Prices WIll Increase

Posts: 8 · New Forum Member Joined: Apr 19, 2005 Posts: 8

First, I am a very happy Vonage user on TWC/RR Service

Based on reading that I have been doing lately don't be surprised when Vonage Prices go up........

The government is allowing the Voip market to grow by not taxing the service which is a marketing tatic that Vonage and other Voip services use. Once the market has grown the government will break into the market and force Voip phone taxes just like the landlines and cell phones are being taxed today. Don't be surprised when your Bill goes up 5 dollars in the future due to government and service taxes.

Also, if history repeats itself once the market is built and the customer base is there, I predict that Vonage and other Phone Services will increase their price to that of current landlines today. Hey you have been paying these prices for years....now you get cheaper prices because it is a fairly new technology and the kinks are being worked out. Once the service improves, and the kinks worked out, they then raise the prices compareable to landline prices today you may or may not remain a Vonage Customer.

Shad

Posts: 2257 · Posted: Wed Nov 16, 2005 5:10 pm Post subject: Re: Prices WIll Increase

shadowlesss wrote:

The government is allowing the Voip market to grow by not taxing the service which is a marketing tatic that Vonage and other Voip services use. Once the market has grown the government will break into the market and force Voip phone taxes just like the landlines and cell phones are being taxed today. Don't be surprised when your Bill goes up 5 dollars in the future due to government and service taxes.

Also, if history repeats itself once the market is built and the customer base is there, I predict that Vonage and other Phone Services will increase their price to that of current landlines today. Hey you have been paying these prices for years....now you get cheaper prices because it is a fairly new technology and the kinks are being worked out. Once the service improves, and the kinks worked out, they then raise the prices compareable to landline prices today you may or may not remain a Vonage Customer.

Shad

As to the first, no surprise there. Eventually the taxes will arrive.

As to the second, well, gotta disagree with you to a point on that one. Yes, Voip will eventually become more popular, but they are using bandwidth that is already paid for. Heck, once Voip becomes really popular, Vonage can scale back on their VoIP->POTS gateways, and it'll acually be cheaper for them as POTS declines.

Posts: 49 · Full Forum Member Joined: Nov 15, 2005 Posts: 49

You are of course assuming that price has something to do with cost. In reality it will have more to do with competition. Given that it will be increasingly easy to enter the Voip market and offer a service (with the lesser need to POTS gateways that you mention) you might expect to see a lot of smaller service providers and a corresponding decrease in prices in order to compete with each other.

One of the things that could screw up the above scenario is any government action that favors larger providers, requires the acquisition of sizable infrastructure, etc. Does e911 fit into this category?

Posts: 3198 · Posted: Wed Nov 16, 2005 5:41 pm Post subject:

this should be moved to the cafeteria or some other rambling thread forum.

Posts: 164 · Posted: Thu Nov 17, 2005 3:14 am Post subject: Re: Prices WIll Increase

shadowlesss wrote:

First, I am a very happy Vonage user on TWC/RR Service

Based on reading that I have been doing lately don't be surprised when Vonage Prices go up........

Shad

You're new around here, huh?

In the last two years, Vonage has upgraded everyone and lowered the price. Just because *X* brand is charging 35 buckies for service that costs 25 buckies with Vonage; don't expect Vonage to raise prices to match them.

Posts: 8 · New Forum Member Joined: Apr 19, 2005 Posts: 8

New User but not new to this segment of the market. I have been watching Vonage since its beginining. Yes, the prices have dropped due to other smaller companies entering the market and various other reasons that I will not go into detail about, all used to build its customer base so they can state that they are the largest. As far as prices not increasing because you are already paying for bandwidth is an idiotic comment. Do some research!

[quote="Pepperoni
You're new around here, huh?

In the last two years, Vonage has upgraded everyone and lowered the price. Just because *X* brand is charging 35 buckies for service that costs 25 buckies with Vonage; don't expect Vonage to raise prices to match them.[/quote]

NateHoy wrote:

As to the second, well, gotta disagree with you to a point on that one. Yes, Voip will eventually become more popular, but they are using bandwidth that is already paid for. Heck, once Voip becomes really popular, Vonage can scale back on their VoIP->POTS gateways, and it'll acually be cheaper for them as POTS declines.

