Voice Over Internet Protocol, or VoIP, is an internet-based telecommunications method that first hit the mass market starting around 2004. VoIP uses existing broadband internet access and allows users to make and receive calls over the internet in much the same way as they would with their phone. In 2012, VoIP business phone systems have become mainstream, and every day you may be participating in VoIP calls without even realizing it.

Phone Facts and Statistics

On average, a person makes or answers eight phone calls a day, so with 300 million cell phones in use in the United States, around 2.4 billion calls take place every day. An increasing number of those calls are VoIP calls, whether the phone user specifically sets out to make a VoIP call or whether his or her telecommunications company uses VoIP technology to route regular phone calls. Of the eight calls you make and receive each day, it’s a good bet that at least two of them are VoIP calls, due to increasing use of VoIP technology by traditional telecommunications providers. And with each passing year, the chance that you’re using VoIP in your everyday calls increases.

The Growth of VoIP

To say that growth in VoIP usage has been rapid is an understatement. A 2011 study by the Pew Internet and American Life Project found that about one-quarter of adult internet users in the United States have placed phone calls online using VoIP services like Skype. A 2010 market study by IBISWorld found VoIP to be the fastest-growth industry of the decade from 2000 to 2009, with growth during that period of an astounding 179,036%! That growth rate is more than 100 times greater than the next fastest growing industry during that time: search engines.

Adoption of VoIP Services like Skype

The Pew Internet study found that the number of Americans placing internet phone calls using VoIP services tripled from 2007 to 2011. Men and women are equally represented among those using VoIP, and the 18 to 29-year-old age group makes up the most enthusiastic VoIP users. Somewhat surprisingly, higher-income individuals were more likely to make VoIP calls than lower-income individuals, even though many VoIP calls are free. The study also found that the more education a person has completed, the more likely they are to use VoIP. Furthermore, urban residents use VoIP more than rural residents.

Telecommunication Companies’ Use of VoIP

Big telecommunications companies like Charter increasingly use VoIP over their dedicated and public IP networks for connecting switching centers and interconnecting with other telecommunications providers. They use VoIP for the same reasons individuals do: because it is very inexpensive. That means that even if you have never made a Skype call, chances are, you have used VoIP without knowing it, through your telecommunications provider.

Is There Any Stopping VoIP?

The IBISWorld study concluded that VoIP will likely continue to be the biggest growth industry up through 2019, though with a more “humble” growth of around 150%. VoIP has seen tremendous momentum, and there is still a lot of development potential ahead. A number of other industries will be able to tie their growth to VoIP, including eCommerce, wireless telecommunications, and even online dating. For these reasons, the upward push in VoIP adoption is expected to continue for the foreseeable future. Factors that will continue to contribute to the explosion in VoIP use include:

• The drastically lower costs of VoIP communications compared to traditional phone calls
• VoIP’s easy integration into other technologies, like WiFi and 3G
• VoIP’s increasing inclusion of features that users count on, like conferencing, forwarding, and very flexible call routing.

While some mobile telecommunications companies are looking for ways to block use of VoIP services like Skype (see this recent story from Sweden), many more are integrating VoIP into their services in order to expand their reach and cut their costs.

What this means for the average caller is that as time marches forward, you are increasingly likely to be using VoIP more frequently in your everyday life, even if you never use services like Skype.

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