Last month, I wrote that US Voice over IP (VoIP) subscriptions are skyrocketing. That was about VoIP in the U.S., but the VoIP story around the Globe was no different. Worlwide revenue from retail Voice over IP (VoIP) services almost quadrupled (4x) from $1.834 Billion in 2005 to $6.908 Billion in 2006, according to research by Point Topic.
North America, with the third highest number of VoIP subscribers (8.6 million), generated $2,411.7 million in revenue. Western Europe, with the highest number of VoIP subscribers, generated $2639 million in revenue. The Asia-Pacific region, a close second in terms of VoIP subscribers with about 14.5 million generated $1750 million,
Interestingly, North America had the highest Monthly average revenue per user (ARPU) at $20. Western Europe and South and East Asia had comparable ARPU at $15, while both Asia-Pacific and Latin America had an estimated ARPU of $10.
While some of the better known U.S. based VoIP providers, ala Vonage and Skyrocket, may bring up concerns about the viability of VoIP (and there are strategic issues with standalone VoIP service), VoIP is a phenomena that is here to stay – primarily because of the cost advantages and the flexibility and extensibility that comes with IP technologies. The cost advantage is because an IP network can be shared by multiple services or in other words, IP allows multiplexing of services. For example, with an IP network, a user can have both a VoIP session and a Web browsing session at the same time (whereas with traditional circuit switched voice service, both voice or fax cannot be used simultaneously on one connection). The flexibility and extensibility comes from the ability to transform voice into multimedia seamlessly as well as transform the service experience with enablers such as Presence.