TIA

For Immediate Release
February 27 , 2006

Arlington, Va. -- The number of residential VoIP customers (not including PC-to-PC services) more than tripled to 4.2 million in 2005 and is expected to grow by a compound annual rate of 43.9 percent through 2009, reaching 18.0 million. This was on the heels of an eightfold increase from 150,000 at the end of 2003 to 1.2 million at the end of 2004, according to the Telecommunications Industry Association's (TIA's) newly released TIA's 2006 Telecommunications Market Review and Forecast.

The residential VoIP market is driven by a number of factors, including the lure of inexpensive voice communications. VoIP thus far has been less affected by a variety of regulations and taxes than traditional telephony, helping to keep prices low. Increasing broadband subscribership is also driving the market, because VoIP works best over a broadband connection, and utilization of this existing connection also lowers the cost of providing the service. The U.S. broadband market has grown explosively from 4.5 million subscribers in 2000 to 41.3 million subscribers in 2005 and is expected to grow an additional 28 million to 69.2 million by 2009, a 13.8 compound annual increase. Another factor is the range of features included with VoIP that are either unavailable or available only for an extra charge with traditional phone service, such as sending subscribers emails when they receive voicemail and integrating personal applications such as address books.

VoIP revenue has had a growth pattern similar to residential VoIP subscribers. VoIP revenue increased from $25 million in 2003 to $200 million in 2004 and $1.1 billion in 2005. Revenue is projected to increase 46.7 percent on a compound annual rate through 2009 reaching $5.1 billion. VoIP carriers are now moving beyond the residential market to address the small-business market and are beginning to introduce services geared to small businesses, which bundle a number of lines and minutes for a flat price or which bundle VoIP with broadband services.

TIA's 2006 Telecommunications Market Review and Forecast provides an overview of telecom's interrelated market segments including landline network, enterprise and consumer, wireless communications, and international markets. It's available in hard copy or on CD-ROM. To order, please visit http://www.tiaonline.org/business/research/mrf/ or call +1 (703) 907-7074. To obtain a press copy of the report, please contact Jennifer Mead at +1 (703) 907-7723 or email jmead@tiaonline.org.

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TIA is the leading trade association for the information and communications technology (ICT) industry. As owner and producer of GLOBALCOM M, TIA represents global ICT suppliers and their service provider and enterprise customers through its leadership in standards development, domestic and international policy advocacy, and facilitating member business opportunities. TIA represents the communications sector of the Electronic Industries Alliance (EIA). Visit us at http://www.tiaonline. org.

P.A. Release 06-19/02.27.06