VoIP Market Expected To Be Key Revenue Driver

The voice over Internet protocol market is expected to become a key revenue generator for broadband service providers by 2009, a market research firm said Wednesday.

The VoIP market is expected to contribute an overall value-added services market of $47 billion, which is in addition to the $43 billion that's expected to be spent on broadband access in five years, Juniper Research said.

"Broadband penetration has now grown to a level where the industry is on the verge of a revolution, as it is now economically attractive to launch value-added services to a mass audience," Juniper analyst Ian Cox said in a statement.

The challenge for broadband service providers will be to provision the new services as cost effectively as possible as revenues from existing fixed-line voice services decline, Juniper said. Flat-rate pricing for VoIP is exected to gradually replace fixed-line rates based on time and distance.

The decline in fixed-line revenue may, to a certain extent, be off-set by a reduction in operating costs for converged networks.The biggest opportunity for service providers is in voice services as VoIP takes over from traditional circuit-switched voice.