Residential VoIP For ILECs Shows Promise

While still relatively a small proportion among total residential voice lines, IP voice lines are on the rise. They may represent the brightest spot among the normally depressing decline of total access lines among ILECs. Early indications suggest IP voice lines offered by ILECs as a primary access line help slowdown total access line decline. In fact among residential access lines, IP voice lines are actually growing.

Consider AT&T and SureWest. Both ILECs have introduced an IP voice product in the last year or so. AT&T calls their IP voice service U-verse Voice, while SureWest labels theirs Digital Phone. When looking at both companies past few quarterly metrics, you see a noticeable rise in IP voice subscriptions. For 3Q09, AT&T had 735K U-verse voice subscriptions, representing 2.62% of their total residential access lines, up from 1.96% (570K) in 2Q09, an increase of 33%. For SureWest, their 14,700 Digital Voice subscriptions represent 13.1% of their total residential access lines, up from 10.9% (12,400) in 2Q09, an increase of 20%.

SureWest reports that among the 17,200 access lines they’ve lost over the past year, 7,800 (45%) migrated to their Digital Voice product. That’s a fairly significant migration – approximately 7,800 customers, which if not for their IP voice product, may have disconnected residential voice service with SureWest.

I fully admit that you can’t draw industry wide conclusions from AT&T and SureWest IP voice results alone. Many other factors and variables come into play for different carriers that can impact their respective results. There are also regulatory and policy issues that affect some ILECs ability to offer IP voice as a primary access line. But this trend is worth tracking. IP voice may not be the answer to everything, but these results demonstrate IP voice can have a positive impact.