The new technology, Voice Over Internet Protocol (VOIP), is likely to cause displacements in the market, according to new analysis by Solomon-Wolff Associates, a New Jersey-based market research firm.
“One would think that this new service, which offers unlimited calling at a fixed monthly rate, would attract consumers who spend the most on calling. In fact, the latest data shows that those with high traditional local and long distance bills are more interested, but surprisingly, those with high wireless bills are not,” explains Ms. Joey Wolff, partner, Solomon Wolff Associates.
Wireless users might see VOIP as a way to reduce wireless spending, but the study indicates that so far this has not occurred. People seem to be interested in cutting their traditional phone costs, but they don’t want to shift from wireless back to a wired technology, even to save money.
Further, the study indicates that general awareness of VOIP was already fairly high, before recent media coverage. More than half of those surveyed reported that they were aware of Internet telephone service. Among those, interest has increased consistently, up from 25 percent in January 2002 to 31 percent in July 2003.
“Consumers don’t know about specific VOIP plans yet,” said Ms. Wolff. “But they do like plans with a fixed monthly charge, and they are willing have lower quality for other benefits. If VOIP promises lower costs, this will appeal to them rather than the technology behind it.”
Analysis of the Solomon Wolff database shows that customers most likely to try VOIP are long distance high spenders, and those who use new technology. People who are high spenders for local phone service, or who have high incomes are moderately interested. Wireless phone users are no more or less interested in VOIP than an average consumer.