The Impressive Growth of VoIP Adoption

VoIP subscribers are expected to approach 12 million by 2017.

Voice over Internet Protocol (VoIP) is an internet-enabled technology that permits the transmission of voice conversations using computers, tablets, smart phones, or Internet-connected telephones. The chief benefits of this technology are enhanced scalability, portability, and cost savings. Many businesses have already implemented VoIP technology in place of Plain Old Telephone Service (POTS). In fact, VoIP represented 20% of the business telephone market in 2014, and its market share continues to grow. This growth is expected to continue in the near term, with the total number of subscribers forecast to increase to almost 12 million by 2017 (a 200% increase over 2010 levels).

The business VoIP growth rate increased sharply between 2010 and 2011 from 8% to almost 40%. By 2014, growth had slowed to a still-impressive rate of 20%. The number of subscribers increased from 4,000 in 2010 to 9,000 in 2014. The growth in VoIP adoption is expected to be incremental between 2014 and 2017, slowing to 10% in 2017.

As the number of subscribers grows, VoIP maintenance costs will increase due to the need to maintain more data servers. Increased maintenance costs will translate into higher subscription costs, but any increase is likely to be small: From 2010 to 2013, the number of business subscribers doubled, but costs only increased by about 5%. If history is any indication, the growth to 12,000 subscribers in 2017 should not have a material impact on subscription costs.

Compared to the cost of POTS, VoIP remains a cost-effective choice for Unified Communications (UC). While the average cost of POTS has decreased between 2009 and 2014 and the average cost of VoIP has increased over the same period, the price gap between the two remains large: In 2014, the average cost for a single business telephone line was about $140 per month, while the average cost for a single VoIP seat was less than half of that, at around $66 (including the cost of a broadband connection). According to Telecommunications Industry Association forecasts, VoIP will still be less than half as expensive as POTS in 2017.

It is clear that VoIP is a cost-effective alternative to POTS for business, and will continue to grow in popularity in the near future. More and more companies are realizing that VoIP is a better option for their particular business needs.

For some additional context around the implications of the transition from POTS to VoIP, please download our White Paper: “The Evolution of Voice Communication”. Or, if you think VoIP might be the right choice for your company, please feel free to contact us to discuss the VoIP migration process.

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