Blog Post

Vonage’s Tough Road Ahead

Just a quick update on the competition between old-school telecom and upstarts like VoIP provider Vonage: Last week, AT&T announced its Unity pricing scheme, which cuts some roaming and per-minute costs for people who subscribe to both its wireless and wireline offerings. According to the company, which advertised the service heavily during Sunday’s NFL championship games, Unity potentially addresses a network of 100 million phone numbers.

Monday, Vonage countered by announcing its new V-Access service, a Rebtel-like plan which will give users EarthLink-type local access numbers to circumvent some long-distance or international roaming fees. To make the Vonage service work, you need Internet access (to find the numbers on the Vonage web site), then you need to dial the local number, then dial another number. Sound easy? Easier than Skype? Or easier than just keeping your AT&T service?

8 Responses to “Vonage’s Tough Road Ahead”

  1. I also agree with others here that Vonage and others such providers will have very tough time competing with established players.

    I think faith of Vonage will be similar to many dsl service providers which went out of business during 2000-2003.

  2. Ron Mahabir

    Given the tremendous cost of acquisition per subscriber, churn, and free-fall in prices, start-ups like Vonage will have a tough time competing against established players like AT&T. It will be interesting to see if they make it alone (doubtful).

  3. Sandeep Sahai

    Let’s not get into writing about deadth of VOIP…
    If you turn over pages of history in telecom domain then it is very evident that Telecom price came down only when VOIP service provider came and offered unlimited calls.

    Now, I am not saying that if VOIP service provier where not present than prices wouldn’t had came down, but I am trying to put forth the idea that it was becase of VOIP that the telecom price came down.

    What I feel is that plan will not change anything as such. Market is filled with plans like this
    Sprint,Alltel, T-Mobile all these provider has similar plan and that too for a long time.
    Still VOIP customer base is increasing.

    Bottom line, plan such as this one is not a VOIP killer plan