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IP Telephony has matured from having the "sound quality equal to two cans tied together with string" to become a serious consumer service, market analysis organisation In-Stat/MDR has claimed.

Consumer IP Telephony is at the beginning of a transition phase with the growth of broadband enabling IP Telephony providers to merge lower rates with greater quality and features, the company said this week.

In-Stat/MDR reckons that broadband providers will soon see IP Telephony as an application that will help grow overall broadband usage, as it increases the overall value of the broadband service for the consumer.

"When people think of consumer IP Telephony, they often think of sound quality equal to two cans tied together with string, or as a dot com fad. IP Telephony, however, is far from either one of those things," says Daryl Schoolar, a senior analyst with In-Stat/MDR. "By 2007, the US IP Telephony market is forecast to grow to over five million active subscribers."

"While this shows a five-fold increase in subscribers over 2002, it still lags US Plain Old Telephone Service (POTS) with over 100 million households," Schoolar notes.

In-Stat/MDR forecasts that the biggest regions for future IP Telephony service revenue growth will be those with the highest household broadband penetration rates - the US, Asia Pacific and Europe. Currently the three biggest regions for service revenues and subscribers are the US, Asia Pacific and Middle East/Africa.

Household broadband penetration will lead to greater Device-to-Phone services, which tend to generate higher monthly recurring service fees than either PC-to-Phone or Phone-to-Phone. During 2006 and 2007 the US will see greater interest on the part of traditional phone providers in offering IP Telephony services.

As Device-to-Phone service grows, In-Stat/MDR expects to see the emergence of more services that satisfy the requirements for primary line service, especially from the cable operators. Eventually IP Telephony will grow to such an extent that consumers no longer see it as a specific service but merely an underlying transport technology.

In-Stat/MDR 's report, IP Telephony - A Consumer Application Worth Hearing, is priced at $2995, can be purchased from In-Stat/MDR's site here. ®

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