VoIP Ranking by Subscriber: Q4 2004

Rapid growth continues, though companies are competing mostly on price, having developed far too few purple applications.

by Alex Goldman ISP-Planet Managing Editor [March 15, 2005]

Rank	ISP	Subs. (thousands)	Date & Source
1	Skype (free VoIP with some paid VoIP)	12,900	[October 20, 2004] Press Release
2	VoiceGlo	2,750	[December 4, 2004] Press Release
3	CallWave (free and paid VoIP)	862	[January 31, 2005] Press Release
4	Vonage	390	[January 5, 2005] Press Release
5	CableVision (cable VoIP under the Optimum Voice brand name)	273	[February 23, 2005] Press Release
6	Charter (cable VoIP )	45	[March 1, 2005] Press Release
7	8x8 (also an equipment maker)	40	[February 14, 2005] SEC filing
8	Net2Phone (cable VoIP in relationship with Liberty Media)	14	[March 9, 2005] 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. If we were counting paying users, we would have Skype at 1 million. Jupiter Research broadband analyst Joe Lazlo says on his blog in insightful comments on the VoIP industry that paying customers is the number we should all be paying attention to.

Although Skype did not post Q4 2004 subscriber numbers, it has already posted Q1 2005 numbers (as has Vonage). Any fully digital twenty first century business will be able to provide real time data. Wall Street is (in general) not yet equipped to handle real time data (other than price quotes), expect it, or produce it.

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.

The price problem remains
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).

Many companies are entering the VoIP business. AOL just announced its entry, and SunRocket, founded a year ago, is doing well in the Broadband Reports rankings.

Cablevision, which has one of the more robust offerings in the market, nevertheless said in its Q3 2004 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).