Echoing the similar thoughts of many, Techdirt today talks about the VoIP bubble and the response of the US incumbents. The money quote:
Everyone seems to forget, of course, that BellSouth actually tried to offer VoIP for about a week a year ago and suddenly someone higher up freaked out and pulled the plug. While the big telcos claim they're jumping on the VoIP bandwagon, there's still going to be an internal struggle of cash cow vs. emerging technology. I'm not convinced that the telcos are prepared to cannibalize their own business yet.
Indeed. My personal view: the incumbents have no real commitment to VoIP roll-out, and the key motivator is to undermine those who try by pulling the bottom out of the VoIP market. The lack of spin-offs explicitly motivated to undermine the legacy business talks louder than a thousand press releases. Any VoIP upstart inside a legacy telco has to face a negative ROI according to traditional cost accounting; it requires "irrational" resource allocation to compete against other projects.
Expect also to see products that are deliberately short on service and performance that give VoIP a bad name -- this is a marketing struggle, not a technology battle, and anything goes.
My prediction is that in the short term this strategy of resistance to change will meet with some success. The initial entrants will be crushed because dropping the price of PSTN lines is a viable response to a VoIP PSTN clone. The average user isn't quite ready yet to roll their own telco service.
But the longer-term effect will be disastrous. The incumbents will fail to build end-to-end compatible business models in time: they need to find end-to-end-to-end businesses where the middleman adds value.
IBM and friends will trickle down enterprise VoIP into the middle market. Microsoft will drive integration with Exchange and demand for end-to-end IP real-time communications. The mega-ISPs will pick the winning bits out of Skype, Voicepulse, Vonage, Stealth, Free World Dialup, etc. into a "plug it in -- turn it on" consumer proposition. You can't drop the price of PSTN calls below zero and stay in business.
Posted by Martin Geddes at 1:30 PMTrackBack URL for this entry:
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