Indie VoIP players to have difficulty gaining market share: Decima study

New data from Decima Research Inc. suggests that independent Voice over IP (VoIP) service providers could have a more difficult time attracting subscribers than their telco or cableco counterparts. In a new survey of more than 2,000 Canadian residential Internet subscribers, more than two-thirds of those who indicated they were likely to subscribe to IP telephony service in the next 12 months said they would purchase a service from either a telephone or cable company. According to the research, more than half of VoIP intenders – those who say they plan to subscribe to the service either on a standalone basis or as part of a discounted bundle of services – say they are leaning towards purchasing VoIP services from a telephone company, while nearly one in five are looking at cable companies as their VoIP service supplier. Companies such as Vonage and services such as Skype fell into the "other" category representing about 5% of VoIP intenders. This doesn’t bode well for the likes of Vonage Canada, Primus Telecommunications Canada Inc. or other independent VoIP providers. The numbers "suggest consumers perhaps feel more comfortable choosing types of communications companies that they are familiar with and know offer quality, reliable service. They may also be leaning towards these companies since these are the ones that can offer the types of communications bundles that appear to be popular with many survey respondents," reads ’NET CALLING: The Canadian Consumer Market for Voice over IP services, a comprehensive Decima report analyzing the research results. Decima Research VP Mario Mota says the research suggests independent VoIP providers need to work that much harder at building their brand and promoting their services. "Clearly, the telcos and the cablecos have better brand awareness with consumers and that’s because they have large existing customer bases and have had a relationship with customers for many years. The independent providers need to show consumers that there are alternatives in the market that can deliver a quality product and service," he tells Network Letter. Power of the bundleBut, adds Mota, the propensity to select service from a telco or cableco may also point to the importance that consumers place on the availability of lower-priced bundled services. "Other than reliability of the service and voice quality, VoIP intenders place a lot of emphasis on the price of the service as a key determining factor in selecting a VoIP service," he says. "Price of overall service" and "free/cheap long-distance calls" ranked as two of the top four most important elements of a VoIP service, according to the research results. "Decima predicts that the availability of Internet telephone service as part of discounted bundles of communications services will be an important factor in helping to drive consumer adoption of VoIP service, which again suggests telcos and cablecos, or other companies offering bundled services, are perhaps best positioned to succeed in the consumer market," states the report.

Indie VoIP players to have difficulty gaining market share: Decima study

News | 05/10/2005 4:00 am EDT

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