Net telephony set to surge, IDC says

Voice over Internet Protocol is finally starting to overcome what has so far been a trend of slow growth, the market researcher says.

The number of residential Net phone subscribers in the United States is set to grow from 3 million in 2005 to 27 million by 2009, according to data released by IDC on Monday.

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 research firm 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, IDC 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."

Locating local internet providers

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