Since June 2006, BT Retail now offers its Broadband Talk VoIP package bundled with its Total Broadband packages, and also sells the service standalone to those who use other ISPs, including NTL cable. Indeed, the original target of the service way back at launch in 2003 was cable broadband customers - it was first launched as a spoiler.
BT also offers BT Softphone, a PC-based softclient VoIP service, originally part of its former relationship with Yahoo! but now a fully independent service. We don’t know the precise customer numbers of the two products, but we estimate a 50:50 split.
Yesterday’s announcement needs a little dissecting. In the VoIP market the devil is very much in the detail. VoIP is now increasingly bundled by operators and it is hard to analyse precisely how many customers are really using the service in earnest and how many have merely used it a few times - or possibly even never. BT’s statement is worded rather loosely - it implies that BT has a million VoIP users, whereas in reality anyone who takes a BT Retail Total Broadband package is automatically registered for VoIP even if they don’t use the service. With VoIP being a marginal cost business, it makes sense for operators to do this, as it makes a very good impression in what is starting to be a competitive VoIP market. Automatic activation of VoIP also avoids future customer contact which merely creates unnecessary cost. It also pre-deploys the necessary hardware on customers’ premises which will help to defend against churn. With these customer numbers, we think BT has a small overall market lead but as more players enter the market it will be increasingly difficult to sustain.
Irrespective of exactly how many active VoIP customers BT has, the growth in the UK market is powering on, but lags in terms of percentage uptake behind other European countries such as France, the Netherlands and Norway. We forecast continued UK growth for the next five years, which takes us into next-generation voice and, specifically, BT’s 21st Century network. The composition of the voice market then will be quite different to what we see today; BT’s goal is to continue to
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