Verizon Shutting Down VoIP Service

6 Comments

[qi:090] Five years after it launched Voicewing by rebranding DeltaThree, Verizon (s VZ) is shutting down the VoIP service that never managed to get any traction. It was launched to compete with Vonage. AT&T (s t) stopped signing up new customers for CallVantage, another Vonage competitor, in 2008. Voicewing will be shut down on March 31, and will most likely be replaced by FiOS Digital Voice, a new offering. The decision will almost certainly push DeltaThree over the edge — the company has been running out of cash and has already been delisted from Nasdaq.

6 Comments

Jen

I heard about verizon shutting down this portion of their enterprise. Which is surprising because of the credibility Verizon posses, you would think they would be able to compete with Vonage. Voipreview.org has more information under the "business" section on verizon moving on.

Jesse Kopelman

@prashant

This has nothing to do with technology and everything to do with the fact that voice by itself is not a profitable service. The only exception is international calling and that is a relatively small market and one in which there is a ton of competition (where VOIP is prevalent as an underlying technology). For domestic calling, VOIP is a tough sell thanks to the rise of mobile phones. Because of the closed nature of the mobile phone networks and their limited capability in terms of data QOS it is almost impossible for paid VOIP to break into that market and that is a market you need to be in to be a viable telephony provider.

Depending on the state of network neutrality by then, 4G may allow VOIP-based 3rd party providers to break into the mobile market, but again they would really only be competing for the international calling market. The end result is that incumbents are forced to drop prices and new entrants are driven out of business. The only way around this would by forced separation of retail service provider and network operator via regulation — a good idea, I think.

prashant

Hey,

I am student of telecommunication and obviously I am looking for better future in Networking and VoIP technology. Do u think Verizon closing this VoIP service because its not worthwhile technology. Are you looking better future for this technology. Right now i am taking IP telephony.

Om Malik

Mike

I am not sure if this has any impact on Vonage. I think they are in a bad place right now and clearly need to do something to get something going. Voicewing was so marginal – like a drop in a bucket in the VoIP world and no one is going to miss them.

Mike

Om, how does this affect Vonage? Do you think this turn of events will help VG survive, especially given their cash situation?

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