It’s the Technology, Stupid

Cable giant Comcast’s announcement today that it has hit the 1 million mark in “digital voice” customer subscribers won’t be construed as good news by the hundreds of “single-play” service providers that used to view Vonage and its $300 per customer marketing campaign as the New York Yankees (or Manchester United for you fans of real sport) of VoIP.

At first glance, it appears that yet another deep-pocketed entrant is trying to scoop up customers by spending millions in marketing — a hard act to compete against.

Perhaps, though, there’s a different way to view Comcast’s self-professed success, a way that shakes smaller VoIP players out of the no-win hole they have inadvertently dug for themselves.

The key is actually right in the Comcast marketing message, which I have now probably heard on the 24-hour news station my car radio appears to be stuck on about a thousand times. The message is simple: cable TV, internet access and unlimited telephone calls bundled together at $33 per service. The pitch is, of course, the technology (in the form of bundling), not the price.

There are plenty of players out there offering unlimited phone calls for about $20 a month, and they are having a tough time picking up more than a handful of new subscribers a week. Comcast is getting thousands and openly advertising a 65 percent price premium.

Is there something to be learned from this? Of course: technology trumps price.

And when it comes to technology, the smaller VoIP providers have a huge advantage over slow-moving dinosaurs like Comcast.

Unfortunately, it’s an advantage they don’t use out of misplaced fear.

Go to any of the established VoIP providers’ web pages and you’ll see they all say the same thing: “Save money.”

Go to the Cingular and Verizon pages and you’ll see a different message: “Get the latest toy.”

There are plenty of amazing toys for VoIP coming out daily, but you would never know it by hanging out on Vonage’s, BroadVoice or SunRocket’s pages. They try to sell you on price, which is a sure-loser of a tactic in a race to zero against wealthier foes.

To make matters worse, many of today’s smaller providers do everything in their power to discourage use of anything but the functionally limited analog device they send out to new customers. Use their device, hook up an old telephone to it, and that’s it. Don’t try to use your snazzy new WiFi phone, or, worse, connect to the service through powerful PBXes such as Asterisk or Communigate Pro. They don’t support it and are so paranoid of people actually using their service to make more than the average number of calls, they won’t even give you the basic information required to make it work.

When Jeff Pulver’s FWD service first started gaining traction (well before the kings of software and music piracy at Kazaa “invented” Skype as a proprietary FWD clone), the possibilities for VoIP seemed endless. Pulver envisioned a communications future shaped by innovation, creativity and community. Unfortunately, the service providers did everything in their power to stifle the fast-moving status-quo disrupting world Pulver and his band of early pioneers were helping to create.

Innovation? Too hard to support. Creativity? Takes too much time. Community? Where’s the money in that?

Now, if they want to survive, service providers need to go back to the pioneering ways. A major change in direction is in order. Stop packaging VoIP service as something that will save customers pennies a day and works exactly like their old phone does. The new approach needs to encourage the use of VoIP because it is infinitely more powerful than what we’ve used for 100 years.

We’ll use your service, we’ll even pay a bit more for it. But let us use it in the way we choose, with the device (or, even, multiple devices) we choose. New hardware or software comes on the market? Jump on it, don’t run away from it.

There’s a world of people out there ready to embrace change. This world’s the future of VoIP. And unless today’s service providers become part of it and soon, it will be Comcast’s world to rule.


  1. f_hirschler says:

    Of course it’s the technology.

    But even if the league of ITSPs dramatically change the focus of their
    marketing speech, I think that VoIP , as a “pure voice service”, will be in the hands of the ISPs.

    For them it is an additional service and not the main product. And they have a deep pocket.

    But. There are a few buts.
    a) ISPs are geographically limited. ITSPs aren’t.
    b) in future, when fixed, mobile, AND VoIP “pure voice” rates converge, VoIP related services will be the consumers’ attraction.

    In my view, these related original services – like Grand Central – will be licenced to ISPs. The latter will succeed in keeping the direct relationship (through their pipes) to the end customers.


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