Internet telephone service is mushrooming growing from a ‘pretty good idea’ to a realistic market contender to traditional phone service, at least if you believe the latest numbers released by the Telecommunications Industry Association (TIA).


According to TIA, the number of residential Voice over IP customers more than tripled to over 4 million users in 2005 and is expected to hit 18 million within the next three years.


The Figures:
2003 ? 150,000

2004 ? 1,200,000
2005 ? 4,200,000

2006 ? (est.) 18,000,000
These (TIA) figures do not include PC to PC VoIP connections, which make up a substantial part of the market.


The TIA has stated that the most substantial contributory factor in this dramatic growth is the huge increase in domestic broadband users, though others should be considered:


"VoIP works best over a broadband connection, and utilization of this existing connection also lowers the cost of providing the service," the TIA said in a statement.


US Broadband Figures:

2000 ? 4.5 million users
2005 ? 41.3 million users

2009 ? (est.) 70 million users
This works out at an approx. 14% annual increase


The TIA numbers also note that VoIP revenue is enjoying the same growth rate as VoIP subscribers:


Revenue Figures:

2003 - $25 million
2005 - $1.1 billion

2009 ? (est.) $5.1 billion
A 47% increase on a compound annual rate


Part of that growth will come from beyond the residential market.

"VoIP carriers are now moving beyond the residential market to address the small-business market and are beginning to introduce services geared to small businesses, which bundle a number of lines and minutes for a flat price or which bundle VoIP with broadband services," according to the TIA.


This stratospheric growth is frankly not surprising and was failry accurrately predicted by the industry. However, I feel that the predicted figures for 2009 are a stab in the dark and don't adjust for almost inevitable legislative and technical developments