In-Stat Reports 7.9 % of U.S. Households Now Use a VoIP Telephone Service, Up From 6.5 % at the End of Q2

SCOTTSDALE, Ariz., December 20, 2006 - Voice over Internet Protocol (VoIP) continues to gain users in the residential telephone service market, according to In-Stat (http://www.in-stat.com). According to data from the high-tech market research firm s newly launched Residential VoIP Tracker Service, more than 9 million US households now have at least one active VoIP user, with many households reporting the use of more than one VoIP service.

The firm s new service utilizes a combination of end-user research and market analysis to estimate usage and market share among all of the major service providers, both facilities-based providers like Vonage and client-based providers like Skype, on an ongoing basis.

Recent research from the service also revealed that:

- Vonage and Time Warner Cable continue neck-and-neck among facilities-based VoIP subscribers with an estimated 1.7 million and

1.6 million active households respectively.

- Skype continues to dominate among client-based VoIP services with

2.1 million active households, while Microsoft gained more than 1.1 million active households as of the end of Q3.

- In a recent survey, 49 % of current residential VoIP users reported that they had discontinued a traditional (non-VoIP) phone service when they got their VoIP services, including nearly 12 percent of respondents who report that their only VoIP service is client-based.

This suggests that the rapid growth of users for client-based services like Skype and Yahoo! Messenger with Voice is also having an impact on incumbent service providers.

- Half of users report using their residential VoIP service either in part or in whole for business purposes, including more than 40 % of client-based VoIP users.

About In-Stat s US Residential Voice-Over IP Market Dynamics and Market Tracker service:

This service relies on a combination of quarterly end-user surveys and ongoing analysis of activities by major VoIP service providers and provides the following benefits:

- Tracks residential usage of both facilities-based (e.g., Vonage, AT&T CallVantage) and client-based (e.g., Skype, Windows Live

Messenger) VoIP services, including subscribers, users, households, and market share (approximately top 20 VoIP service providers overall)

- Provides quarterly snapshot of usage patterns and trends including number of calls, length of calls, international calling, business versus personal calling, monthly spend, user satisfaction, intent to churn

- Examines trends in current and planned use of VoIP peripherals (e.g., USB phones, wireless headsets, Web cams)

- Includes updates on recent strategic moves by key market participants (e.g., launch of AOL Phoneline and comparison of its open API and developer program with Skype strategy)

In addition to the subscription service, individual report options are available. For additional information, please visit:

http://email.in-stat.com/cgi-bin4/DM/y/e2oN0HsuUV0K560EwtV0Ev

About In-Stat

Technology vendors, service providers, technology professionals and market specialists, worldwide, rely on In-Stat s experienced staff and in-depth research to support critical business, product and technology decisions. In-Stat s insights are derived from both a deep technology understanding and comprehensive research, which examines each segment of the value chain for each market. Regular and ongoing end-user demand and primary research surveys underpin much of the analysis, enabling In-Stat to provide incisive market knowledge and guidance on future market opportunities.

In-Stat is a strategic segment of the $9 billion Reed Elsevier global information network, with access to an expansive worldwide electronic network, extensive technology databases and well-informed personnel.

As a member of Reed Business Information, In-Stat is a division of the largest business-to-business publisher in the U.S.

Charles Gerlach

Director of Consulting

In-Stat

(312) 224-2674

charles.gerlach@reedbusiness.com

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