Posts: 2257 · Posted: Thu Nov 17, 2005 12:09 pm Post subject: Re: Prices WIll Increase

shadowlesss wrote:

As far as prices not increasing because you are already paying for bandwidth is an idiotic comment. Do some research!

Wow. No need to get personal.

When I call another Vonage user, my Voip adapter is connecting to the Internet using bandwidth I am paying for. The other person's Voip adapter is connecting to the Internet using bandwidth they are paying for. In that case, Vonage is not providing anything but the initial connection, therefore the bandwidth is not provided by Vonage, and therefore the bandwidth, from Vonage's perspective, is, in fact, already paid for.

When I call (or am called by) a POTS user, Vonage maintains a VoIP<->POTS gateway for that user and I to make a connection. In that scenario, Vonage is purchasing bandwidth, be it in the form of an unlimited connection or a metered connection, to both the POTS and Internet sides of that transaction.

So, as the number of VoIP-to-VoIP calls increases, and especially if the Voip systems make the logical step of opening their networks to each other for direct VoIP-VoIP calls, thereby eliminating POTS-based routing, cost to Vonage will, by definition, decrease. Vonage will need less infrastructure to support the calls, since we will all be using external infrastructure that we are paying for independently, and the decreased need for infrastructure will result in lowered costs.

Cell phone companies, and Vonage, both generally offer "in network" calling with significantly reduced limitations, or in most cases completely unlimited and free. Why is that? Because they are keeping the calls within their own infrastructure, and don't need to pay for gateways and access to competitors' networks.

If everyone called using Voip, and all of the Voip vendors decided to "play ball" together, then the only thing we'd need the companies for would be to make the initial connection amongst all of our Voip adapters. From there, we'd be talking adapter-to-adapter. Why do you think services like Skype are free? Because, except for SkypeIN and SkypeOUT, they have almost nothing to do beyond making the initial connection.

Now, please tell me how this is an "idiotic comment".

Posts: 8 · New Forum Member Joined: Apr 19, 2005 Posts: 8

Yes the comment was in fact idiotic!

Yes I agree with the comments that you have made this time...you are right less overhead means less cost for Vonage. Infrastructure??? In the beginning Vonage had great customer service now it ****. More customers means more infrastructure, customer service reps needed, buildings, salaries, etc....

You have been tricked, you think that you are making free calls? It is a marketing ploy, they want you tell your family so you get them to join and thus you think you are calling them for free when in fact you are but they are now making money off of your family or friend. Are you paying for the unlimited plan with no long distance in the US? Then you are already getting free Vonage to Vonage, Vonage to POTS calling. The only time this makes sense is when you have an overseas family member or friend. By doing either of these you again grow Vonage and they need to build infrastructure which costs money and drives up prices. This strategy makes more sense for cell phone users because there is no unlimited calling except for in network. You can not get unlimited called to anyone that you want!

Do you think that these companies will "play ball" together for free? You got to be kidding me?

So yes idiotic!

Shad

NateHoy wrote:

shadowlesss wrote:

As far as prices not increasing because you are already paying for bandwidth is an idiotic comment. Do some research!

Wow. No need to get personal.

When I call another Vonage user, my Voip adapter is connecting to the Internet using bandwidth I am paying for. The other person's Voip adapter is connecting to the Internet using bandwidth they are paying for. In that case, Vonage is not providing anything but the initial connection, therefore the bandwidth is not provided by Vonage, and therefore the bandwidth, from Vonage's perspective, is, in fact, already paid for.

When I call (or am called by) a POTS user, Vonage maintains a VoIP<->POTS gateway for that user and I to make a connection. In that scenario, Vonage is purchasing bandwidth, be it in the form of an unlimited connection or a metered connection, to both the POTS and Internet sides of that transaction.

