VOIP etc > Voice Over IP - VOIP > VOIP Tech Chat > What is the biggest threat to small VoIP service providers?

What is the biggest threat to small VoIP service providers?

Your 8 points summed it up pretty well.

reply to macman4hire
I think that the main danger is the internet phone services provided by the cable providers and ISP's (Comcast, Cox, TW, Optimum/Cablevision, and also Verizon FiOS and ATT U-Verse).

The cable company triple plays are hard to beat, and the advantage of one-stop shopping, ease of setup, etc.

The population out there does not know that independent Voip providers can offer more features and more flexibility at competitive prices.

How can companies like CallCentric, Voip.MS, F9, etc., penetrate the American/Canadian psyche? They certainly don't have the money to burn on advertising.

PX I agree a bundle service like triple play is indeed hard to beat. If you combine that with net throttling of the competition it spells a disastrous formula the independent VoIP providers. The cable providers you mentioned could argue that they have the right to ensure that they have superior service to their costumers by setting aside a significant portion of the network bandwidth for their services(VoIP, Video, ect.) on their networks. This is why we must all protect net neutrality and guard against monopolistic business practices. Just for clarification purposes I do support the right for the cable providers to bundle their services, just not giving them the ability of net throttling the competition so they appear inferior in quality.

reply to macman4hire
Cable companies triple play last for 1 year, then the price goes up.
I had optimum voice for 1 year, then dropped it. I found the features to be very lacking. I guess it comes down to personal preference.

reply to macman4hire
I think a big issue affecting VoIP's success is some of the VoIP providers themselves.

I'm certainly not referring to any of the well-regarded providers here, so let me explain. A great deal of providers advertise VoIP as a drop-in replacement for a POTS line. It's not. At a minimum, you need to know that your internet connection is stable, has low packet loss and has little jitter. If the provider is BYOD, you need to spend some time learning how to set up your ATA, and if your ATA doesn't come with a good QoS router, you need to get one of those. You can't just expect to go out to the store, buy an ATA, plug it in, and all of a sudden have perfect audio quality and reliability at a fraction of the cost of a POTS line, but people do.

The other thing is that there are a great deal of fly-by-night VoIP providers run by people who figured out how to install Asterisk and call themselves a VoIP provider. They don't know how to troubleshoot issues that come up. Often, their service quickly develops capacity-related problems. I used my share of these providers before finding this forum.

The bottom line is: with VoIP technology and SIP trunking so affordable these days, it is not hard for your average Joe to start up a VoIP business. That does not mean however that your average Joe should!

m.
--
Mango's recommended PAP2T settings: »www.toao.net/25/linksys-pap2t-vo···-review/
Linksys/Cisco dial plan tips and tricks: »www.toao.net/108/cisco-dial-plan···-tricks/

reply to macman4hire
I suspect government regulation and taxation will be more harmful to small VOIP providers in the long term than anything else.

I read a flap in New Jersey about Verizon and telephone pole taxation. If I understand the Verizon proposed solution correctly they want the state to tax all providers, including VOIP providers for physical telephone poles, wires, and internet / phone infrastructure. The proposal is to pro-rate based on subscriber base per company.

Is Future-Nine prepared to send out tax payments to dozens, potentially to thousands of municipal governments every year? On startup Future-Nine didn't offer E911, what will happen if or when that is no longer an option for a new VOIP provider?

Will small VOIP companies have to provide access to their servers so homeland security can monitor / tap calls?

Eventually regulation and taxation are the greatest dangers small VOIP providers face.
--
"People demand freedom of speech as a compensation for the freedom of thought which they seldom use."

reply to macman4hire

reply to macman4hire
IMHO, other companies (Ooma, MagicJack, Google Voice, etc.) are not a threat to small VoIP companies. Those companies do not have a profitable model long term which means they'll either have to raise their prices in the future - or go bankrupt. Either way they only have a very limited lifespan under their current so-called disruptive model. It's just a matter of time before they no longer pose a threat to anything in my opinion.

As evidenced by both Verizon and AT&T pulling out of the VoIP market - the market is simply not lucrative enough for major corporations to succeed in it. This isn't wireless where competition is limited to a few companies offering the same thing. They actually have to compete and the larger the corporation - the harder it is to compete and actually make money.

Cellphone carriers lowering their prices may affect the market a little, but it's unlikely that cell will ever reach the price levels of VoIP - so there'll still be room for VoIP providers in there.

The two factors that can and will affect VoIP in the long run if they happen:
1. ISPs sabotaging connections to independent VoIP providers because they compete with their own product.
2. Governments enforcing taxes and fees on VoIP providers on a large scale.

nitzan,

I agree, but unfortunately would not under estimate the power of the telecom and cable industries lobbyists to demand that all providers are taxed at similar rate. These lobbyists will demand that the playing field be equal in regards to taxation. It is just a matter of time before our good old uncle demands his cut from every provider in this era of big government.

I also agree that net neutrality is a paramount issue facing small independent VoIP service providers. Anti competitive business such net throttling and deliberate sabotaging to make competitors services appear inferior should not be tolerated. I believe that all internet users should be vigilante in observing our politicians attitudes on such an important matter. Our legislators should ensure the internet fosters fair competition and open innovation.

reply to macman4hire
Another "threat" is the limited customer pool. Most non-technical folk I talk to roll their eyes when I mention VoIP. It doesn't matter if it's 'plug n play'; they don't understand it, they can't deal with it, and no matter what the price, they don't trust it. Without a sufficient number of customers, no VoIP could succeed.

reply to Lenagainster
I agree with a lot that is stated here but I want to point out that one of the biggest contributing reasons many closed their doors was caused by fraud.

Even SR would have survived longer if they weren't stuck paying out huge amounts of $ caused by fraud.

reply to PX Eliezer

quote:

---

We may not like Vonage, Skype, or cable company phone service, BUT it at least introduces the idea to people.

---

reply to macman4hire
IMHO the smaller providers are the most likely to survive. Those that don't try to be multi-million line behemoths, that add so much overhead to their cost structure, will do well.

Independent VOIP will always be a niche product. My son just moved out on his own and has zero interest in a land line, even a voip line. His cell >IS his telephone. And yes, he's as tech savvy as anyone (works in network and general IT security).

While independent VOIP will be a niche, it will be a lucrative niche for those providers who tailor service to fit it and who don't think EVERYONE needs it. Keeping prices competitive, leading on features and reliability will be key to success. Big marketing budgets and unrealistic expectations will kill them.

reply to voiplover

reply to voiplover

Although the current crooks know all the tricks, we don't want to give any ideas to newbie crooks!

I am sure that the providers are in touch with each other on these issues.

reply to macman4hire
I think another area is features. Anyone can put together a voip company and start selling accounts, but how many threads have been here about this feature or that, and which company offers it and who is about to?

I've started using my Google Voice account with my cell phone to make very cheap international calls. I call my GV number, enter a pin, dial the international number I want to call (usually Japan) and the call is connected. At 3c/min, it is very cheap and easy to use with my cell. With my rollover minutes using ATT (about 1500), I'm not worried about my cellular airtime. No ATA/Internet/configuration issues here - easy to make the call. Now, my Tokyo DID comes straight to my cell phone - so there isn't much of a need for any SIP devices at home anymore.