VoIP Awareness And Familiarity Make Huge Advances

New York, NY -- Awareness of VoIP (Voice over Internet Protocol) rose dramatically in the past year, with 62% of American Internet users now aware that they can use their Internet connection to make telephone calls, up from 41% only a year ago, according to a recent study conducted by Ipsos-Insight of more than 1,200 Internet users in the U.S.

Most consumers surveyed are aware that they can use their regular phone for VoIP telephony, that they can have multiple lines connected, and that they can use their Internet connection while making phone calls. However, the 33% increase in awareness has not yet translated into wide-spread adoption of VoIP, says the leading global survey-based market research company.

"The industry has made progress in clearing up some areas of consumer confusion, but interest in VoIP hasn't grown," said Lynne Bartos, Senior Vice President and head of Ipsos-Insight's Cable, Media & Entertainment Practice. "Providers haven't convinced potential users of its reliability, the cost savings, and the range of features available."

"Critically, consumers are echoing recent media attention with their concern about the ability to dial 9-1-1 from a VoIP phone, although a recent E911 ruling requires the over 11,000 VoIP providers in the U.S. to address this issue," commented Bartos.

Similar to Ipsos-Insight's 2004 VoIP study, most respondents said they either need more information before switching to VoIP, or are happy with the long-distance service they have.

More Familiarity Increases VoIP Growth Potential

Consumer familiarity with the burgeoning technology grew dramatically over the past year, with 9% of respondents indicating that they were "very familiar" with VoIP and 20% of respondents stating they were "somewhat familiar." Last year, only 4% of respondents were very familiar with VoIP, and 14% were somewhat familiar.

Despite increased familiarity, consumer perceptions of VoIP's cost savings have not made any progress in the past year. "Cost savings is likely the primary reason for most consumers to change to VoIP, so service providers cannot afford to lose ground," said Bartos. "Obviously they have to improve their communication of this key benefit if they expect to grow their market share."

"Consumers can use VoIP to communicate in a variety of ways--via an ATA (analog telephone adaptor) device, using an IP telephone, or direct computer-to-computer via specialized software--and each operates in a slightly different way, with different features, a different cost-of-entry, and a variety of service price points," said Bartos. "These points of differentiation create confusion among consumers about VoIP's value proposition--confusion that service providers must overcome in order to improve VoIP adoption rates."

Methodology

Data were gathered using the Ipsos U.S. Online Panel from May 11-18, 2005, via a nationally representative U.S. sample of 1,004 respondents aged 18 and over. Panelists are chosen through random telephone surveys conducted on an ongoing basis across the United States. With a total sample size of 1,004 one can say with 95% certainty that the results are accurate to within 177 2.94% 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.

For more information on this press release, please contact: Lynne Bartos Senior Vice President Ipsos-Insight, Cable, Media, Entertainment Research [email protected] 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 offers a full suite of research services, guided by industry experts and bolstered by advanced analytics and methodologies in advertising, marketing, public opinion, 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. The Ipsos Group is the second largest survey-based marketing research company in the world.

Visit www.ipsos-na.com to learn more about Ipsos' offerings and capabilities.