Fighting Goliath: Can Alternative VoIP Providers Survive?
Local VoIP providers can be broadly grouped into three categories: cable MSOs, major players (IXCs and RBOCs) and alternative VoIP providers. Alternative VoIP providers include the nontraditional players that are entering the telephony market with a bring-your-own-broadband strategy. These players are generally small upstarts. In the coming year, they will be facing the communications market leaders (AT&T, Verizon, Comcast and Time Warner). Can they survive? In this report, the Yankee Group will examine the competitive market to determine whether or not there is a viable long-term role for alternative VoIP providers as the local VoIP market matures.
Alternative VoIP providers such as Vonage and many of the Vonage-like providers have a first-to-market advantage. In 2003, a number of these companies, dominated by Vonage, introduced VoIP phone service to consumers. At the end of 2003, these small startups comprised nearly 66% of the local residential VoIP market. Vonage dominated the market with than 90% of all the subscribers in the alternative VoIP provider segment or 61% of the local residential VoIP market.
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