Lessons to be Learned on VoIP
January 1, 2008
1. The VoIP market has been very competitive over the last couple of years and margins have been low. VoIP service provider’s have spent a lot of money on advertising and promotions in order to build a large customer base in order to reach critical mass and reap large profits in the future. This strategy does not always work and it tends to favor the large well financed companies. There will continue to be a consolidation in the industry as weaker players continue to fail and larger, well financed companies continue to gain market share.
2. A consumer should be careful when they choose a VoIP Service provider. Maybe it is not a good idea to prepay for a long period of time in order to get dirt cheap service today This may actually be a sign of financial weakness because a company offers these deals in order to improve short term cash flow.
3. The same can be said for all prepaid services. It is a good idea to not pay them to far in advance unless you know the financial condition of the company.
Remember, even large well capatalized companies can fail. Remeber Enron? Could this happen to Vonage? Of course it could. One thing is certain, there will be more surprises in this industry in the future. There are simply too many players and the VoIP industry needs to consolidate