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December 29, 2003
VoIP: Beyond Cheaper Phone Calls
A couple of weeks ago I spoke with a reporter from the Wall Street Journal who was doing a story on VoIP focusing on access charges and other costs associated with running a VoIP network.
After reading the piece earlier today, I'm glad that I was able to
indirectly help the writer refocus his attention to write about something else - the advent of lower costs associated with VoIP calls. (That wasn't my intention either.)
It is real clear to me that there is still a lot of outreach that needs to happen between those people who write business stories on VoIP and those people who will be directly affected by such stories.
Starting in January we will begin our media outreach for Spring 2004 VON to make sure that the voices of the industry are heard by those who need to hear it the most.
From my side, when looking at the costs of running a startup IP Communications service provider, the biggest cost to deal with will for a long time continue to be subscriber acquisition costs.
Forget about any access charge arbitrage or misunderstandings about how universal service fees are dealt with. The biggest costs that AT&T, Comcast, Time Warner and Vonage have to allocate for are - get this - MARKETING costs and the associated costs of obtaining and keeping new customers.
While there are some regulatory lawyers who would like nothing more than to focus the attention of the widespread adoption of VoIP on regulatory approaches to these new services, the fact remains that for the most part both start-ups and established operators have to anticipate to spend a large amount to create awareness about their service offerings and also make sure that their product has all of the bells and whistles needed to keep their new customers happy.
The established telcos have a significant advantage in this department since there is an implied level of "trust" between these companies and their existing customers. Start-ups will spend millions and millions to create branding an attempt to create an equal level of trust.
As we end 2003, the one thing all of these service offerings have in common is the ability for consumers to purchase dialing plans on broadband voice similar to how cellular minutes are being marketed.
While today the buy-in is that the monthly costs to subscribe to a IP Communication service provider will end up being cheaper than being serviced from alternative service providers, this may not always be the case, especially when the other "killer apps" for communications are discovered and customer channels are leveraged to sell these value-added services to their customers.
Hopefully when we are ending 2004 there will be other things that IP Communications will be known for by the mass media other than the fact that the costs using VoIP are a little bit less than other communication platforms.
Posted by jeff on December 29, 2003 01:27 PM | Permalink
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