IP Telephony's a Consumer Application Worth Hearing Says In-Stat/MDR.

Business Editors/High-Tech Writers

SCOTTSDALE, Ariz.--(BUSINESS WIRE)--June 18, 2003

While IP Telephony certainly has had its faults in the past, and gone through a boom and bust cycle, it still remains a viable consumer service, reports In-Stat/MDR (http://www.instat.com). The high-tech market research firm believes that consumer IP Telephony is currently 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. Over time broadband providers will 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," said Daryl Schoolar, a senior analyst with In-Stat/MDR. "Overall by 2007, the U.S. IP Telephony market is forecast to grow to over 5 million active subscribers. While this shows a five-fold increase in subscribers over 2002, it still lags U.S. Plain Old Telephone Service (POTS) with over 100 million households."

In-Stat/MDR has also found that:

-- Currently the three biggest regions for service revenues and

subscribers are the United States, Asia Pacific, and Middle

East/Africa.

-- The biggest regions for future service revenue growth will be

those with the highest household broadband penetration rates

-- the United States, Asia Pacific and Europe. 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 United States 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, so that consumers no longer

see it as a specific service, but merely an underlying

transport technology. Eventually IP Telephony will be the

POTS.

The report, "IP Telephony - A Consumer Application Worth Hearing" (#IN030738IA), looks at consumer IP Telephony, a currently small, but rapidly growing service. It covers the technology behind IP Telephony and VoIP, along with various call scenarios, service delivery methods, market drivers, challenges, key service providers and a service forecast. To purchase this report, or for more information, please visit http://www.instat.com/abstracts/IN030738IA.asp or contact Rick Vogelei at 480/609-4533; [e-mail]. The report price is $2,995.

About In-Stat/MDR

In-Stat/MDR (http://www.instat.com) offers a broad range of information resources and analytical assets to technology vendors, service providers, technology professionals and market specialists worldwide. The company stands alone in its ability to integrate both supply-side and demand-side research methodologies into a single comprehensive view of technology markets and products. This capability relies on a unique ability to cover the entire value chain from engineering-level technology, through equipment, infrastructure, services and end users.

In-Stat/MDR is part of the Reed Electronics Group, a division of Reed Elsevier (www.reedelsevier.com), a world-leading publisher and information provider. With over 38,000 employees worldwide, Reed Elsevier operates in the science & medical, legal, education and business-to-business industry sectors, providing high value and flexible information solutions to professional end users, with increasing emphasis on the Internet.