Residential VoIP service is growing ever more popular. But customers appear highly confused about what they are buying and how the technology operates. Furthermore, significant security threats loom on the horizon.
A new report from research firm IDC predicts that U.S. residential VoIP subscribers will hit 27 million by the end of 2009, up from an estimated 3 million this year. Price will drive this high adoption rate, at least initially, but the more robust calling features VoIP offers will become a more dominant factor as carriers educate consumers about the technology.
Will Stofega, senior analyst in IDC's VoIP Services Research Program, notes that carriers and equipment vendors "need to plan for a marathon" because the market still is in an early stage of development.
Furthermore, carriers need to proactively educate and market the value of VoIP to avoid a bloody price war. So far, the technology is marketed primarily by price; Stofega notes that AT&T (with its ad campaign for CallVantage service) is the only VoIP service provider emphasizing features, not merely price.
"The winners will use the flexibility of IP to design services that differentiate themselves from their competitors," says Stofega. VoIP's main challenge, he adds, is to "prove that it is just a cheap replacement for POTS service."
All well and good. However, service differentiation might not prove so easy because there's already plenty of confusion about VoIP in the marketplace. A second research report, this one conducted by IQ Research and Consulting on behalf of SunRocket, a Virginia-based VoIP service provider, finds that although consumer awareness about VoIP has grown, only half of consumers realize that Internet phone calls can be made using a standard telephone.
Other interesting findings: Only 47% understand that Internet phone calls don't go through their computer; only 44% realize a technician isn't required to activate IP phone service; and only about 20% know that no special computer software is required to activate VoIP service.
"This survey ... reveals that despite significant progress, most consumers still don't realize how easy it is to use Internet phone service at home," concludes Joyce Dorris, SunRocket's co-founder.
And if all this isn't enough to roil the VoIP marketplace, security experts are warning that the technology poses a credible security threat. Dave Endler, recently elected head of the VoIP Security Alliance (VoIPSA), warns that threats to voice networks from viruses, Trojans and worms are increasing.
And David Lacey, director of information security for the U.K.-based Royal Mail Group, recently warned a security gathering in London that using one network for both voice and data makes enterprises particularly vulnerable and could trigger an electronic "Pearl Harbor-type event" by the end of 2007.
