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| The hidden crisis in VoIP that people are only whispering about | Views: 440 |
| Oct 13, 2006 8:09 pm | | The hidden crisis in VoIP that people are only whispering about | # |
Ira Stoller | | The perils of cheapness
(From Fierce VoIP)
There are a bunch of problems with trying to be a low-cost telecom provider. First is the constant, not-unreasonable fear that your customers will bolt for a competitor as soon as they can save a tenth of a penny per minute. A second is that the effort expended to beat off that ever-cheaper competition turns your business into a never-ending chase for ever-cheaper bandwidth arbitrageurs. And a third is that your bandwidth supplier could, at any moment, become your competitor. It happened a decade or so ago with long-distance carriers, and one analysis suggests that it's happening now to VoIP carriers--to the extent that some resellers/carriers can't even cover their equipment financing costs.
For more information about cut-rate VoIP resellers - read this article from ZDNet http://blogs.zdnet.com/ip-telephony/?p=1267Private Reply to Ira Stoller |
| Oct 14, 2006 12:52 am | | re: The hidden crisis in VoIP that people are only whispering about | # |
Ken Hilving | | Excellent point, and one that applies to any business. If your value statement is lowest price, you are always at risk from competitors with more financial depth beating you in a price war, or some risk taker whose effort to low ball you brings both of you down.
Of all the currencies, money is the absolute worse to make your case on.Private Reply to Ken Hilving |
| Oct 14, 2006 3:50 pm | | re: re: The hidden crisis in VoIP that people are only whispering about | # |
Tom Foale | | Voice is a necessary service to play in the game for broadband providers, but it is probably not a way to earn money in the future. The barriers to entry have almost disappeared - almost anyone can afford to set up a voice service and it is not too technically complicated - so lots will.
These businesses see the incumbents pricing as the target, but in reality they are cannibalising each other. It has happened with ISP's in the UK - hundreds set up, most have failed or are failing and are getting snapped up by bigger players for very little. The few really big players own the vast majority of the market.
I think what will sort the market out is mobile integration and integration across platforms. It is not yet easy nor cheap to do, so I expect those that can offer it will steal the market from the basic VoIP providers.Private Reply to Tom Foale |
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