New Survey Shows Voice Over Internet Protocol (VoIP) Taking Root in Business

ROCHESTER, N.Y. – March 14, 2005 – According to a new nationwide survey of U.S. adults, awareness and familiarity of Voice over Internet Protocol (VoIP) are significantly higher among businesses than among consumers.

• While nearly nine in 10 (87%) business decision makers are aware of VoIP (76% at least somewhat familiar), one-third (36%) of consumers are aware of VoIP (56% at least somewhat familiar).
• Furthermore, while 12 percent of business decision makers familiar with VoIP currently use it, only three percent of consumers familiar with the technology use it.

These are some of the results from The 2005 Telecommunications Report, a study conducted quarterly by Harris Interactive^®. The most recent study was conducted in January 2005 among a sample of 1,473 U.S. adults and 335 business decision makers.

The survey suggests that there are several barriers to consumer adoption of VoIP. Some of the barriers relate to attitudes toward the new service. Among those who are aware of VoIP, but do not use it:

• I just don’t know much about VoIP (47%);
• VoIP providers have failed to show me a convincing story (36%);
• I’m waiting for VoIP to become more mainstream (34%);
• Recommendations would help me move toward VoIP (27%);
• Potential savings are just not worth the hassle (25%);
• VoIP seems too complicated (equipment, installation) (22%); and
• VoIP is an unproven technology (22%).

Other barriers stem from the perceived drawbacks of the technology. Among those who are aware of VoIP, but do not use it:

• VoIP might not support 911 calling in my area (62%);
• VoIP could be subject to security and privacy issues (60%);
• In a power failure situation, VoIP would not work (58%); and
• The quality of my calls could be worse than with traditional phone service (52%).

While these barriers obviously pose challenges for VoIP service providers, there is some good news about this new technology. Of those consumers surveyed who currently use VoIP, many say they are either very (13%) or extremely (27%) satisfied with their service while an additional 44 percent say they are somewhat satisfied. The same can be said for businesses that use VoIP. Of those business decision makers surveyed who use the technology, one-third (34%) say they are very satisfied and seven percent say they are extremely satisfied with their VoIP service. An additional 54 percent report being somewhat satisfied with their service.

Also, of those business decision makers surveyed who are likely to use VoIP technology within the next year, nearly three-fourths (72%) are projecting a savings of between 11 and 40 percent in their annual telecom budgets. (See Table 8)

"Addressing the perceived barriers to VoIP technology presents a challenge for service providers, but the potential savings by businesses may be the leverage providers need to not only attract the attention of more businesses, but to seed interest in consumers as well, says Joe Porus, chief architect for Technology Research at Harris Interactive. "And when consumers take into account the overall satisfaction levels of both businesses and consumers who already use the technology, adoption rates may begin to grow."

"New technology has come on the scene…referred to as Internet Telephony VoIP. Are you aware of this term?"

Base: All adults

"How familiar are you with this new technology?"

Base: Aware of VoIP term

"Are you currently using VoIP?"

Base: Familiar with VoIP

"How likely are you (your company) to use VoIP within the next year?"

Base: Does not use VoIP

Percentages represent combined "4" and "5" responses from a scale of 1 to 5 (5 = "very important")

"Please indicate the extent to which you agree or disagree with each of the following statements."

Base: Does not use VoIP

"VoIP offers many advantages, but there are some drawbacks as well. In deciding whether or not to adopt this technology, please rate each of the following limitations of VoIP in terms of that limitation’s potential impact on your decision."

Percentages represent combined "4" and "5" responses from a scale of 1 to 5 (5 = "A Show Stopper" and 1 = "No big deal")

Base: Consumers who do not use VoIP

"Overall, how satisfied are you with VoIP?"

Base: Use VoIP

* Very small base.

"With the adoption of VoIP, what level of cost savings are you projecting with respect to your annual telecom budget?"

Base: Likely to use VoIP

* Very small base.

Harris Interactive^® conducted the online study in January 2005 among a nationwide sample of 1,473 U.S adults (aged 18 years and over) and 335 U.S. business decision makers aged 18 and over. Figures for age by gender, race/ethnicity, education, region, household income and sexual orientation were weighted to reflect the total U.S. adult population. Propensity score weighting was used to adjust for respondents’ propensity to be online.

In theory, with a probability sample of this size, one can say with 95 percent certainty that the results for the consumer sample have a sampling error of plus or minus 3 percentage points and results for the business sample have a sampling error of plus or minus 5 percentage points. Sampling errors for sub-sample results (see tables above), are higher and vary. Unfortunately, there are several other possible sources of error in all polls or surveys that are probably more serious than theoretical calculations of sampling error. They include refusals to be interviewed (nonresponse), question wording and question order, and weighting. It is impossible to quantify the errors that may result from these factors. This online sample was not a probability sample.

The Harris Interactive Technology Research group doesn’t just monitor and measure the industry. It interacts with the thought leaders who drive technology, telecom and e-business everyday and provides insights from a variety of vertical perspectives. Using the group’s unique knowledge, experience, and expertise in both the telecommunications and information technology sectors, Harris Interactive asks the right questions, confirms business issues, designs and implements studies to provide clients with actionable results.

A copy of The 2005 Telecommunications Report can be obtained upon request.

Harris Interactive Inc. (www.harrisinteractive.com), the 15^th largest and fastest-growing market research firm in the world, is a Rochester, N.Y.-based global research company that blends premier strategic consulting with innovative and efficient methods of investigation, analysis and application. Known for The Harris Poll^® and for pioneering Internet-based research methods, Harris Interactive conducts proprietary and public research to help its clients achieve clear, material and enduring results.

Harris Interactive combines its intellectual capital, databases and technology to advance market leadership through U.S. offices and wholly owned subsidiaries: London-based HI Europe (www.hieurope.com), Paris-based Novatris (www.novatris.com), Tokyo-based Harris Interactive Japan, through newly acquired WirthlinWorldwide, a Reston, Virginia-based research and consultancy firm ranked 25^th largest in the world, and through an independent global network of affiliate market research companies. EOE M/F/D/V

To become a member of the Harris Poll Online^SM and be invited to participate in future online surveys, visit www.harrispollonline.com.

Nancy Wong
Harris Interactive
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