VoIP Ranking by Subscriber: Q1 2005

A CLEC serving a sparsely populated area enters the VoIP rankings as it moves customers from analog ILEC lines to its own digital facilties.

by Alex Goldman ISP-Planet Managing Editor [June 13, 2005]

Rank	ISP	Subs. (thousands)	Date & Source
1	VoiceGlo	2,750	[December 4, 2004] Press Release
2	Skype (paid VoIP only, customers worldwide)	1,000	[March 11, 2005] Press Release
3	CallWave (free and paid VoIP)	856	[April 27, 2005] Press Release
4	Vonage	500	[March 7 , 2005] Press Release
5	CableVision (cable VoIP under the Optimum Voice brand name)	364	[May 4, 2005] Press Release
6	Charter (cable VoIP )	55	[May 3, 2005] Press Release
7	GCI (Alaksa only)	10	[May 4 , 2005] Press Release [.pdf]
	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.

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 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 last year, 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).

CLECs such as GCI see VoIP as a way to reduce reliance on the ILEC. In its latest press release, GCI comments, "Churn for customers receiving service through [VoIP] is materially lower than for customers served using facilities leased from [the ILEC]." The company expects to have 25,000 digital phone customers by the end of this year, about 20 percent of its total number of homes served.

Not posted to the rankings: At the end of Q1, 2005, Covad claimed 690 business VoIP customers.