VoIP Price War Declared

gardel writes "Voxilla reports that a VoIP price war was declared today. An announcement that AT&T would drop its prices for its CallVantage Service from $34.99 to $29.99 per month was followed quickly by an announcement that Vonage would drop the price on its unlimited calling plan to $25 a month from the previous $29.99. Analysts say the price cuts show the VoIP market is not only competitive, but it's serious."

3 Cheers for Free Markets

[stinerman]

Even social democrats like myself can appreciate good free-market competition like this.

If only all markets worked this way, I might be a Libertarian. . .

I'm not sure I'm the majority

[Spytap]

I'm not sure i'm the majority, but I'm really only going to care when they're making these services available in a handset that works not just inside my home, but outside in the rest of the world too. Fancy home calling services are nice and all, but I'm frankly not there that often, I need these fancy services (and higher calling quality) on the phone that sits on my hip all day wherever I go.

Re:Still about $20 too much

[DrZaius]

You're probably in the minority. My guess is that most people would prefer to have lower per minute rates than monthly rates.

I supposed the ideal would be having different packages -- the more you pay flat, the less you pay per minute..

Re:Any VoIP users?

[SpiffyMarc]

AT&T is a huge behemoth of a company, that isn't going anywhere. Vonage is a start-up.

For us, Vonage is a household name, but not for many outside this circle.

If only the cable company would follow suit...

[kasek]

I have considered vonage, because of the low international rates, but I don't want to dedicate a certain portion of my bandwidth for my telephone service. My upstream is hosed enough as it is, let alone dedicating part of it to phone use.

I would love to see a drop in prices for my cable modem service however. Since i got a cable modem 4 years ago, my bill has gone up 5 bucks. Meanwhile, new subscribers get their first 6 months at 29.95. After that, if they call to cancel, they are given another 6 months at 29.95 (I know this for fact, my dad called to cancel his account, and they offered him this deal).

Meanwhile, a 4+ year subscriber like myself calls, and says they are thinking of switching to Earthlink from Roadrunner, since it is 3 bucks cheaper a month, and they give 6 months at 29.95, they do nothing to try and keep me as a customer.

Of course they don't tell you that it is essentially the same service, since Earthlink goes through the Time Warner lines. So techinically they are not losing the customer. Which begs the question, how can Earthlink charge less per month?

On top of which, Comcast and Time Warner are working on a coop bid for the remains of adelphia, which will only damage competition even further in the cable industry. *sigh*

sorry for the mostly off topic rant, but it bugs me to see services like this that can slash prices left and right in the name of competition, and the cable companies are still firm in their prices.

Re:This is bad news...

[stinerman]

I think we can all attest to the wonderful customer service and prices that a government sanctioned localized monopoly provides.

In cases where monopolies naturally occur, a government monopoly is as good as it gets.

Energy deregulation was supposed to lower bills by adding competition to the equation. If you lived in California, prices skyrocketed due to the fact many energy producers (see Enron) were keeping production off-line in order to artifically inflate prices.

In cases like these, I like my government-granted and regulated monopolies. In cases like this (VOIP), I'm inclined to agree with you.

VoIP Price War Declared

[Anonymous Coward]

All are trying to get market share with VOIP to PSTN
and remember this is on top of broadband costs.
The future is IP to IP and none of these big
players support it. So give me an honest providers
like Pulver and Iptel who do free IP to IP first,
to arbitrary destinations and provide PSTN second
for a fee.

what value is added for $25 per month?

[Anonymous Coward]

I don't see how charging $25 per month for "phone" service can be justified much longer. You are just sending and receiving data packets over your broadband connection, which is already paid for. If you consider a phone number is a lot like a IM ID name or a email address, what's the real difference between your phone ringing and getting a IM message window popping up? One costs you $25 per month and the other lets you talk for free. Why don't we just make things that look just like a phone, ring when you get a message, and emit a dial tone when you pick them up and let you dial a number instead of a IM ID or email address? Why pay $25 for this? People think it's a great deal but that's because they are comparing it to the old phone service which costs more and charges by the minute for long distance. Compare it to how you use Yahoo messenger for example and you wonder why pay anything at all for it?

Re:3 Cheers for Free Markets

[rnd()]

All markets do work that way, it's just a matter of perspective. Markets don't naturally create a welfare state, for example.

It's kind of like gravity, you may not like it all the time, but it is a consistent phenomenon.

p.s. Markets are not a perfect way of allocating resources and capital, they are only the best way yet discovered by mankind.

This market shouldn't even exist.

[Don Tobin]

Everyone is missing the forest for the trees on this one. We already pay a fee to connect a device in our homes to a network around the world.

$25/month is $25/month too much for VoIP (when you already have a cable modem).

What is it that we want to pay for exactly? Is it that we want to rent the VoIP hardware phone? Are we insecure putting our voicemail on our PCs at home instead of a SAN at some over-hyped corp?

Stop, think, repost.

Re:3 Cheers for Free Markets

[BobPaul]

Doubtful. They don't seem to be offering any areacodes ourside of what vonage does (actually fewer in many states it looked like) so they aren't even taking advantage of their existing networks. And, since AT&T owns massive infrastructure, they will be renting most of their bandwidth from themselves at cost, rather than other companies at markup the way Vonage and others have to. There's no way AT&T has a lower profit margin than Vonage...

I think AT&T is just betting that people will pay more because they are familiar with the AT&T name, but isn't quite matching other companies deployment because they are taking VOIP cautiously and don't want to invest a whole lot until it becomes more profitable. Vonage, a startup, must invest whatever they can cause they have no other products or services to fall back on.

Re:I like price wars!

[Pastis]

Talking about Skype voice quality, I advice people to read what GnomeMeeting developers have to say about it. It's on the front page [gnomemeeting.org].