Time Warner is certainly nipping at Vonage's heels, and my guess is that they will catch and then bypass Vonage by year-end. If not then, I'd say by Q1 2006 for sure. Vonage has enjoyed 50%+ market share for some time, and they deserve all the credit for building their brand, and getting consumers to equate themselves with VoIP. If VoIP is hamburger, then Vonage is McDonalds. That said, consumer tastes are changing, and they're upsizing to the bundles offered by Time Warner, Cablevision, etc. Bottom line - Vonage's rate of growth is very likely slowing down as deep-pocketed MSOs and telcos enter the market and offer attractive alternatives to POTS.
We're still in the early innings here, and I believe there will be room for both kinds of offerings - the ever-convenient, value-rich Triple Play, as well as the really good pure play VoIP offering - for which Vonage has successfully set the standard.
With that all said, it's easy to see why Vonage is making a lot of noise about a million - whatever they're counting. The American MSOs can't make that claim first, so get it in there while there's still time. Then you have some people out there lumping in the peer to peer players like Skype, Free World Dialup and Voiceglo, and all of a sudden, Vonage doesn't look so big. That's just downright confusing, and it reflects a basic misunderstanding about the various flavors of VoIP out there.
One person who does have this right is Paul Taylor. Paul wrote a good piece on the overall state of VoIP in the UK's Financial Times late last week. He was nice enough to cite me, and, on the whole, the media was pretty good to me last week, and I've done my best to share these citings on my recent blog postings.