While VOIP penetration has reached an impressive 1.1 million, only 230,000 are paid subscriptions with analysts blaming free offerings for the false readings.

Research firm Market Clarity director Shara Evans said VOIP services have only begun to catch up with subscriptions, despite VOIP technology being available since 2004.

"Internet-based VOIP is expected to generate revenue of close to A$85 million (US$66 million) in 2006 to 2007 which represents low average revenue, considering the population will reach 1.4 million users in the same period," Evans said, adding subscription levels include free accounts which may be inactive or have up to five accounts signed to a single user.

She said while revenue can be gained from enhanced services such as VOIP to PSTN, or by underwriting advertisement into free services, the technology will contribute very little to total telecommunications revenue, even by 2011. But regardless, VOIP technology is charging ahead. Evans says mobile VOIP is active in Australia and leverages WiFi to negate expensive cellular data fees.

"There are a number of providers offering mobile VOIP in Australia now which use IP architectures to save on hefty cellular data fees," Evans said.