As Voice over Internet Protocol enters more households, traditional providers like Vonage and Skype are finding strong competition in big companies like Verizon and Cox.

In Rhode Island, Cox Communications – which has been so successful with its cable-based phone service here that Verizon’s state market share is the smallest in the nation for an incumbent carrier at 60 percent – is gradually converting its network to VoIP.

Last year, Cox and its primary vendor, Nortel Networks, announced plans to upgrade Cox’s telephone circuit switches to allow them to support traditional telephony as well as VoIP (since IP telephony is generally less expensive, Cox could modernize and cut costs with one move).

At the end of 2005, Cox had about 510,000 residential VoIP subscribers nationwide...Cox spokeswoman Leigh Ann Woisard said the VoIP service is only offered “on a limited basis” in Rhode Island now, but will be rolled out later this year.

Verizon, which launched its VoiceWing broadband phone service in 2004, had an estimated 120,000 subscribers nationwide as of December...