By now, I am sure most must have read the Page One story in The Wall Street Journal on VoIP, and its effect on the telecom business. A few months ago when I wrote, Telecom’s Continuing Death Spiral, I knew it would take a few months, but someone is going to put all the pieces together, and write a kick-ass article on it. And Ken Brown and Almar Latour did a spectacular job. The article was so “money.” I loved this quote, “Anyone who wants to go into the phone business can do it,” from Bryan Martin, the chief executive officer of 8×8 Inc., in Santa Clara, Calif. Well anyone can, many are doing, and most are going to die. Just like there were hundreds of ISPs and most are gone, the same is going to happen here. I think what we see is the change in the kind of incumbents in the future.
I would like to add one tiny bit which the story did not dig into: ten years ago, there were maybe five long haul networks. five year ago there were about 25, and ten years later the long distance and bandwidth business have been destroyed beyond recognition. Now look at local loop. There used to be one. Now there are three local loops – wireless, copper loop and the coaxial loop. And people can only talk so much. Wait for the local loop business get destroyed. VoIP is just going to accelerate the whole process, and act as a manure for the destruction. It may not happen in one straight downward curve, it might be jagged decline, but in ten years from now…. oh boy! In case you were wondering, we can see some of that happening in Europe.