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Vonage The cable companies are starting to aggressively undersell Vonage on price,
The cable companies are starting to aggressively undersell Vonage on price, and that is a very interesting development. Look what happened to NETFLIX when they started facing price competition.
Vonage will have to do likewise. Perhaps $14.99 phone service is in the future. If so, how much excess cash will Vonage have to spend on customer service? You see where competative marketplace forces drive this sort of thing. The race to the bottom!
I had a client with a major telco who explained this to me once. it is called the "threshold of pain" theory. In the cell business, signals are dropped and calls have poor quality not because of technical issues, but because of monetary ones. They could improve cell service considerably by adding more cell towers. But that would cost more money and reduce profitability.
What the telcos discovered is that folks will tolerate an incredibly high "threshold of pain" with regard to cell service - one they would not tolerate with government-regulated land lines. So cell service is crappy because it can be, and it is more profitable to be so. Not because it has to be.
I suspect the same phenomenon is in effect with Voip. Folks will tolerate a lot more trouble with Voip if they are saving big bucks. But if the savings are not so great, no one will put up with it for long.
As a software guy, let me ask you the following "hypothetical" question.
If you ran a cable company that offers cable modem as well as Voip service, how hard would it be to write a subroutine that tagged packets addressed to a Vonage site and just, ah, slightly delay them somewhat? On a random basis, just to make it fun.
Of course, given the background and history of the cable companies (including some of the more "interesting" founders!) one would never, ever expect such a thing to occur.
But it is an interesting possibility.
Read The Full Thread: Goodbye to Vonage - it was great while it lasted
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robertplattbell posted "The cable companies are starting to aggressively undersell Vonage on price," on 12/27/2005 |
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