VOIP Market Will Stabilize in 2010, Dell'Oro Says

With the expected growth in the housing market and aggressive pricing bundles from service providers, the VOIP market, which has been hammered by the shaky economy over the past two years, should begin to stabilize in 2010, according to Dell'Oro Group. The number of VOIP subscribers should grow, but the equipment market may contract a bit because of price declines, the analyst firm said.

An improved housing market and aggressive pricing bundles by service providers will help stabilize an IP telephony market that has suffered through two years of deep declines, according to market research firm Dell'Oro Group.

In a report Feb. 10, Dell'Oro analysts said they expect that the number of subscribers to VOIP (voice over IP) services will grow in 2010.

At the same time, the improving economic picture will mean that network modernization projects that were put on hold during the recession will now get a boost, they said.

However, even as shipments of VOIP equipment increases, overall the market will probably contract slightly in 2010 due to the price declines, according to Dell'Oro.

Looking ahead, the VOIP market will see slow but steady growth over the next four years, with increases in the low single digits through 2014, according to Dell'Oro analyst Greg Collins.

"Future growth in broadband subscribers will likely be boosted over the next five years by government initiatives, such as the National Broadband Plan in the United States, which will target greater availability and adoption of broadband services to hard-to-service customers and customers who otherwise are unable to afford it," Collins said in a statement.

Growth in VOBB (voice over broadband) will closely follow broadband deployments, though such deployments will not impact the equipment market until 2011, Collins said.

It will be around then that regulations and spending grants will get finalized, he said.