So, as the number of VoIP-to-VoIP calls increases, and especially if the Voip systems make the logical step of opening their networks to each other for direct VoIP-VoIP calls, thereby eliminating POTS-based routing, cost to Vonage will, by definition, decrease. Vonage will need less infrastructure to support the calls, since we will all be using external infrastructure that we are paying for independently, and the decreased need for infrastructure will result in lowered costs.

Cell phone companies, and Vonage, both generally offer "in network" calling with significantly reduced limitations, or in most cases completely unlimited and free. Why is that? Because they are keeping the calls within their own infrastructure, and don't need to pay for gateways and access to competitors' networks.

If everyone called using Voip, and all of the Voip vendors decided to "play ball" together, then the only thing we'd need the companies for would be to make the initial connection amongst all of our Voip adapters. From there, we'd be talking adapter-to-adapter. Why do you think services like Skype are free? Because, except for SkypeIN and SkypeOUT, they have almost nothing to do beyond making the initial connection.

Now, please tell me how this is an "idiotic comment".

Posts: 2251 · Posted: Thu Nov 17, 2005 1:44 pm Post subject:

Shad: Can we tone it down on the "idiotic" comments?

Thank you,

Posts: 2257 · Posted: Thu Nov 17, 2005 1:51 pm Post subject: Re: Prices WIll Increase

shadowlesss wrote:

You have been tricked, you think that you are making free calls? It is a marketing ploy, they want you tell your family so you get them to join and thus you think you are calling them for free when in fact you are but they are now making money off of your family or friend. Are you paying for the unlimited plan with no long distance in the US? Then you are already getting free Vonage to Vonage, Vonage to POTS calling. The only time this makes sense is when you have an overseas family member or friend. By doing either of these you again grow Vonage and they need to build infrastructure which costs money and drives up prices. This strategy makes more sense for cell phone users because there is no unlimited calling except for in network. You can not get unlimited called to anyone that you want!

Do you think that these companies will "play ball" together for free? You got to be kidding me?

So yes idiotic!

Shad

All I can say is, I'm using Vonage right now, because I make lots of calls and they are cheaper than POTS. With the emergence of tons of open-standard Voip clients all using dynamic DNS rather than POTS routing, Vonage and other companies will soon realize that they HAVE to play ball, or be lost.

If and when Vonage ceases to be the cheapest, I'll use another method. Given that large companies, such as the one I work for, are all going Voip and griping about the cost of VoIP<->POTS gateways, I think you'll find that the logical next step is for companies to start using Voip to talk to each other, and whenever possible to their customers.

Your "more customers means higher prices" is based on a false assumption. As Vonage's customer base increases, their infrastructure costs (assuming they need to maintain the same POTS gateways) do increase, that's true. But their COST PER CUSTOMER goes down. They may or may not pass those savings along, but economy of scale and competition will probably cause them to remain about the same.

The whole point is that prices are based on two things:

1. Cost - as Voip becomes more popular, Vonage will be paying less for POTS gateways. Why would they want to pay Verizon for access to SunComm's customers? Eventually, as Voip adoption rates increase, Vonage and SunComm will form a direct link to each other. It makes financial sense, as it cuts the cost for BOTH companies. Partnered Voip vendors do not need to pay POTS providers as much money, because their customers can talk to each other without Ma Bell.

2. Competition - as Voip increases, more and more Voip networks will be built. Given the ridiculously low cost (to the "phone company") of a Voip to Voip call, it's a no-brainer that everyone will want to get in. I'd gladly buy a half dozen Voip accounts from competing vendors at a buck or two a month each (which would reflect true cost plus margin for pure point-to-point VoIP), or set up free ones like Skype, just like I maintain seven Instant Message accounts so everyone can talk to me no matter what IM protocol they choose.

Eventually, maybe, one phone company will rule them all in Voip. But then, like Ma Bell in the 70's, they'll be declared a monopoly and broken up or price-regulated as such. In the meantime, with the openness of the Internet, alternatives will always exist. And remember, Vonage will continue to compete with the POTS vendors who already have copper in place. If their prices go too high, many of us will just call Ma Bell and have the ol' copper lifeline glued back to the side of the house.