4Q07 Consumer VoIP Rankings

Now that Charter has reported the 4th quarter earnings, the consumer VoIP rankings can be published. I've put together a chart of six of the larger consumer VoIP companies and ranked them by quarterly VoIP revenue.  In order to be shown in the rankings, you have to be a public company and you have to provide segmented revenue numbers for your voice services.

	4Q07 Revenue (MM)	Approx. Revenue Share
Comcast	$     523	36%
Time Warner Cable	$     336	23%
Vonage	$     216	15%
CableVision	$     147	10%
Skype	$     115	8%
Charter	$     107	7%
TOTAL	$  1,444

No surprise here, Comcast leads the pack, and four of the top six are cable companies.  The only two on the list that don't own their own network are Vonage and Skype.  Of course, the list is incomplete, since there are many more companies offering consumer VoIP services, several of whom aren't public or don't report segment stats for their consumer VoIP businesses. 

Here is a slightly different take, showing subscribers per company:

	Total Subscribers EOY 2007	4Q07 Subscriber Growth	4Q06 Subscriber Growth	Approx. Subscriber Share
Comcast	4,377,000	604,000	509,000	32%
Time Warner Cable	2,900,000	285,000	211,000	22%
Vonage	2,580,227	56,000	166,267	19%
CableVision	1,592,000	102,000	109,000	12%
Skype*	1,073,763	118,918	137,288	8%
Charter	959,300	155,300	106,200	7%
TOTAL	13,482,290	1,321,218	1,238,755

*NOTE: Skype does not report subscriber numbers in the same was as the rest of the companies, and in stead reported their number of "registered users" as 276.3M, and acknowledged that users can register more than once under different user names.  I myself have three Skype accounts, two of which fell into disuse when I changed email accounts and then forgot the password and couldn't recover it.  So Skype also counts a lot of inactive accounts in their total.  To normalize Skype's results, with the subscriber counts reported by other companies, I gave Skype credit for a subscriber for each $35.70 in monthly revenue achieved.

The interesting part of the table above is that both of the "over-the-top" VoIP players, Vonage and Skype, have seen a slowdown in subscriber growth, while all of the cable VoIP players except for CableVision are seeing an acceleration in subscriber growth.  (CableVision made a lot of early progress with their voice service and has greater market penetration than the other cable companies, so I would assume that their growth rate is not accelerating due to a more saturated market).

In terms of revenue per subscriber, Comcast again leads the pack:

	4Q07 Average Monthly Revenue Per Subscriber
Comcast	$       39.83
Time Warner Cable	$       38.62
Charter	$       37.18
CableVision	$       30.78
Vonage	$       27.90
OVERALL AVERAGE	$       35.70

Skype is excluded from the average revenue per subscriber, because Skype doesn't have subscribers in the same sense as the other companies, so an apples-to-apples comparison can't be made.

Overall, 2007 was a year in which the "over-the-top" service providers lost ground to the facilities-based service providers, and 2008 is shaping up the same way.

If there is a company missing from these rankings that you would like to see added next quarter, and the company is public and reports their consumer VoIP stats, then let me know by way of commenting on this post, and I'll add them in next time around.

Comments

[Jahangir Raina]

Skype seems like a misfit in the comparison here. Skype has a worldwide subscriber base while as the others that you list here have US-only customers.

[Richard Shockey]

The reason for CableVision's lower VoIP uptake is that they are in fierce competition with FIOS on Long Island.

[Hudson Barton]

I mean no offense, but your understanding of Skype's metrics needs a helping hand. Two independent analysts place the # of current subscribers (on an apples-to-apples basis) at around 30 million. See http://www.glimfeather.com/borderless/. Also http://www.skypenumerology.blogspot.com/.

You make two errors, neither of which are uncommon:
1. The cost of maintaining a Skype account that is capable of unlimited domestic incoming and outgoing PSTN calls is $6 per month, not $35.70 per month. Your own formula for # of subscribers is therefore understated by a factor of nearly 6x. But even that doesn't begin to approach the truth because it doesn't count Skype-to-Skype minutes which are free. Again, the number of real Skype users is just over 30 million, and NOT just over 1 million.
2. Skype has not slowed down at all. Indeed, since last October it has been experiencing its most rapid growth ever. In the first two months of 2008, Skype has added nearly 4 million real users (not Skype names). That is almost as much as you are counting for the biggest of the other VOIP carriers (Comcast) in total.