Tom Keating recently talked about how to pure VOIP providers like Vonage stack up against the cable and telco companies offering broadband Internet VOIP phone services.

In the article he compares pure VOIP providers like Vonage and Packet8 to telecos and cable companies like Verizon and Time Warner. What do consumers really want? Is cost always the bottom line or are people looking for brand trust, quality of service and reliability over the long haul? His assessment may surprise you.

Click here to read the complete article on his blog.

Who is Tom Keating? He owns the VOIP and Gadgets Blog and is CTO, VP and founder of TMC Labs, one of the leading sources for unbiased opinions and reviews in the VoIP, call center, datacom/telecom industries.

 

Andy takes some time walking us through why many great tech ideas fail. Know thy customer is the mantra here. Walk a day in their shoes.

I’ve worked for many companies in high tech where honestly the idea of actually talking to the customer was just too big or too complicated a prospect. Yes, lipservice was paid to market research, but for some reason it’s way easier to analyze a bunch of pie charts than talk one on one with the people you’re building for. 

I don’t know why this is so hard for companies to get right. Research is expensive which certainly has a lot to do with it, but I’ll say there is other deep rooted psychological trauma going on as well.

I mean, if you start talking with customers, they’ll start wanting stuff. These people are demanding! They want things done better, faster, simpler, more buttons, less buttons. They’re never satisfied. Don’t they understand what you’re trying to do? That the underlying technology of the thing is flat out amazing? So forget it, you just can’t talk to the customer because they’re high maintenance and don’t know what they need anyway. But we the Company do, and that’s what we’ll build.

Pause.

Okay, that got a little chippy. So I’ll conclude by saying that companies with the best of intentions can get lost in their own story. You still need to have the story, a damn good one, but you also need the wherewithall to put a great book in someone’s hands and have them read it.

Dan Rosenbaum of FierceVOIP has posted his choices for best of breed for 2006, the “Fierce 15″. He casts a wide net, including infrastructure, enterprise and consumer VOIP solutions in his list. A few companies I recognize, many I don’t. Folks with important end-user applications or services of note include: iotum, Jajah, GrandCentral, SunRocket, SIPPhone (GizmoProject). To be considered “fierce”, he says companies have to explain themselves and their products clearly, without geekspeak. In many cases it was difficult looking past the sizzle to find the meat. I couldn’t agree more. Have a read. Agree or disagree!

Is VOIP a generational thing? When I told my parents about my great scheme to use VOIP for my business line and long distance calling, Mom gave me that worried look that says “Are you sure that’s not illegal?” You should try it, I cry! Vonage, my service of choice at the time, was only $19.95 a month. A simple calculation on my phone bill told me I was spending more that that on long distance every month, so it seemed a no brainer.

Then Dad says, why don’t you just use 10-10-YAK? Only 5 cents a minute.

That’s what my parents use. YAK is a dial-around service you can use for long distance calling. The charges appear on your regular phone bill so there’s no subscriber contract to deal with.

But Dad (I’m deflated now), YAK isn’t VOIP, and VOIP is COOL. VOIP is the WAVE of the FUTURE…OK well whatever.

Now I don’t know if it’s just my parents, but the idea of only paying for what they use on a regular old telephone makes total sense to them. Hooking up a Vonage phone adaptor to their PC and broadband modem to make phone calls does not.

But my Dad did get me thinking about this question of unlimited calling vs. pay as you go. If you ask the folks at SIPphone Gizmo Project, they’ll say that unlimited plans won’t save you money. Only paying for minutes you actually use will.

“A calling plan that involves unlimited calling is almost never in the best interests of the consumer. When you just pay for what you consume, you end up paying far less.”

It grieves me, but lets do the math. At 5 cents a minute, I would have to spend about 400 minutes calling long distance calls (6 1/2 hours) to break even with my $20 plus tax Vonage charges for unlimited calling. I spend way less than 400 minutes a month talking long distance, so (a) I was paying way to much at my telco before for long distance, and (b) I can do way better than Vonage.

Most VOIP long distance rates are around 2 cents a minute or less, so for me paying as I go makes sense (400 minutes at 2 cents/minute is $8)!

 

I saw a post yesterday on the Motley Fool called “Avoid the VOIP Value Trap“. It’s reader is the investor looking for the “next home run stock”. The gist of writer Dave Mok is to avoid investing in VOIP like the plague. “Internet telephony is a novel application that leverages existing infrastructure to deliver comparable services at lower prices. Technological developments like this can help companies improve margins and offer better value to consumers, but they don’t necessarily create substantial new value worthy of investment.”

Hey, well he may be right. I’m not an investor so I don’t know if this is news or not (I suspect not). Consumer value just can’t get no respect…Well I think there’s more to VOIP than Vonage–that is to say there’s more to VOIP than just cheap phone calls.

