Re-thinking the home phone's re-invention

It has been just over a month since Verizon launched its Verizon Wireless Hub VoIP system, the latest "re-invention of the home phone" that follows like-minded efforts by AT&T and others. The initial reviews of the Hub seem to be mostly good, with reviewers liking the simple set-up and the rich functionality.

Negative comments have been reserved for the price ($250 for the device, $35 per month for service with a two-year minimum contract and a $175 break-up fee). Also, at least one review I read mentioned a desire for even more Internet functionality, perhaps to make the device more of a PC replacement.

I haven't tried the Hub, but I'm seriously thinking getting one. I'm already a Verizon Wireless user, and I like the fact that the national wireless player actually made this product available nationally, rather than using it only as a landline customer retention tool in specific, limited market roll-outs. AT&T reportedly has been a bit more stingy with its HomeManager product.

But, the biggest thing that still makes me pause before signing up is that price. Telcos may be trying to re-invent the home phone, but the Hub is proof that the re-invention has not yet extended to their pricing philosophies. They should have learned by now from the success of VoIP and wireless that re-thinking the home phone means re-thinking device and service pricing.

If telcos want to offer the new home phone devices for more than $200--as if it were a high-end mobile phone--and monthly service for $35, they could be in danger of losing a price war to a bunch of companies, including themselves. And if they plan to stick with these prices, they may indeed want to add much more Internet and video functionality--capabilities that might go further to make "re-invention" worth the same old pricing inflexibility we have come to expect from telcos.

-Dan

For more:
- Newsday has an Associated Press review of the Hub

Related articles
AT&T launched HomeManager last year
Verizon talked up the Hub prior to launch

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