24 thoughts on “Should VoIP Start Ups Start To Worry?”

  1. EVERYONE is suggesting that voice will be free. And I have to be honest, I can’t imagine that it WON’T be free at some point. Then again … I’ve never worked in the phone business nor tussled with the phone companies …

  2. Will tactics like port blocking be effective in a world where folks are using GoogleNet (or Yahoo!Net, even eBayNet)? In essence, if the telcos and cablecos put up enough roadblocks, could they find that they’ve been routed around?

  3. It’s free until the company offering the free service goes bankrupt. This “Free” concept is a nice catch phrase, but really the costs are there – billing, QoS, support, engineering, etc.

    I’ve always questioned why a Verizon or Bell South would let a third party voice app ride their expensive networks without compensation.

    On the flip, I can see ISP’s and advertising funded services (i.e. future Skype and Google) providing “free” phone services. Again, that is if they can ride the last mile.

    Last mile is critical, IMO. And the last mile IS NOT FREE!

  4. Telcos understand, and are built for, scale. 500,000 paying customers is peanuts. Try provisioning, billing, servicing, maintaining 15 million. I agree with Om, the incumbents have the upper hand.

  5. FWIW, I have Lingo at home–unlimited local and long-distance, unlimited to Mexico (where I have family), and virtual line in Mexico (so they can call me for free) all for $40/month. As soon as 911 service is up to par with my landline I will cut my Qwest line immediately!!! I have no use for regional monopoly telcos. They just charge me fees and offer me high priced add-ons (all free of course with VOIP) that I do not need or use.

  6. I recently cancelled my Vonage account – http://www.moskalyuk.com/blog/saying-bye-bye-to-to-vonage/845 – after being a customer for more than a year. Occasional service outages, hiccups on the phone line during “peak” hours, Vonage’s inability and unwillingness to work on the quality of international calls – screw that, an SBC phone line with a phone card for international calls is more reliable, and cheaper, too.

    Granted, the phone company charges you for little things like 3-way calling and caller ID, but they’re not that important to me.

  7. VoIP service providers need to worry because they are not offering VoIP service; but instead they are offering directory service and NAT traversal. Both of them are incidental services and not worth charging for as demonstrated by the current crop of service providers offering them for free. Since “equal access” is built into IP networking, there can not be a monopoly.

    As far port blocking, the question is whether the ISP is offering internet access or something else. If it is the former, they should only control the amount of resources consumed at the networking layer rather than base the control logic based on the nature of applications. Even if they do, they will fail because it is contrary to the layering principle.

  8. I always ask the question “who do you trust?”. POT providers, why should I trust them? In most of the European countries they have been quite sucessful monopolists initially as service providers and later as infrastructure owners. The price for the consumer has been too high.

    If infrastructures were built to meet citizen/user requirments, and services providers could purchase access to these infrastructures at a cost without being in competition with the infrastrucuture provider, then citizens/users would benefit. We have yet to see this in practice.

    VoIP services over the Internet is the first time we have the chance to monitor infrastructure independant services. If only the infrastructure providers could manage to stay away!

  9. While it is always prudent to observe what any 800 pound gorilla will be grabbing for, we should remember centrex the PBX killer, boy, that was great to sell against. Remember little teensy things like product/service packaging and good customer service will always win with people who have a bad taste from all the excellence their telco has delivered in the past.

  10. People, i think the best thing to do is go and re-read what aswath is saying about the current value proposition of the voip services. I could not agree more with him. I have used a ton of these VoIP services, and none come close to replacing the convenience of my cell phone. at $80 for nearly unlimited calling, anywhere and anytime, i am not sure I need anything else.

  11. When voip goes wireless, we enter a whole new ball game. And I think it will be like cellular on steroids. That’s when we start knocking balls out of the ballpark.

  12. What startups are we referring to anyway? Vonage, et al can hang it up as far as I’m concerned. I’ve never even considered saving $10 a month for worse service. Vonage has always been nothing but a phone company wannabe, IMO.

  13. Only to-day Betanews reported that Flaws have been discovered in the Skype VoIP system although skype claims that the flaws have been patched. Nobody can claim that the patches would not have the flaws. Often the flaws have more patches then the original software. It is a shame that people will find justification for a price tag of billions of dollars for a flawed system. The fact is that the VoIP technology is not needed when there are cellphones. As a matter of fact the advent of cellphones should have led to the redevelopment of the internet service method that would have made the Personal Computers including Laptops obsolete. This method is discussed at

    that would have meant an unflawed system of on-line business files freedom from identity thefts. I get daily emails telling me that my ebay and paypal email numbers have been changed. I don’t even have email and ebay accounts. Many people are using my name to do business in my name. But there is nothing I can do about it because Paypal and ebay would not take my complaints without my password. Obviously I do not have a password since I have not opened an account. I get emails at all my email accounts that there is a suspicious activity at my Paypal and ebay accounts and they have been suspended. I get such emails from banks too. Scares the hell out of me. funny there is no account of such activity in my credit reports.

  14. Didn’t Kevin Mitchell used to be a left-fielder for the Giants & Padres? 😉

    Personally, I’m waiting for the wireless phone companies to start offering phones that can switch between wireless and VoIP over a home WiFi network. I would pay a few bucks extra for that, and it would still save me money, because I wouldn’t be paying as much as I am for Vonage. Verizon already does VoIP with VoiceWing. They ought to find a way to combine wireless and VoiceWing service together.

    What I could really use, though, are a few Bluetooth repeaters around the house, so that I can walk anywhere with my headset in my ear and not miss anything…

  15. I help buyers negotiate technology contracts – msotly software and outsourcing related. I love the tech industry because you have ingenious start ups from the most unexpected places…open source vendors from Scandinavia, offshore vendors from India – which challenge incumbents and force innovation and more rational pricing. I hope the Bells fight the battle through more rational pricing not through blocking tactics. Buyers are fairly loyal, but they are not stupid.

  16. There are some excellent points here, but realistically it’s hard to imagine a scenario where SBC would actually admit that they were doomed publically.

  17. i re-read some of the comments above…agree US long distance rates have been beaten down…but try a number of international destinations makes sense to use VoIP…ever tried calling from one foreign country to another using a US plan cell phone? cheaper to fly to the destination…so if these rates get rationalized VoIP is much less attractive

  18. VoIP is a service and it will likely be free in the not too distant future, connectivity and presence is what you will still pay for and the incumbents SHOULD have that sewn up (if they’re not too busy pissing away money on IMS infrastructure and content portfolios!)

  19. Because any VoIP user can call (or get calls from) any phone anywhere, there isn’t a big incentive for users to cluster onto the same carrier, nor is there a critical-mass requirement for carriers. So there are lots of VoIP carriers, making phone service (VoIP or not) pretty much a commodity business — and the advantage in a commodity business goes to the established big players.

    The one problem the incumbent telcos have is that they’re extremely reluctant to cannibalize their existing non-VoIP business. Some of them will end up losing lots of subscribers, especially to the (also incumbent) cablecos. (It’s happened before. My telco “forgot” to tell me about its new competitively-priced long-distance plan, hoping I’d just stay on its expensive one forever. It lost my business to a long-distance carrier.)

  20. VoIP is just another service, it will be free or close to free sooner or later. Vonage doesn’t even have a billing system that would let it offer pricing to fit for different customers. The pure-plays won’t be around for long, as the cable and the big boys will squeeze them out. Cable companies will offer the free voice just to make sure their video and data customers don’t leave ship. They key for the industry is working out the billing systems (online) for the additional services that will soon be coming that customers are actually willing to pay additional for.

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