2007 has been a devastating year for many hopeful VoIP services. In a follow up of our market research carried out 12 months ago in 2006 (85 VoIP services shut down), this year saw a substantial escalation of retail VoIP services shutting down resulting in the death of 171 VoIP providers in the period November 2006 to October 2007.

The exponential growth of the VoIP industry in the past 3-4 years is now leading to an exponential growth in fatalities within the industry. The barriers of entry are very low and any tech savvy internet user can get a "VoIP business" up and running within a few days as a reseller. Although many of these now bankrupt VoIP services may have been fly by nights some of the biggest players in the industry were forced to shut their doors in 2007. The largest VoIP service (with over 200000 users) to shut down overnight was the second largest provider in the USA - www.sunrocket.com. The capital loss for each user individually is relatively low, however the inconvenience and hassles of loosing one's telephone is exceptionally aggravating, especially for small businesses.

Within the same time frame around 150-200 new VoIP services launched around the world bringing the total to over 1100 VoIP services worldwide offering cheaper calls to retail customers.

International call rates are at an all time low and will drop even further. Without a clever business and especially an on- and offline marketing and sales plan and without a key differentiator many of these startups will disappear again within the next 12-24 months.

It will be difficult to create a second Skype service, however nobody seems to be developing a VoIP application for Facebook. With Facebook's 40 - 50 million users this could be a worthwhile exercise - food for thought!

For all those interested in the list of "dead" VoIP services - see below or refer to the following page for the 2005 - 2007 VoIP Graveyard.
 

Status : 11-11-2007 - www.myvoipprovider.com