Friday, January 06, 2006

Deceased - Voice Carrier Cash Cow.....

I love Om's rants about VoIP silos and breaking down the walls. Its good to get frustrated about boneheaded moves by companies, but we must remember - they are new companies out to establish themselves and make a buck. By embracing interoperability they open themselves up to CHOICE - something a new unknown company fears greatly. They do not have the brand recognition and consumer trust to make a go of it when other more recognizable brands are offering the same thing.

Its also funny to me that we are getting all bent out of shape over something that is almost a non-issue and extinct (almost being a relative term, it will take years). Again, as I mentioned in a previous post on free voice - transmitting voice traffic on the networks we're building today is extremely easily done. The bandwidth required is a mere pittance of what is available - with consumers paying for multi-megabit links into the home, ~25Kbps really isn't anything is it? My point is that in a short time (again, this is relative) there will be precious little money to be made in voice. As we transition away from the PSTN to the Internet the market is all but finished. Carriers need to get over this and get over it now. The voice cash cow is dead - flatline, there is no reviving it.

They are not letting it go though are they? Nor are the new broadband players. In order to make the money they all thought was out there, they continue to lock consumers into their product. Once again let me say - there is no money to be made in being a voice carrier. Not anymore. There is some money to be made in 'PBX' software and handsets, but the margins are going to get pretty thin. There is a little bit still out there during this transition from the PSTN to the Internet too, but once that transition is complete - fuhgetaboutit. We should be frustrated - the transition will take too long for most of us. But it will happen - if we exercise enough patience we'll get by.

The market will also not accept what is starting right now - hardware bound to a provider. As more and more players emerge this model will be smashed by the first company that doesn't care about consumer lock-in - those in which voice isn't their sole reason for existing. Enter the portals I spoke of in that previous post - Yahoo, Google, MSN, AOL. Just point your SIP phone to your portal and bingo - you have service. These guys should (and likely will) blow Skype, Vonage and the like right out of their vertically designed shoes.

These companies (legacy and broadband voice providers) made a big mistake in forecasting their market for services in the future and they are desperately trying to make it happen anyway - detrimental to consumer choice, but that's the way it goes. They will have to learn that's its not your fathers voice network anymore - its new, its dirt cheap, and it has killed your cash cow.

Deceased - voice carrier cash cow (Elvis has left the building). Services to be held at UCLA, eulogy delivered by Vint Cerf.

Those that think Elvis is still alive - AT&T, Verizon, etc. Suspension of disbelief - astounding.


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