Verizon dangles cheap VoIP for US land grab

Data freedom

The cable companies have never been likely to go after phone service outside the scope of their cabled regions because of their comparative weakness in phone services. It is bad enough trying to get consumers to see them as a phone company in their own region, never mind outside it. But for Verizon, the biggest of the phone companies, and AT&T, it is less of an issue.

Back in December Qwest began the task of offering VoIP with a first phase to customers in Minneapolis-St. Paul, Minnesota. Qwest said at the time that it was the first major telecommunications provider to offer VoIP services to residential customers.

The move was followed in April by a promise that it would not charge independent VoIP companies more than carriage charges (no access charges) when the VoIP traffic emerges into its PSTN telephone network.

Qwest is thought to be on the verge of offering a similar US-wide VoIP phone service, and both SBC and Bellsouth cannot be far behind with SBC stating that it clearly plans to offer such a service, while Bellsouth seems to be concentrating on pushing long distance unlimited calls to around $15 a month, instead. But both will have to respond the moment they see any kind of incursion into their territory.

Data freedom

So far VoIP services have suffered bad PR, with a history of poor quality and reliability issues and worries that when there is a powe routage, the phone stops working. That hangs a heavy question mark over getting rid of a traditionally connected telephone line, which is needed for calling the emergency services, especially when power is down.

But increasingly customers have either a second line, which they use for most services, and that can be VoIP, or they rely on their mobile phones for emergency calls, as long as mobile coverage is sufficient.

One of the beauties (and dangers) of VoIP is that the customer can split the signal and route it within the home however they want, to multiple phones and into PCs. But at the same time they become responsible for moving phones around and sorting out internal cabling.

As the networked home becomes more of a reality, this type of data freedom is an asset and IP operated services are likely to become standard anyway.

So alongside ARPU, a new statistic is going to become fundamental to the valuation and analysis of telcos, the number of accounts that it holds “outside its network,” with Verizon getting this number off the ground first.

The Verizon VoiceWing service comes with a number of VoIP advantages already built into it, and being a data service, this is likely to become a new platform for independents to offer software based services controlled by PCs

VoiceWing allows customers to choose a phone number from any Verizon territory in 33 states and call management facilities from any computer with Internet access regardless of where it is. The service also offers enhanced call-forwarding and call logs that itemize all calling activity and there is a three month sign up period in order to qualify for the six months discount.

Mass drive

VoiceWing offers voice mail, caller ID and call waiting, Click-to- Dial, PC based Address Book, speed dial, call scheduling, and a neat trick called Alternate Telephone Number, whereby anyone calling your home frequently can call you on an alternate number which is number local to them, and drop into the Internet at a gateway near them and have the call routed to your home. So savings are passed onto Family and Friends.

VoiceWing users will plug their phones into a book-sized adapter and connect that to any broadband Internet connection, not just the one they have in their home. When traveling, they can attach it to any conventional phone with a broadband connection, much the same as the BT IP telephony service launched last week in the UK.

VoiceWing has a one-time set-up fee of $39.95, and a one-time shipping and handling charge for shipping the adapter.

The fact that VoiceWing is provided by Verizon Long Distance, sees it very much as a replacement to long distance dialing for some. Verizon has 16.6 million long distance customers but each of them would need a DSL line to qualify, and that could mean a mass drive towards DSL, which would help it overtake SBC as the top telco and Comcast as the number one broadband supplier in the country.

Given that DSL at $29.95 plus the VoIP at the same price, this would mean that a Verizon customer could achieve unlimited US calling plus high speed internet for $59.90 a month, the same price that Cablevision is citing for those two elements in its triple play pricing.

But that will just leave the fact that Verizon doesn’t offer TV service delivery to complete the triple play at a price in line with Cablevision. Or does it?

Next page: Question of timing



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