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Fuelled in part by consumers looking to add value to their telephony service, IDC expects that the number of U.S. subscribers to residential VoIP services will grow from 3 million in 2005 to 27 million by the end of 2009. But before that VoIP providers will need to convince the clients in VoIP’s potential and reliability.

Although it has been slow to develop in the U.S. and elsewhere, VoIP is finally beginning to show its potential in the consumer market, IDC believes. Much of the recent success is the result of marketing VoIP services on the basis of price. However, carriers will need to educate residential users on the features and functions of VoIP service to avoid a pricing war. Integrating applications and enabling convergence are critical capabilities that carriers will need to offer in the years ahead.

“VoIP must prove that it is more than just a cheap replacement for POTs service,” said William Stofega, senior analyst in IDC's VoIP Services Research program.

Although the market is already crowded with traditional and next generation carriers, IDC believes that even more service providers, including cable MSOs, will launch consumer VoIP products and services in 2005.

“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. However, it is important to remember that the market for VOIP services is still in the very early stages of development and carriers and equipment vendors need to plan for a marathon,” Mr. Stofega added.

Recently released results of an X-bit poll demonstrate about 25% of surveyed already using services like Skype and Vonage, while 28% feeling positive about using them.  But another 60% of respondents still would prefer means of communications different from Internet telephony – landline, cellular phones, email or instant messaging.

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