VoIP penetration as a home phone service solution is slowly gaining traction within U.S. households, reports Telephia. Overall penetration for VoIP (voice over Internet protocol) increased to 3.5% or nearly 3.9 million households in January 2006, up from 2.9% in June 2005. Vonage led the VoIP market, which includes all pure-play VoIP companies and providers who actively promote their VoIP service as Internet telephony. Vonage secured a 47.5% market share or nearly 1.9 million households in January 2006, up from a 40% share in June 2005.

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According to the Telephia Emerging Personal Communications Options survey, Skype posted an 11.8% market share, translating to more than 463,000 households who subscribed to the service in the U.S. during January 2006. AT&T Call Vantage claimed a share of 5.6%, representing 218,000 households, while Verizon Voice Wing followed closely with a 5% share, accounting for nearly 196,000 households.

"The combination of voice quality, reliability, and price could be a potent blend in attracting mainstream consumers. With more of the population converting to high-speed Internet connections, it opens up an opportunity for VoIP providers to gain a significant foothold in the market," said Kanishka Agarwal, VP/New Products.

Telephia data shows that 67% of VoIP early adopter households felt that the voice quality they experienced with the service was equal to traditional landline service, while 19% noted that the voice quality was better than wired phone lines. According to Telephia's EPCO survey from June 2005, 91% of Vonage early adopter households said that the company had equal or better voice quality, while 99% of Skype early adopter households felt that Skype scored equal or better than landline phones.

In terms of overall service reliability, 71% of VoIP early adopter households reported Internet telephony as having equal reliability to conventional wired phone lines. 16% considered VoIP to have better service reliability. Vonage also scored high on service reliability, with 91% of its early adopter households noting the company's reliability was equal or better than landlines. Nearly three out of four of Skype's early adopter households (74%) thought that Skype had equal or better service reliability.