Internet telephony Asia will triple to total almost 500 billion call minutes by 2009 and prices will fall, according to new research.
However, growth is being held back in some areas by inflexible government regulations and the continuing domination of older service providers.
"In Japan, South Korea, Hong Kong and Singapore, a large portion of long-distance calls has already migrated to the IP platform," the report stated.
Long-distance and international calls accounted for over 85 per cent of VoIP revenue in 2004.
"By contrast, the adoption of local VoIP services is slow due to regulatory barriers in many countries and the dominance of incumbent players," said Victor Liu, an analyst at In-Stat's regional headquarters in Singapore.
Both companies were able to break into the market early, in part due to a lack of regulatory hurdles, and attracted customers with the convenience of combined voice and data services.
The company claimed to be gaining over 40,000 subscribers a month to reach nearly 4.9 million by June this year, 95 per cent of whom are using the VoIP service.
"Competitive service providers such as Yahoo BB have demonstrated how they can creatively leverage technological advantages to introduce new services and woo customers in a loose regulatory framework," said Liu.
While VoIP is doing well in East Asia's wealthier nations, governments in some other countries have been over-protective of incumbent telecoms operators, resulting in poorer adoption of VoIP.
While VoIP has proved popular in China, for example, state-owned China Telecom has reportedly experimented with blocking Skype and other VoIP services to protect its revenues, citing government regulations in support of this action.
In related news, Taiwan's government last week announced a plan to fully integrate VoIP services with the traditional local and international telephone network, the China Times reported.
Taiwan's ministry of transport and communications said that it would issue blocks of phone numbers to local VoIP operators, which they could then assign to customers.
The phone numbers will follow the global E.164 standard, allowing, for example, international calls from a traditional phone anywhere in the world to reach a VoIP number in Taiwan.
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