8/1/2006 -- These are heady times for VoIP service providers. Revenues roughly doubled in North America, Europe and Asia Pacific between 2004 and 2005, market watcher Infonetics Research says, and should continue to boom through 2010.

When it's all over but the profit-taking, Infonetics projects that customers will have spent a combined $120 billion on VoIP services in all three regions.

"Businesses around the world are migrating to IP for increased functionality, greater flexibility, improved productivity and the potential of growing revenue through better customer service," said Stephane Teral, principal analyst at Infonetics Research, in a statement.

VoIP is hot in North American, Teral indicates, but it's even hotter in central and eastern Europe. "VoIP services continue to pick up fast in North America and in many parts of Europe, particularly in central and Eastern Europe, where small businesses have a strong appetite for business trunking, IP Centrex and VoIP VPN services," he says. "In Asia Pacific, VoIP service revenue about doubled that of North America and Europe in 2004, and continues at a blazing pace. China will likely emerge as a major VoIP business market in the coming years because the Chinese government is encouraging carriers to accelerate the migration to IP Centrex and IP PBX from their existing TDM Centrex."

In North America, VoIP revenues are pretty evenly split between business and residential customers (49 percent and 51 percent, respectively), but uptake in other regions has a pronounced consumer tilt, with residential sales accounting for as much as 72 percent of European VoIP revenues and 83 percent of Asia-Pacific VoIP revenues. Globally, the number of VoIP subscribers is expected to top 47 million by the end of the year.

Vonage remains the North American VoIP leader, at least among residential and SOHO customers, but its overall market share dropped from 34 percent in 2004 to 27 percent in 2005, in part because of fierce competition from cable MSOs, traditional telcos and low-cost new entrants.

Cable companies, for their part, are doing their utmost to maximize their share of the VoIP pie: Cablevision and Time Warner Cable both have double-digit share and combined account for more subscribers (39 percent) than market leader Vonage. AT&T, Comcast and Cox are the only other providers with North American VoIP subscriber share greater than 3 percent, Infonetics says. -Stephen Swoyer