I keep waiting for the other shoe to drop in a consumer VoIP sector that has been faced with many legal, regulatory and competitive battles. In this case, the other shoe is the rather giant one worn by the largest U.S. telephone companies, who all have the capability, but have never really pursued consumer VoIP with any kind of focused energy or interest. I thought that shoe would drop in late 2007 or early 2008, soon after the first one landed with a thud in the form of rampant bankruptcies among VoIP firms and telco patent lawsuits against Vonage. That period presented a nice opportunity for the telcos to drop some aggressive marketing of their own VoIP services on the weakened market, but it never happened.
Even in the ensuing months as landline losses have become consistent enough to set your quarterly watch by, the big telcos have shown incredible discipline and restraint in not helping consumers make the connection to their VoIP services. In some cases, they just continue to tie special service offers to a landline subscription, as Verizon just did with its NFL Sunday Ticket offer.
When the big telcos do have some success with VoIP, it seems to come as a mild surprise. That's the tone that AT&T had recently when it noted that two-thirds of the customers who sign up for U-verse TV also take U-verse voice. The telcos seem content to let the landline business convulse, while their broad service bundles gradually gain traction and they wait for the VoIP market to reach some imaginary threshold they might think it still needs to cross. Maybe they can afford to do that, but why let all the spoils go to the consumer VoIP brand names like Vonage and Skype, and the cable TV companies who continue to stack up hundreds of thousands of VoIP subscribers every quarter (many of them probably coming from telcos)?
Interestingly, the players that are doing well in the VoIP market aren't looking all that well overall. Vonage just earned its first-ever profit, but it came via cost-cutting while Vonage actually lost 90,000 subscribers. Skype continues to be a global success story headed for an IPO, but a potential legal battle over patents has clouded its future somewhat. And, the cable TV companies are starting to acknowledge they are in for a long hard battle against telcos in the video market.
Maybe succeeding at VoIP isn't enough alone. But, that's exactly why the telcos finally should throw every bit of energy they can muster into succeeding with VoIP. If they can show they really have the best VoIP and the best service bundles, they can starve the competition, rather than feeding them.