7 thoughts on “The great VoIP Implosion”

  1. It is interesting to note that for all the publicity AT&T is receiving on this news, when it is not going to impact the first year revenue (20×6+35×6 vs. 30×12-30).

  2. AT&T previous promotional plan was $20 for the first 6 months. Today’s announcement terminates that program, but gives the first month free. So both the old plan and the new plan will generate $330 in 12 months. So this announcement doesn’t cost AT&T much, indeed it increases revenue in the short term; but forces Vonage and others to take a hit. Smart move, I would say.

  3. Om, I should know this, but what is Vonage’s hard cost for terminating calls at this point? If I make 1,000 minutes or 5,000 minutes of calls a month, they have fixed fees, sure, for maintaining equipment, relationships, staff, all the overhead stuff. But I don’t know if they pay a penny a minute for termination or 5 cents a call or what have you. Or, if they’re totally exempt.

    I currently have the local unlimited, which was just bumped to premium at the same price under this price change, and I actually don’t use the service very much because of a weird DSL problem. I’ve been tempted to cancel, but now I’m thinking I should just make it work!

  4. Glenn, this reply is not based on knowledge, but only deductions based on observation. I think only a handful of Egyptian high priests, sorry FCC focused lawyers, know the correct answer.

    Currently these service providers pay any termination charges. That is why AT&T petitioned to FCC that they need not have to pay termination charges even for PSTN calls if they carry it as VoIP. In any event we can bound the total cost (transposrt and termination charges) by looking at Skype’s charges and calling cards that are available to PSTN users – about 2 cents per minute. On top of this, Vonage et al have another source of income – termination charges for incoming calls – that are not available to Skype.

    Rationalization of settlement charges is going to be a “disruptive” event for this industry.

    At least that is the view of a 4 dimensional world by a three dimensional man.

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