No Future for Pure Play VoIP Companies

In a new article published on xchange magazine’s xchange online by Kelly Teal, the dire situation of many VoIP companies.

For one thing, the expense of VoIP itself has set back companies that are trying to compete with the big telco voice companies out there. –particularly those offering multiple service packages.

In his article Kelly quotes two telecom industry analysts:

“I don’t see how far it can go — there is no future,” Stéphane Téral, principal analyst for Infonetics Research, says of the VoIP pure-play model. “They really need to come up with something new that has nothing to do anymore with who they were in the past.”

Sally Cohen, an analyst who covers consumer VoIP and broadband for Forrester Research, says consumers are not really interested in a pure-play solution. Despite the mountains of money Vonage has spent on advertising to evangelize VoIP services to the nation, Cohen’s recently released report, “VoIP Marketers: Price And Features Slowly Win Over Consumers,” finds 3 percent of online consumers in 2004 paid for pure-play VoIP and that’s only risen two percentage points since then. That slow growth illustrates Cohen’s opinion that Vonage is “marketing to a disinterested public.”

Though Kelly seems to think that Vonage understands the cons of pure play, quoting a Vonage spokesperson about the dual-mode phone to be released by the year’s end, many people feel that a new phone model isn’t going to do much when the problem is maketing to a disunterested public.