While this is extremely strong growth, JupiterResearch believes that VoIP service providers face two key challenges. The traditional carriers have a strong, well-established customer base and wireless telephony has been adopted by the younger generation. Current consumer telephony preferences will create challenges for VoIP start-ups establishing themselves in the market.
“Just like we saw with DSL five years ago, VoIP start-ups will be extremely important in jump-starting the market, and will motivate established carriers to develop their own VoIP services. However, it is unlikely that start-up VoIP providers will become a significant threat to the incumbent phone companies.”
The traditional carriers have unmatched brand strength and marketing clout due to their existing customer base. Broadband consumers evaluating landline telephony rank quality and reliability over price and features; and bundled services are growing steadily as purchase motivators. Moreover, demand for landline VoIP service is not very price elastic: while about one-third of online consumers rated themselves somewhat or very likely to turn to VoIP at $39.99/month, demand increased only 10% in response to a 38% decrease in price. According to JupiterResearch senior analyst Joe Laszlo: "Just like we saw with DSL five years ago, VoIP start-ups will be extremely important in jump-starting the market, and will motivate established carriers to develop their own VoIP services. However, it is unlikely that start-up VoIP providers will become a significant threat to the incumbent phone companies."
The JupiterResearch report includes an analysis of consumer market segments based on their likely interest in the VoIP value proposition. Younger consumers pose a particular challenge for VoIP service providers. While 18 to 24 year olds were least likely to turn to traditional carriers for service, they were also least likely to use landline telephony at all. Indeed, 12% of 18 to 24 year olds already say their wireless phone is their only phone. "For attracting young adults, VoIP's biggest competitor may prove to be mobile operators, not the Bell companies," continued Laszlo. JupiterResearch recommends that VoIP providers design service plans for consumers seeking only a low-use back up to their mobile service.
The complete findings of this report are immediately available to JupiterResearch clients online. For more information on the report or JupiterResearch's Broadband research service please contact Kieran Kelly, Vice President of Global Sales and Client Service at 1-800-481-1212 or researchsales@jupitermedia.com.
About Jupitermedia Corporation
Jupitermedia Corporation (Nasdaq:JUPM) (www.jupitermedia.com), headquartered in Darien, CT, is a leading global provider of original information, images, research and events for information technology, business and creative professionals. JupiterWeb, the online division of Jupitermedia, operates four distinct online networks: internet.com and EarthWeb.com for IT and business professionals; DevX.com for developers; and ClickZ.com for interactive marketers. JupiterWeb properties include more than 150 Web sites and over 150 e-mail newsletters that are viewed by approximately 20 million users and generate approximately 300 million page views monthly. Jupitermedia also includes: JupiterImages, one of the leading images companies in the world with over 3.5 million images online serving creative professionals with products like Comstock Images, Thinkstock Images, Photos.com and ClipArt.com; JupiterResearch, a leading international research advisory organization specializing in business and technology market research in 18 business areas and 14 vertical markets; and JupiterEvents, which produces offline conferences and trade shows focused on IT and business-specific topics, including Search Engine Strategies and Wi-Fi Planet.
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release which are not historical facts are "forward-looking statements" that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The potential risks and uncertainties address a variety of subjects including, for example, the competitive environment in which Jupitermedia competes; the unpredictability of Jupitermedia's future revenues, expenses, cash flows and stock price; Jupitermedia's ability to integrate acquired businesses, products and personnel into its existing businesses; Jupitermedia's dependence on a limited number of advertisers; and Jupitermedia's ability to protect its intellectual property. For a more detailed discussion of such risks and uncertainties, refer to Jupitermedia's reports filed with the Securities and Exchange Commission pursuant to the Securities Act of 1933 and the Securities Exchange Act of 1934. The forward-looking statements included herein are made as of the date of this press release, and Jupitermedia assumes no obligation to update the forward-looking statements after the date hereof.
All current JupiterResearch press releases can be found online at http://www.jupiterresearch.com/bin/item.pl/press:releases/
All current Jupitermedia Corporation press releases can be found on the World Wide Web at http://www.jupitermedia.com/corporate/press.html.
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