Internet Telephone Service

VoIP Business is Booming

May 12, 2005

Voice over Internet Protocol is on the rise, are you on board? In 2004 VoIP services brought in $1.3 billion in sales and is expected to bring in $19 billion by 2009 in North America, according a recent report by Infonetics Research and NewMarket Technology Inc. VoIP currently represents one percent of wireline carriers in North America but with new technologies such as better security and service bundling, Infonetics predicts that VoIP service will continue to be on the rise. Philip Verges, CEO of NewMarket stated "The primary value proposition of VoIP is an overall telecommunications cost savings. The biggest impediment slowing a more rapid growth of VoIP in North America is the existing multi-year, last generation telecommunication technology contracts in place throughout the marketplace. Analysts are forecasting meteoric VoIP sales growth over the next four years. We believe a large part of this growth will come from the maturing of the existing multi-year telecommunication contracts and their subsequent replacement with VoIP contracts. It has been our position that heavy North American VoIP marketing efforts before now would have been premature and risked expending capital that could be engaged more efficiently at a later date and, therefore, we have concentrated on tuning our VoIP service offering with early pilot customers. We are now enthusiastic about the VoIP market opportunity emanating from the maturing incumbent telecommunication contracts."

It is estimated that by the year 2005 there will be between 2.8 and 6.7 billion residential VoIP lines being used in North America.

"VoIP services are relatively new to the telecommunications scene, so the growth rates will be extremely high as communication networks and services trend towards VoIP. As carriers migrate their network toward IP over the next five years, more services are inevitably next-generation VoIP services. Our forecast also assumes that revenue growth is due to incremental revenue from add-on VoIP applications, such as conferencing, remote-office integration, presence/location-based services and collaboration" states says Kevin Mitchell, directing analyst for Infonetics and author of the report."

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