Boston, MA - February 15, 2005 - Local phone companies will lose millions of residential customers this year, as cable TV operators launch Voice Over Internet Protocol (VOIP) telephone service into dozens of US markets, according to technology research firm Strategy Analytics.

In a new report, "Cable Takes Aim at Telcos with VOIP," the company predicts that the number of US households using cable-delivered telephony services will grow from 3.3 million today to nearly five million by the end of 2005. In addition to accelerating access-line losses for the Regional Bell Operating Companies (RBOCs), cable's aggressive move into VOIP will give top operators such as Comcast and Time Warner Cable, an early edge in the race to deliver "triple-play" service bundles combining TV, telephony and high-speed Internet access.

While RBOCs such as SBC and Verizon have announced plans to offer consumers IP-based TV service along with telephony and DSL, these will take much longer to roll out on the same scale as VOIP.

"The competitive mathematics are simple," notes James Penhune, director of the Strategy Analytics Broadband Media and Communications practice. "Cable will use VOIP to steal telco customers sooner than the RBOCs can use IPTV to steal cable subscribers."

In addition to the appeal of buying multiple services from a single company, the report predicts that consumers will respond to the improved quality of cable VOIP as well as aggressive marketing and pricing by major operators.