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Do consumers want free calls?

by Luca Filigheddu on June 11, 2007



Do consumers want free calls?

The answer is definitely YES, consumers do love free calls. As soon as someone launches a new free-calls offering, people take maximum advantage from it, squeezing that offering until the last free minute available.

In general, anyone loves the word FREE. It’s something I have already stated many times in this blog.

The point is that I do prefer having more services than having FREE calls. I want fair prices, flat rates, but when I pay I want to get more and more. It’s my point of view, being a consumer and a professional in this field at the same time. FREE is not a long term word, FREE is something you get now, to pay something later. FREE is something you get now, to give away your personal data or something.

All this said, FREE is FREE, a fair price is a fair price. Avoiding expensive international rates by getting a local number to call your friend who lives abroad is great, you can save a lot of money, but it’s not free. You pay a local call. You pay for getting that number. There are many tricks that VOIP offers you to pay less, but FREE is only a dream and people will soon wake up and understand that the dream is over.

There are a lot of providers that are offering VoIP + DSL at a flat monthly rate saying: national calls included / international calls included and so on. Well, is it free? No, it’s not free. There are complex calculations behind that price you pay monthly, and I can assure you that calls are not free. Those are included, but not free.

The big point is the following: give me more services, and I’ll be willing to pay that flat rate more and more. Give me more services, and you will differentiate your offering from competitors. Give me more reasons to choose your offering rather than those of your competitors.

One last point: Markus Goebel, responding to my open letter to VoIP providers, writes:

That’s the catch of the weird situation in VoIP, where the majority of interesting news sources are blogs from people who have a personal business interest. Two of them (Luca and Alec) run companies in the area and the third does public relations for telecommunication companies. That’s a pretty obvious reason why they are against free calls.

This sentences basically states that me, Alec Saunders and Andy Abramson are against free calls because we are involved in this market. The point is much different actually: I am against “fake” free calls because we KNOW that those are not the solution for the market, those are a short term ways to increase the user base of a certain provider that, suddenly, can disappear.

Free calls are something the market is looking forward to, call rates are quickly dropping to zero (it’s competition!) but if providers have nothing more to make users pay, it will be really painful both for users and for providers.

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  • Luca Filigheddu
    Markus,
    in my previous article I've disclosed that Sitofono is from my company, so I haven't expressed any comment on it. Moreover, Sitofono is for business, it's not a product for consumers. It was just an example of "value added service" that is provided through VoIP.



    You can easily take a look at any of my posts. When I mention one of the products from my companies, I always disclose it. In addition, I can confirm that my post about free calls was in the feet of a particular user, belonging to a particular category of users, not those who want to call to pakistan for free, but a different one.



    I just expressed my humble opinion AS A USER, not as a professional. With the hat of a VoIP professional, I can say that free calls are not the solution for ISPs, it's not a long-term strategy.



    Thanks for your comments and for reading my blog :-)



    Luca
  • Markus Goebel's Tech News Comm
    Hello Luca,


    thank you for this debate.



    I must admit that you have strong arguments which make me think. But still it seems suspicious that most VoIP news sources are company driven and opt for higher prices.



    They tend to just tell what's good for their companies and not what's good for the costumer. At least I would like to see a disclosure under such articles (as we see it often at GigaOM) which explains your company's interests.



    People arrive on those websites via search engines and think it's an indepentend news source. But it's a marketing tool. That's why you see there news like "higher prices are good for you" while in user forums you find much more appealing messages like "how to make free phone calls from Pakistan to the UK".



    That's the kind of information I like. :)



    I dream about a worldwide SIP peering where everyone can call everyone for free. People would just have to pay their broadband connection and nothing for the calls, like they pay nothing for their emails.



    That's technically possible and it basically was like this when the SIP movement started. But now I see every time more SIP blocking. Calls, which where free before, have to take paid routes. That annoys me.



    Somebody has to say that too. There is a natural antagonism between companies and costumers. Obviously the companies want the highest possible prices and the costumers would love to get everything for free.



    Every side has to make their points. Also the end users. That's why I responded like I did.



    Cheers,

    Markus





    P. S.: The mentioned VoIP flatrates aren't always the best solutions. E. g. in Germany they normally cost 10 Euros a month for national calls. When I pay 1 Cent per minute, which is a standard price of many providers, I normally spend 4 Euros monthly for my phone calls. So I would have overpaid using a flatrate.



    Another example of the difficult relationships between users and providing companies.
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