing and still maintain a profit. This is something most VoIP service providers cannot do.

While I am not down on the industry, as it still has a long time before it “peaks” the days of explosive growth seem to be coming to an end. They were fun while they lasted. Now it is time to see who truly is revolutionary and innovative, as those will be the ones that survive as the growth curve starts to flat line.

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