2007: Year of VoIP provider consolidation?

According to some VoIP industry watchers we can expect to see some serious consolidation in the US this year.  Business consulting firm, Colorado-based Franklin Court Partners, believe that after the recent explosion of VoIP providers there will inevitably be a process of consolidation this year as the market matures.

Many recently launched VoIP providers only operate within a local regional area, offering cheap calls nationally and internationally to their relatively small customer base.  Due to this tendency for locality in new VoIP startups there has been no new contender to Vonage’s crown, currently the only real pure-play national VoIP provider to date.

The fact that there is this local-factor makes it more of a challenge for businesses to switch to VoIP, especially those companies with branches spread out across the country.  On the other hand, it could be argued that residential customers actually prefer dealing with a local company.

In my opinion consolidation must happen for VoIP to be taken seriously as an alternative to PSTN landlines.  It would also be handy to see a true competitor to Vonage, which could signal the start of a price war within the internet telephony market.