IDC Forecasts IP Telephony Market Will Soar to 2.7 Billion Minutes of Use and $480 Million in Revenues by Yearend 1999

FRAMINGHAM, Mass., September 1, 1999 — The worldwide Internet protocol (IP) telephony will explode from 310 million minutes of use in 1998 to 2.7 billion by yearend 1999. By 2004, IP telephony minutes will reach 135 billion. Revenues for this service will skyrocket from $480 million in 1999 to $19 billion by 2004. This data comes from International Data Corporation's (IDC's) new report IP Telephony Services: Market Review and Forecast, 1998-2004.

IP telephony is the real-time transmission of voice signals using Internet protocol over the public Internet or private data network. It provides less expensive long distance and international communications because data networks do not charge for the distance a call travels and because they are not regulated.

"The consumer market, where price shoppers predominate, has been driving growth of the Internet protocol telephony market because of the cheap phone call services," said Mark Winther, group vice president for IDC's Worldwide Telecommunications research. "Specifically, expatriate communities and international travelers are using IP telephony services to originate and terminate calls in the United States, Asia/Pacific, Latin America, Europe, and the Middle East."

The business market has been slow to adopt IP telephony because of quality and usability issues. "Business users are unlikely to use IP telephony when it requires callers to dial 24 or more digits. User access has to be transparent and quality of service has to improve," Winther said. "However, vendors are addressing these concerns. Larger IP telephony service providers are enhancing call quality and integrating their services with corporate virtual private networks."

As a result, IDC expects widespread use of IP telephony in the business market by 2001. By 2004, IDC forecasts the size of the business market will surpass the consumer market.

IDC's report, IP Telephony Services: Market Review and Forecast, 1998-2004 (IDC #B19813), analyzes the IP telephony market opportunity for network service providers. It includes forecasts for billable minutes of use and revenues, split by the retail and wholesale markets and business and consumer segments. Market shares of the leading service providers are presented as are profiles. To see the report's table of contents, visit http://www.idc.com and search for 19813. To purchase a copy of the report, contact Janis Dempsey at 508-935-4145 or jdempsey@idc.com.

About IDC

International Data Corporation delivers accurate, relevant, and high-impact data and insight on information technology to help organizations make sound business and technology decisions. IDC forecasts worldwide IT markets and adoption and technology trends, and analyzes IT products and vendors, using a combination of rigorous primary research and in-depth competitive analysis. IDC is committed to providing global research with local content through more than 500 analysts in more than 40 countries worldwide. IDC's customers comprise the world's leading IT suppliers, IT organizations, and the financial community. Additional information on IDC can be found on its Web site at http://www.idc.com.

IDC is a division of International Data Group, the world's leading IT media, research, and exposition company.

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