Global VoIP services market is estimated to witness high growth, owing to increasing smartphone penetration & significant cost savings
VoIP services market is estimated to be valued at US$ 158.72 Bn in 2024, exhibiting a CAGR of 12.5% over the forecast period (2024-2031). The market growth is primarily driven by increasing adoption of smartphones across the globe and growing popularity of over-the-top (OTT) applications. VoIP offers significant cost savings on long distance and international calls as compared to traditional phone lines.
Market Dynamics:
Global VoIP services market growth is driven by growing smartphone penetration and significant cost savings offered by VoIP technology. Rising adoption of smartphones facilitated the integration of advanced communication technologies and OTT applications. As mobile devices are becoming an integral part of people's lives, there has been huge demand for VoIP services. Moreover, VoIP offers up to 90% lower international call rates as compared to traditional phone lines. It allows making high quality voice and video calls over the internet at marginal costs. The cost effectiveness of VoIP compels businesses and households to switch from PSTN (Publicly Switched Telephone Network) to VoIP networks.
Growing Smartphone Penetration
With rising smartphone penetration globally, more and more users are adopting over-the-top (OTT) communication apps to make calls and send messages. Popular apps like WhatsApp, Facebook Messenger and Skype allow users to call and message friends and family for free over Wi-Fi or cellular data connections. By leveraging these ubiquitous internet-connected devices, VoIP service providers are able to offer low-cost or free calling services to a massive consumer base. As smartphones become the primary computing and communication devices for most people, there has been increase in installation base for VoIP apps, thus, boosting demand for VoIP calling and messaging services.
Cost Savings Compared to Traditional Phone Services
Traditional telephone services involving monthly line rental and call charges are more expensive as compared to OTT communication solutions. VoIP calling allows users to eliminate monthly line rental fees and significantly lower per minute call charges. For consumers and businesses looking to reduce communication costs, migrating to VoIP solutions that route calls over the internet provides substantial savings.
Interoperability Issues Between Proprietary VoIP Networks
The lack of interoperability among major OTT communication platforms like WhatsApp, Skype, and Facebook Messenger poses a significant challenge for market growth. These siloed networks prevent users from calling or messaging contacts across different services, forcing them to maintain multiple apps to communicate with their entire network.
This friction created by the lack of interoperability restricts the growth potential of individual VoIP providers, as a larger unified network would be able to serve more users. Until proprietary protocols are replaced by open standards, interoperability issues will limit the scaling capabilities of these platforms.
To address this challenge, VoIP providers need to prioritize interoperability in their platform development. This includes ensuring seamless integration with existing systems, enabling easy third-party integrations through open APIs, and maintaining compatibility with a wide range of devices and operating systems. By embracing interoperability, VoIP platforms can deliver a more user-friendly experience, reduce friction, and unlock their full growth potential in the market.
Dependence on Internet Connectivity
Reliance on an internet connection, whether Wi-Fi or cellular data, makes VoIP users vulnerable to disconnections especially in areas with poor coverage or during natural disasters. Unplanned outages can disrupt voice and messaging services, undermining the perception of VoIP as a fully reliable communication platform. While networks are becoming more robust, dependence on the internet remains a key limitation as compared to cellular networks which offer better uptime guarantees.
Leveraging AI and Analytics
VoIP calling and messaging generates massive amounts of communication metadata that can be analyzed to glean useful insights. By applying AI and machine learning techniques, VoIP providers can gain a deeper understanding of user behavior, preferences, relationships and interests. This intelligence allows for hyper-targeted advertising and assistance. Monetizing usage analytics through ad networks or paid services can offer opportunities for VoIP market players.
Emerging Markets with Rising Disposable Incomes
Major emerging markets like India, Brazil, Indonesia, and others are characterized by swelling middle-income populations with growing disposable earnings and smartphone penetration rates. These demographics have strong propensity to adopt affordable VoIP services for communication needs. Service providers who can offer localized pricing, content and apps tailored for these regions stand to gain many new subscribers. Aggressive marketing campaigns promoting cost savings can attract price-sensitive users in developing nations.
Link: https://www.coherentmarketinsights.com/market-insight/voip-services-market-641
Key Developments:
- In April 2022, Nextiva, a leading cloud communications company, launched its new NextivaONE partner program. The program is designed to support increasing opportunities for channel partners and customers, enabling them to succeed using their preferred growth models. Nextiva has aligned its resources to bolster partner success.
- In July 2021, Dialpad, an industry leader in AI-powered communication and collaboration, introduced Dialpad Meetings. This new offering represents a truly unified approach to communications as a service. By integrating its suite of products, including business communications and customer engagement solutions, onto a single, cohesive platform powered by AI and cloud technology, Dialpad aims to deliver a seamless, all-in-one Unified Communications as a Service (TrueCaaS) experience for its customers.
- In May 2020, VoIPStudio, a leading provider of cloud-based business communication solutions, announced the expansion of its service offerings to include an emergency calling feature. This new capability allows VoIPStudio customers to connect directly with public safety organizations, enhancing the platform's regulatory compliance and providing businesses with a comprehensive, enterprise-grade communication solution.
- In September 2020, Dialpad, a leading cloud-native business communications platform, announced the acquisition of video conferencing company Highfive. This strategic move aimed to unify Dialpad's suite of products, including voice, SMS, and video conferencing, onto a single, cohesive platform.
Key Players:
8x8 Inc., AT&T Inc., Avaya Inc., Bandwidth Inc., BT Group plc, CenturyLink Inc., Cisco Systems Inc., Dialpad Inc., Frontier Communications Corporation, GoTo (LogMeIn Inc.), Intermedia.net Inc., Mitel Networks Corporation, RingCentral Inc., Verizon Communications Inc., Vonage Holdings Corp.
