U.S. Consumers Switching To VoIP: Who Are They And What Do They Want?

New York, NY--Nearly one out of five (19%) Internet users in the U.S. say they will likely upgrade their traditional phone service by subscribing to VoIP (Voice over Internet Protocol), the latest technology in Internet-based telephone service, according to findings from a recent study conducted by Ipsos-Insight among more than 1,200 Internet users in the U.S. Current DSL and dial-up customers and people who spend over $40 a month on phone bills are most likely to sign up for VoIP service. "The cost savings proposition of VoIP will play a major role in drawing new subscribers into trying out Internet-based phone service," said Lynne Bartos, Senior Vice President and head of Ipsos-Insight's Cable, Media & Entertainment practice. "This applies primarily to those with high phone bills. People who spend over $40 a month on their calls are more than twice as likely try to VoIP." In a twist, the data show that cable Internet users are more reluctant than DSL and dial-up users to try VoIP. "In order to use VoIP services, subscribers need to have a broadband Internet connection. So it is not surprising that DSL Internet users who already having this high-speed connection--meaning one less technology barrier--would be more inclined to try VoIP. What is surprising is that dial-up Internet users are more likely than cable Internet users to try VoIP, despite cable users' broadband hook-up," said Bartos. Must-Have VoIP Features The study found that among consumers likely to subscribe to VoIP, the most desired add-on feature is caller ID, followed by voicemail, then battery back-up, and call waiting. "VoIP providers entering the market need to offer these must-have features to gain entry, but need to look beyond these basic offerings to differentiate themselves from the competition," Bartos said. It's Home-Court Advantage For Telcos Offering VoIP Among Internet users in the U.S., half (50%) said they feel that a telephone company would be the best provider for VoIP. ISPs came in second with a vote of confidence from 35%, and cable companies came in last with only marginal favour (15%). "Right now, it looks like telephone companies would have the advantage when it comes the ability to capture VoIP market share," said Bartos. "Until consumers become more savvy about VoIP technology and services, most will naturally turn to familiar providers of telephone service, even if the service is Internet-based." According to the findings, cable companies appear to be in the weakest competitive position to convert customers to VoIP. "Cable companies may be facing an uphill battle in the emerging VoIP marketplace," Bartos said. "But cable operators can definitely rise to the occasion. They have already proven they can transcend their traditional video services by offering a reliable, compelling high speed Internet access product. With solid marketing and substantial bundled offers, cable operators should be able to overcome VoIP barriers and gain market share pretty quickly," concluded Bartos. Download larger versions of charts here. Methodology Data were gathered using the Ipsos U.S. Online Panel from May 6--12, 2004, via a nationally representative U.S. sample of 1,247 respondents aged 12 and over. Panelists are chosen through random telephone surveys conducted on an ongoing basis across the United States. With a total sample size of 1,247 one can say with 95% certainty that the results are accurate to within 177 3.1% percentage points of what they would have been had the entire population of the U.S.'s regular online users been surveyed. The margin of error will be larger for sub-groupings of the survey population. View Ipsos-Insight's other recent findings on consumer awareness of VoIP here. For more information on this release, please contact: Lynne Bartos Cable, Media & Entertainment Research Ipsos-Insight 312.665.0556 About Ipsos-Insight Ipsos-Insight, the flagship marketing research division of Ipsos in the U.S., has industry specialists serving companies in the following categories: consumer products; technology and communications; health and pharmaceutical; financial services; cable, media and entertainment; agrifood; energy and utilities; and lottery and gaming. Ipsos-Insight provides custom and tracking research services to domestic clients, as well as U.S.-based multinationals. It offers concept and product testing, package testing, attitude and usage studies, omnibuses, tracking systems, brand equity, price optimization and segmentation, marketing models, advanced analytics, and global research. Ipsos-Insight is an Ipsos company, a leading global survey-based market research group. To learn more, visit: www.ipsos-insight.com. About Ipsos Ipsos is a leading global survey-based market research group, with revenues of $644 million in 2003. It offers a full suite of research services, guided by industry experts and bolstered by advanced analytics and methodologies in advertising, marketing, public opinion and customer loyalty research, as well as forecasting and modeling. Member companies also offer a full line of custom, syndicated, omnibus, panel, and online research products and services. To learn more, visit: www.ipsos.com. Ipsos is listed on the Euronext Paris Premier Marchй, and is part of the SBF 120 and Next Prime Indices as well as eligible to the Deferred Settlement System (SRD). Euroclear code 7329, Reuters ISOS.LN, Bloomberg IPS FP