VOIP is a major contributor to rising broadband value added services, which generated USD $25.7 billion worldwide in 2007.
According to the latest data from Point Topic this represented an increase of 62 per cent on 2006 and the expectation is that growth will continue to be robust.
Of the service revenues generated worldwide, 56 per cent come from the combination of Voice over IP (VOIP) and security.
They are followed, in order of global revenue generated by online gaming, home networks, music downloads and video over broadband.
John Bosnell, senior analyst at Point Topic, said the success story of 2007 was VOIP. “Overall revenue has very nearly doubled, average revenue per user (ARPU) is up and take-up in major markets, particularly North America and Western Europe is growing quickly,” he said.
Bosnell said value added services were growing strongly and were increasingly significant in overall revenue terms.
“We estimate that value added services were 10 per cent of total broadband revenues, which includes subscriptions, in 2003, but by the end of 2007 that has increased to over 30 per cent,” he said.
“As it gets harder to make a profit in the hyper competitive line rental market the operators and suppliers have to look to add value, and revenue, with their service offerings.”
Point Topic splits VOIP into two segments, IP Telephony which means VOIP provided by ISPs and Internet Telephony, which includes services like Skype which route through the user’s PC.
Bosnell said it was difficult to measure active users of the Skype and its cousins, like the applications embedded in the popular instant messaging services, but Point Topic estimates put the worldwide number of active users at around 20 million.
Whilst the ARPU is relatively low on these services, IP Telephony on the other hand produces around 10 times as much revenue per user.
VOIP is not a bottomless well.
At the end of 2007 VOIP accounted for 27 per cent of fixed lines in France, many served via bundled deals. Market saturation is still some way off but not out of sight.
“We expect VOIP to continue to grow strongly in the next few years and in combination with other value adds, particularly IPTV, global revenues should continue to grow,” concludes Bosnell.