In Europe, They Like Their VoIP

In Europe, They Like Their VoIP

Voice over Internet Protocol is a fast-growing business in the United States, but it’s growing even faster in Europe, and its traction in the old world is only going to increase. With competitive broadband service providers (such as France’s Free and Talk Talk in the UK) offering flat-rate voice plans over their high-speed pipes and wireless carriers embracing triple-play offerings, Europe is poised to emerge as one of the regions where VoIP has a major impact.

According to market research firm Telegeography, consumer VoIP subscribers in Europe will reach 40 percent market penetration by 2011. That’s compared with the U.S., where total VoIP market penetration is forecast to top just 20 percent by the same year.

One of the main reasons for this is divergence: U.S. telecom incumbents AT&T and Verizon have more or less stayed out of the VoIP game, leaving the big push to come from cable operators such as Comcast and Time Warner Cable. In the meantime, the independent voice service providers Vonage and SunRocket have fallen on hard times. Taken together, there were just 11.8 million VoIP subscribers in the U.S. at the end of the second quarter.

Conversely, the European incumbents — Britain’s BT Group (BT), France Telecom (FTE) and Deutsche Telekom (DT) of Germany — have responded to pressure from upstarts like Free, who have easier access to local loops, by becoming more active in their respective markets. And of course there’s Skype, which is extremely popular in Europe.

VoIP in Europe is also getting a boost from tiny tots such as Truphone, Fring, Jajah, Rebtel, Cellity — an ever-growing army of startups that is looking to lower the costs of making calls over wireless networks across Europe. The popularity of Wi-Fi enabled mobile phones is only going to accelerate the growth of VoIP on the old continent that much more.