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Why There Is No More space for new VoIP Players

by Luca Filigheddu on November 10, 2008



Why There Is No More space for new VoIP Players
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Yesterday I was talking with an american friend of mine who told me how Wal-Mart became the winner in the fight among low price stores in the US. In fights like this you just need to offer the lowest price in the market, there is no more space for competitors and no alternative ways to win.

Today I came across two new web based VoIP services (Freeringer and Voxofon) who are offering PC to phone/phone to phone calls with a lot of free calls to specific destinations.

To be honest, I didn’t loose much time to pay attention at their offering, for me this was just another YAWN. I learnt there is nothing free in our life, especially when it comes to business, someone has to pay at some point. Many different models have been tried out over time by different services in various parts of the world, but aside from some exceptions, most of them have been a complete failure.

How can they sustain a credible business model? How can they (these two and any new entrant) deal with competition? I’m sorry, but I do firmly believe the space for new VoIP players is over. Market is full of offerings and services, all of them mainly fighting just in terms of price. Where is the value? What’s the strategy to take full control of churn rate?

New services who want to survive, must offer something new and different, something which provides final users with a different perspective, users who are not looking for money saving only. From this standpoint, Ooma is an interesting example (unlike some premature signs of failure, it seems to be still alive and well).

If your new VoIP service you are proud of and that you are going to launch and make it compete in this tough market, is not offering something DIFFERENT, SPECIAL, UNIQUE to your target customers, please refrain from spending time and money, you’re gonna fail. Period.

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Tagged as: Business, freeringer, luca filigheddu, Voice over Internet Protocol, VoIP, voxofon

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  • Gabriel
    I hate to differ with you but I find that my clients like the features and flexibility of our VoIP offering.

    It is not about price, it is about functionality & deliverables!

    Some are even paying us more than they used to pay legacy systems. Why? Because of unification of all of their communications, flexibility of services and most important hands on suport that goes from inside the LAN to Wan offerings to the layer 7 apps that are being deployed.
  • Thomas
    If you have T-Mobile G1, you should check out Voxofon's app for Android. Now this is something new and special - you can finally make international calls from your cell phone without going broke :) You do not need to launch an app for each call or enter PINs - you just use your phone as usual to make calls.
  • I agree to an extent about the flat market. I wrote a little about that here:
    http://blog.tmcnet.com/on-rads-radar/2008/11/be...

    I don't know what Oovoo's business model is, but the Free-nomics model isn't working.
  • Ruslan
    Please spend some more time on studying FreeRinger, it's very diffrent from what you think. It's totally free service and it works from ANY web browser, it does not require to install anything on a PC you are calling from. You can be reached from a phone on any PC in the world. IF you are not online, you will receive a voicemail right to your email box. This fits well to people who travel a lot and access internet from clubs or other public places. And one more thing, you can easily bookmark your calling destinations and you can even embed FreeRinger into your home page.

    Do you know any other voip service which offers so much and for free and does not require to install their buggy software ?
  • How do you make money? It's all free, right?
  • Ruslan
    Q13: Where is a business? How do you make money?
    We love giving people the chance to call whomever they want for free and we want it to stay that way forever! So, after your call begins, you may hear a brief 10-second voice advertisement and see in the application window some entertaining and even interactive flash ads. We want to provide valuable offers that are of interest to you, so our advertisers are screened with that in mind.


    Q14: Are you on revenue sharing with telephone companies?
    No! We don't receive a cent from telcos. All our revenue comes from interactive flash ads. You also can advertise on FreeRinger, place your ad request here.
  • We did this from 2000 to 2002 with our service Chocophone. Sorry, it doesn't work and I wouldn't ever do it again.

    Luca
  • Thanks for stopping by. I'll definitely do that, but it's important to help users to immediately get how different your service is from the others. And from what you mention in this comment, I still don't find anything different from what I can get elsewhere. Help me to understand your service better, maybe I'm missing something. Thanks.
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