U.S. VoIP Ranking by Subscriber: Q3 2004

As ISP-Planet's list of VoIP providers grows, even more companies announce plans to enter the market.

by Alex Goldman ISP-Planet Managing Editor [November 29, 2004]

Rank	ISP	Subs. (thousands)	Date & Source
1	Skype (free VoIP)	12,900	[October 20, 2004] Press Release
2	VoiceGlo	1,820	[October 20, 2004] Press Release
3	CallWave (free and paid VoIP)	823	[November 12, 2004] SEC filing
4	Vonage	300	[undated] Corporate website
5	CableVision (cable VoIP under the Optimum Voice brand name)	189	[November 9, 2004] Press Release
6	Charter (cable VoIP )	40	[November 4, 2004] SEC filing
7	8x8 (also an equipment maker)	28	[November 12, 2004] SEC filing
8	Net2Phone (cable VoIP in relationship with Liberty Media)	7	[October 13, 2004] Press Release
	Note: data was unavailable for many VoIP service providers.

The dark side of this new new industry is the number of key players for whom no public statistics are available. As long as some major players are not reporting subscriber totals, growth, and churn, we will not have a clear picture of VoIP.

We put Skype at the top of the table, but we have noted that the Skype service consists mostly of free users of a computer-to-computer only service. We suspect that Skype will have some success upselling loyal users who like its software and outsider cred in much the way that United Online has built a successful brand name from the ashes of Juno and NetZero. CallWave, which offers both free and premium VoIP services, already has managed to upsell some free users to paid, and completed an IPO on September 29, 2004.

Pricing is a key factor. Broadband reports in its rankings lists several VoIP providers with an average price of $20 or less. Cable companies and other companies that continue to insist on charging close to $50 should, in the long run, lose out to cheaper services unless they can block all other VoIP services on their network (see, for example, VoIP Battleground in RBOC Monopoly War, below).

Please do not take these statistics as any indicator of who will be ahead in the future. They show who's ahead just out of the starting gate. The race is on, and other companies may jump in at a later date. These statistics are a snapshot in time, generally showing the race as of September 30, 2004, although some statistics are from different points in time.

Many companies have announced plans to roll out VoIP service, some by the end of 2004 (which is approaching fast) and some in 2005. Here's what we found:

Covad claims: "We plan to offer VoIP services in all of our markets by the end of 2004." Also see Covad's Matrix-themed VoIP website, VoIP the Movie. Update: Covad spokesman Pavel Radda says, "Covad has over 18,000 individual handsets (VoIP phones) currently in service. We have also already launched in all of the 125 major metropolitan markets nationwide that Covad serves. That equates to around 900 cities nationwide by the end of December."

EarthLink said in its SEC filing: "EarthLink continues to explore new initiatives and has launched voice over Internet Protocol (VoIP), converged voice/data and alternative broadband services, which may generate incremental sources of revenue and income."

Mediacom says, "Beginning in the first half of 2005, we plan to launch in certain of our markets Internet protocol telephony service, which is sometimes referred to as Voice-over-Internet-Protocol, or VoIP telephony. VoIP telephony will allow us to offer an attractive triple-play bundle of video, data and voice products and services. "

Qwest has just launched a VoIP service but we found little information about it.

Even RCN, which is in Chapter 11, is launching VoIP service in a test market.

SBC (see SBC to Launch VoIP in 2005)

Time Warner is rolling out its Digital Phone product, a hybrid of VoIP and TDM.

Cablevision, which has one of the more robust offerings in the market, nevertheless said in its SEC filing: "Our consumer Voice over Internet Protocol voice and data offering, which is in its initial rollout stage, is competitive with incumbent offerings primarily on the basis of pricing, where unlimited continental long distance, regional and local calling, together with certain features for which the incumbent providers charge extra, are offered at one low price."

At ISPCON, VoIP guru Jeff Pulver challenged ISPs to move beyond this problem by providing what he calls "purple" services (see Pulver Says the Future is Purple).