VoIP at Retail: Ma Bell Beware

by Ted Wallingford

Related link: http://www.tmcnet.com/tmcnet/articles/2004/082304jt2.htm

The other day I was talking with a Qwest technical sales guy, and I was picking his brain about VPN and Qwest's upcoming Voice over IP service offering, tentatively called "OneFlex". It looks great; it's got all the things the big Bells said VoIP would die without: Quality of Service, customer-managed dialing plans, and everybody's favorite IP phone, the Cisco 7960.

So what's missing?

Well, frankly--the value is missing. With Vonage selling their $20/month service at Radio Shack and companies like Packet8 and VoicePulse selling broadband phone service for a fraction of the price Qwest intends, I found myself wondering how Qwest plans to compete. Compound that with the fact that Qwest forces you to have their T1 internet access service in order to use their VoIP, and the value proposition falls just fizzles.

At the same time, AT&T's CallVantage is going to be sold at Best Buy, but even this much-vaunted service doesn't offer the below-20-bucks value appeal of VoicePulse. Will this mean the big players like AT&T and Qwest will lose out in the VoIP business, or will the new kids on the block begin to increase their prices?

Do you think the $20/month price point of VoIP-only providers is enough to pull people away from Ma Bell permanently?