Study forecasts massive consumer savings due to VoIP, competition

The benefit to consumers from Voice over Internet Protocol (VoIP) services being actively deployed by cable companies and other telco competitors should exceed $100 billion over the next five years, according to a new study from MiCRA economic consulting.

According to the study, “Consumer Benefits from Cable-Telco Competition,” 23.7 million households will subscribe to cable telephone services by 2011. In the study, MiCRA calculates consumers will benefit from a savings of $1.3 billion in 2007, which will climb to $3.2 billion in 2011, based on the price difference between cable telephone service and traditional telephone services.

The study finds that indirect benefits from the competitive pressure placed on the incumbent local exchange carriers (ILECs) by competitors will be about $70 billion over the next five years. Additionally, the study finds small businesses stand to save more than $525 million due to the competition over the next five years.

Fierce competition in the market to provide telephone service is often cited as a reason for telcos to expand their offerings by adding services like IPTV.

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