Analyst firm Ovum forecasts that VoIP will make up 21 per cent of fixed-voice revenues in Australia by the end of 2011.

Between April and September 2007, the number of VoIP providers increased by 27 to 269. It is, however, more difficult to get reliable estimates of the number of VoIP subscribers because many VoIP providers do not release their subscriber numbers.

One estimate from Market Clarity forecasts a 237 per cent increase in internet-based VoIP subscribers between June 2007 (1.4 million) and June 2008 (4.8 million).

Moreover, VoIP providers use various business models and pricing structures.

Service providers can bundle VoIP with other services-18 per cent of Internet service providers (ISPs) bundle their services with VoIP.

Some VoIP providers are ISP-independent and offer their services to anyone with a VoIP-capable Internet connection.

Others use a hybrid approach, where ISPs offer VoIP to their own broadband customers as well as other consumers. VoIP services are cheaper than traditional fixed-voice PSTN pricing-VoIP calls may be free if made between customers on the same VoIP network.

While cheaper pricing is attractive for customers, it also places pressure on revenues. Consequently, pure-play VoIP providers may have more difficulty sustaining a business case.