Vonage, Skype Seen Leading VoIP Adoption

Voice over Internet Protocol (VoIP) in U.S. homes is gaining traction. Service increased to 3.5 percent, or nearly 3.9 million households, in January 2006, up from 2.9 percent in June 2005, according to a study released Tuesday.

The report by consulting firm Telephia Inc. suggests that by January 2006, Vonage had secured the highest market share at 47.5 percent with service in nearly 1.9 million households, up from 40 percent in the year-ago period.

The Telephia Emerging Personal Communications Options (EPCO) survey suggests Skype follows Vonage with 11.8 percent market share, or 463,000 household subscribers. AT&T Call Vantage with 5.6 percent, or 218,000 household subscribers; Verizon Voice Wing with 5 percent, or 196,000 household subscribers; and Google with 2.5 percent, or 97,000 household subscribers.

More wireless subscribers use the service as their primary phone line, said Kanishka Agarwal, vice president of new products at Telephia. "About 30 percent of 18 to 24 year olds only have a wireless phone," he said. "VoIP has an appeal, because it's less expensive, about $5 monthly," he said. "We will see higher adoption in this age group."

Data shows 67 percent of VoIP early adopters believe voice quality has proven equal to traditional landline service, while 19 percent said voice quality was better than wired phones lines.Meanwhile, 71 percent of VoIP households reported Internet telephony offered reliability comparable with conventional wired phone lines. Sixteen percent considered VoIP to have better.

Vonage scored high on service reliability, with 91 percent of early adopters noting reliability was equal or better than landlines. Nearly three out of four of Skype's early adopter households thought it offered comparable service, too.

Manufacturers, such as Nokia, have begun to introduce duel-mode Wi-Fi and cellular telephone handsets, Agarwal said. "These phones plug into local routers in the home or office to connect into the VoIP service," he said. "These phones also have radio frequency chips that tie into the cellular networks, and that's how it plug and play into both."