Bundled VoIP overtaking Skype?

Internet telephony products bundled with broadband services have become more popular than third-party products, according to a report published by Sandvine, a broadband network-monitoring company.

Sandvine said Skype's voice over Internet Protocol, or VoIP, service was overtaken in Europe by broadband subscription packages sold by vendors such as BT, Wanadoo and America Online during the fourth quarter of last year.

In Europe, branded VoIP represented 51.2 percent of all VoIP calls in the last quarter of 2005, while Skype accounted for 45 percent of VoIP minutes. Vonage took less than one percent of the market while other third-party VoIP providers represented 3.5 percent of all VoIP traffic, the report said.

"Twelve months ago, Skype represented 90 percent of all VoIP minutes. Now people are buying branded services," Chris Colman, Sandvine's managing director for Europe, said Tuesday.

Skype's VoIP client has been downloaded more than 245 million times, according to the company. However, analysts have claimed that the actual base of regular users is much smaller. Point Topic estimated last summer that there were 5.3 million Skype users.

While Skype users are continuing to use its services, new broadband users were increasingly opting for broadband packages, according to Sandvine. Skype is a division of eBay, which last September agreed to purchase the VoIP provider

"There are a lot more broadband users now, and first-timers tend to use VoIP supplied with vendor broadband packages," Colman said.

The same trend was found in the North American market. The study found that U.S. branded VoIP represented 53 percent of VoIP minutes on broadband networks. Vonage, with a 21.7 percent share, and Skype, with 14.4 percent, were the leading third-party providers.

The inclusion of VoIP within broadband packages has encouraged broadband take-up, according to analyst firm Yankee Group.

"Broadband service provider-branded VoIP has been a key factor in driving carrier growth and triple-play success over the last year," Nicole Klein, senior analyst for broadband access technologies at Yankee, said in a statement.

The data for Sandvine's report was collected by monitoring the VoIP traffic trends of 700,000 broadband households from a group of service providers with a total of 6 million subscribers.

Tom Espiner of ZDNet UK reported from London.