With all the hubub around Vonage and other national VOIP phone companies like them, I sometimes slide into the trap of thinking VOIP is all and only about saving money, unlimited long distance plans, and the like. And of course it’s not. I was reminded of a conversation I had in December with Talkster CEO James Wanless who called the “race to zero” a lousy business model. The fact is there are many new ventures using VOIP as a platform to offer services that traditional phone companies can’t. Look at Jangl offering phone privacy for social networking sites. Look at TalkPlus with a second number for your cell phone. Look at iotum TalkNow for Blackberry users. MobileStick from Bridgeport Networks, SightSpeed video calling, GrandCentral, PhoneGnome, Fring, Jajah, Gizmo, Truphone…the list is getting longer by the day. To say that “VoIP offers no new killer applications or buzzworthy innovations” is a little harsh. Investor value? No idea. Consumer value? You bet.

I’ve had such a great response to my earlier post, VOIP Services for Canadians, I thought it worthwhile posting again with a number of additions.

All these companies offer Canadian area codes. Some are US companies so you pay in US dollars. Testimonials (good or bad) about any of these folks are welcome:

http://www.unlimitel.ca/
www.callcentric.com/
http://www.voxbone.com/
http://www.vbuzzer.com/
www.broadvoxdirect.com/
http://www.hip.ca/
http://www.internationalnumber.com/
http://www.atlasvoice.com/
http://www.inphonex.com/
http://www.les.net/
http://www.iax.cc/
http://www.axvoice.com/
http://www.ravon.ca/
http://www.iristel.ca/
http://www.netfone.ca/
http://www.nuovotel.com/
http://www.savytel.ca/

With so many companies assembling at the starting line for the race to mobile VOIP world domination, I wonder if we’re seeing a hurry-up-and-wait sort of thing. On the VOIP Service Blog read about mobile VOIP in a nutshell.

If you are really looking for the best deals in residential VOIP services, look at providers with annual subscription rates. Most VOIP providers only offer monthly plans. Vonage for example is currently offering $24.99 per month for its basic unlimited service (free unlimited calling to anywhere in NA and Europe).

But as a way to reward and attract customers, VOIP companies are adopting what cell phone companies have been doing for years: offering the latest and greatest gear for free in return for long term committment. 

SunRocket markets a similar package at $24.95 per month or an annual subscription at $199 per year. That works out to about $17 a month. So if you can handle prepaying for your service by the year instead of by the month, then an annual package is a good idea.

Packet8 has also recently adopted the annual package deal. For a flat rate of $199 per year, you get get unlimited calling within North Americal, calling features like voicemail and call waiting and a 100% discount on a Packet-8 enabled UIP1868P 5.8-GHz digital cordless phone system, which can be extended to work with multiple cordless handsets.

From: www.quickstartvoip.com

Free Internet phone service lets you to make free long distance calls over the Internet in three different flavors. The first enables you to make calls from one phone to another as long as both are connected to broadband lines. The second allows you to make calls from one computer to another and the third makes calls possible from a computer to a traditional phone.

But, there are limitations to free services. Let’s take a look.

Phone-to-phone service providers require that you purchase their telephone adaptor (or ATA). As long as you are calling other people who have purchased the same equipment, the call is free. PhoneGnome is one such service. The PhoneGnome adaptor costs about $119. You literally plug it in to your broadband connection and to your regular phone, it configures itself, and you are good to go. You can start calling other PhoneGnome users anywhere for free. You don’t have to switch phone numbers or change telephone companies. Vonage, Packet8, AT&T CallVantage, and others you may have heard of follow the same model.

PC-to-PC service providers allow users to make free calls from one PC to another. Both parties need a PC with an Internet connection and some software easily downloaded from the Net. However, for a call to ring through, both parties have to be online at the same time and have the same, or at least compatible, software. By adding voicemail to a PC-to-PC service though, callers can leave messages even when you’re not online. Unfortunately, voicemail may or may not be free.  Skype, Gizmo Project, and FWD are three typical PC-to-PC services.

PC-to-phone services let you to call a regular phone numbers for free. However, you may be restricted to the locations that you can call or the length of the call. VoipBuster, for example, provides free calls from your PC to landline phones in about 30 countries. The restrictions are a little bit complex, but free is free…Lucky for us, the bigger software-based phone companies are trying hard to entice users so there’s also a current wave of promotions trumpeting free calls to landline phones. Skype for example offers free calls to any phone within North America until the end of the year. Gizmo offers free calls to phones in 60 countries as long as both parties maintain an active Gizmo Project account.

In all of these cases, free Internet telephone services make money by selling credits for calling minutes to landline phones or mobiles, long distance destinations, or phone numbers not on the same VOIP service. Rates are low, however, and you can expect to save significantly over traditional long distance companies. For regular phone users to call you on your free Internet phone account, you must “buy” or subscribe to a conventional phone number. Most services allow you to buy a phone number in different locations, so if your family is in the UK and wants to phone you regularly, you can buy a local UK number that they can call for free or inexpensively.

Andy posts long and loud on AT&T’s new Unity Plan: unlimited free calling between AT&T mobile and landline customers for a fixed price per month.  While the plan excludes mobile roaming, international calling, and CallVantage services (the AT&T VoIP offering), he thinks they will be blended into the mix soon enough. This should prove troubling for companies like Vonage. In fact, why use Vonage when I can have unlimited mobile AND landline calling for a fixed price on one monthly bill?