When investing into the voip market, you or your business are more so buying into a service, rather than an individual product. Although products such has phones, network cables, and other voip devices are sold buy these companies, their main focus is signing you up for one of their services. Part of the VOIP market is understanding who is the user of their services. Companies such as Vonage and AT&T look at customers in three different categories: Residential users, small business, and enterprise.
So what does Vonage and other voip companies have to offer? Why would someone choose an internet based form of communication rather than keeping their simple, easy to use pre setup phone service? The answer lies in the costs. Vonage, Comcast, AT&T and other companies providing Voip service, all boast about the cheap costs of voice over ip networks. When the craze first came out, media coverage such as this news report, evaluate the efficiency and economic gain of Voip services. People claimed that their phone services were instantly cut in half when switching over.
The goal of the newly formed Voip companies and enterprise markets, was to pull loyal customers from Verizon, Sprint, TMobile, and other regular phone service users, over to the new, appealing broadband networks. As many home owners of frequent phone use were finding themselves with bills of $100 to $150 a month, Voip technology could not have come out at a better time.
Skype
Skype is a software program that allows users to make calls over the internet to landlines and cell phones for a fee and calls over the internet to other Skype users for free. Skype offers its users instant messaging, file transfer, short message service, video conferencing and the ability to elude firewalls. People who want to save money on their phone bill will want to use Skype, especially if they are in touch with other Skype users, because those calls are free. Also people who want their internet and phone bill combined as one will want to use Skype. Skype makes money because they offer a cheaper way to call people, taking business away from other phone companies. Skype makes money when people initially sign up for service, but then charges only a small fee to continue use and make calls. Skype makes money with their volume of users, but then does not make enough money for people to ocntinue using VoIP as they would traditional phone service.
Vonage
Currently struggling to hold on to their loyal customers they are now trying to fix faults but boasting new and improved customer service, something people had complained about in the past. The company has 2.5 million subscriber lines and can offer a variety of features including unlimited calling plans providing a similar experience to traditional telephone lines often for much lower then a traditional phone line. For people that utilize many phone calls especially small businesses this can be a great relief to only deal with a flat monthly rate. They have surpassed 5 billion calls placed on their network, and only now have fallen behind Comcast with number of subscribers.
AT&T
AT&T has been around since 1885, so as a well established name in it's several industries, customer acquisition is not as difficult as it would be for new or growing businesses. Although AT&T and a few other big time networking companies were late on board the voip hype, they did not have a tough time catching up. Most of AT&T's voip service members were just customers from the regular phone line service, looking to save a little extra money each month using broadband communication. Their voip service, called AT&T Call Vantage, has features such as parental control, video capabilities, and free long distance calling (with certain packages). They also boast an east setup, clearer phone calls, and comparable monthly fees, much cheaper than the old fashion analog phone services.
The Problem with VOIP
According to a Kevin O'Brien article in the New York Times, an entrepeneur for a bust company Challenger, says that there are just not enough buyers willing to trade in their old analog phone systems for VOIP. Many claim that it is due to, "customer indifference" and an underdeveloped technology. Both these factors and several others key issues when considering the VOIP business model, which the article also states a researcher from Infocom feels is failing in todays market.