By Sharla Sikes

Voice over IP service has been steadily gaining momentum since it first became popularly accepted. Particularly attractive to small and medium businesses, most VoIP customers choose the service for its price.

It’s gaining so much market share, in fact, that traditional phone services have begin to really feel the pain.

“VoIP service providers’ growth has largely come at the expense of the old phone companies,” noted Patrick Christian, analyst, TeleGeography.

A TeleGeography’s U.S. VoIP Research Service study of the VoIP market in the United States found that VoIP’s popularity has affected the number of users of the Regional Bell Operating Companies. More than 16 million VoIP lines are in use in almost 14 percent of all U.S. households, or 27 percent of homes with broadband.

The study showed that three major telecommunications providers—AT&T, Verizon and Qwest—are losing customers to the tune of 17.3 million lines since 2005, while 14.3 million customers signed up for new VoIP service.

More than 80 percent of new VoIP subscribers choose a cable provider rather than an independent VoIP provider, however. The days of multitudes of small VoIP companies may be fading. “Triple-play” bundles including broadband Internet service, cable TV and VoIP are often a simple and cost-effective choice for consumers. Sometimes the easy choice wins out over the best quality or even lowest price, and package deals offer just that.

RBOCs are fighting the trend by joining it, offering communications bundles and VoIP service of their own. Verizon signed on 1.8 million FiOS Internet and 1.2 million FiOS TV subscribers during the first quarter of 2008, according to TMC. AT&T plans to upgrade its U-verse phone, TV and Internet package soon.

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