By IDC
June 13, 2006

IDC views voice over IP (VoIP) as the next generation of technology to change the telecommunications landscape. The market for consumer VoIP services is still in its infancy, but IDC's future outlook points to exponential growth within the next four years. IDC predicts that residential U.S. VoIP subscribers will grow from 10.3 million in 2006 to 44 million in 2010.

The latest IDC forecast shows that VoIP will be used in 62% of broadband households in 2010. This forecast is based on the market assumption that the increasing penetration of broadband into homes combined with consumers' comfort with new modes of alternative communications will allow for greater consumer receptivity to VoIP.

Mobility, simplicity, and on-demand telephony top the list of trends that IDC believes will drive growth in consumer VoIP services. The opportunity for an alternative phone service combined with simple setup and hardware requirements is what will make VoIP a practical addition to homes. The potential for VoIP to combine with mobility will provide alternative service choices and devices that give users the experience of being able to communicate anytime, anyplace, anywhere.

It's this idea of simple and compelling applications to help make life easier that VoIP service providers should capitalize on, according to Will Stofega, research manager for IDC's VoIP Services program. "There is still much to do in terms of creating a product that catches the attention of Main Street," says. Stofega. "For those that are able to tweak their service offering to fit the ever changing tastes of the mass market, the potential growth opportunity is huge."

About the market research study
IDC's 17-page report, U.S. Residential VoIP Services 2006-2010 Forecast and Analysis: Where There Is Smoke, Is There Fire? (IDC #201638), examines the current state of residential VoIP as well as residential VoIP's prospects for future growth and how that growth will find specific and viable expression in the U.S. consumer telecom market. This study also examines the key drivers shaping this market, discusses potential FCC activities that could affect this market, and provides a five-year market forecast.