Cable's VoIP investment will boost cable telephony: but only with competitive pricing

Analysis firm In-Stat/MDR is out with a new report saying that the increase use of VoIP by cable television system on operators will be a noticeable shot in the arm for cable telephony.

Here's how it all is supposed to play out. At the end of 2004, there were 11.8 million cable telephony households worldwide, but less than 500,000 of those were using VoIP. Yet by the end of this year, that 11.8 million overall figure should rise to 14 million, and will grow to more than 22 million by the end of 2008.

The shot in the arm that VoIP provides cable telephony will largely be due to VoIP technology working its way into the HFC (Hybrid Fiber-Coaxial) networks cable companies use to deliver their services.

An unspecified amount of those additional 10 million subscribers will be VoIP-enabled.

In a statement, In-Stat analyst Mike Paxton added that "virtually all leading North American cable operators are either investing resources to further explore VoIP's viability, or have actually deployed the service."

I do believe Mike is right, but with one important caveat. The service has to be priced at monthly levels that will, to use, marketing speak "delight" customers. Cable system-operator VoIP initiatives such as that Comcast offer I talked about earlier this week may provide free 16-hour battery backup for lost power, but aren't going to be all that attractive when contrasted with more reasonably priced offerings from pure-play VoIP providers.