The Future Of VOIP In The US

VOIP is still a second-class citizen in the world of telephony, but it continues to take the front page of tech journals and blogs. Dozens upon dozens of articles having something or other to do with Voice Over Internet Protocol have surfaced in newspapers in the months and years past as well.

The latest words to be spoken about the technology have to do with a court battle between a telecom monster (Verizon) and a puny, unprofitable New Jersey-based company (Vonage). Last week, big beat little.

Now, the legal mumbo-jumbo has nothing to do with Web 2.0. As far as I?m aware, anyway. And the verdict is meaningless to most. Vonage has few customers in relation to any major telecom provider in the US, and as Vonage is only working the American market; the rest of the world can go on without spending an ounce of energy ruminating the judgment. But it will have a noticeable effect for at least a few million people in the US using VOIP, one of the most utilized technologies of Web 2.0.

This is a fairly hefty blow to the existing VOIP market in the States. Sure, Skype is used by many more individuals than Vonage could perhaps ever hope to attract, but I?ll wager that few use Skype as their means for home-based contact to the outside.

At present, however, does any of this matter? The simple answer is: no. Vonage may continue to barrel down the hill to its capital-losing doom, and few - other than the company?s subscribers, of course (which my folks are) ? will ever care. I say this because home-based telecommunications - by whichever means one achieves the connection ? is headed toward extinction.

VOIP isn?t. Landlines are.

That?s because we?re currently counting 1 billion mobile phone sales (2006 figure) around the globe, and there remains an incline in the industry?s trajectory. More people are using their mobile phones as their main means of communication, making home phones less useful and unnecessarily costly. Landline customers are cutting their ties to their long-held traditional services entirely. Most of the people you know have already done so.

Vonage?s death spell was its insistence in putting a new spin on a dreadfully old medium. They set up shop just as the mobile phone market in the US was taking off in a very big way, giving the company not one market (traditional land-line providers) to contend with, but two. Its odds of survival are clearly not very good.

The only way it can ever maintain itself is to turn to the corporate sphere, where we wish it nothing but luck as it tries to weasel itself into the incredibly tight seals the already established industry leaders have set up for themselves.

Of course, there is the issue of competition, which appears to be the only genuine factor convincing consumers to jump to its side. But when the ship is sinking after being riddled with holes courtesy of the patent attack and the mutiny at the markets, the fairness incentive gets swept beneath the rug.

If there is a migration of consumers moving away from land-based services to mobile services, the destination of those consumers tends to be the most logical arena in which to invest something ?new?, yes? As that is generally the way things work, the best place start up a VOIP business is the mobile sphere.

As it turns out, the biggest problem facing any enterprising startups there is competition, once again.

Mobile carriers are not ready to relinquish their hold on the broadband data networks they?ve erected, even for lessees, to allow others to establish VOIP businesses. Some MVNOs have signed deals to gain access to these networks, but VOIP services are officially unwelcome. A shift in the carriers? strategies will only come when (and if) they choose to become utility companies, giving consumers access to the data networks and allowing the consumer the choice to do what he/she pleases with the bandwidth allotted.

VOIP is destined to take over basic telecommunications. There?s no doubt about that, at least any significant down to speak of. Mobile phone manufacturers are already getting ready for the switch. The switch will certainly be a gradual one, as it simply wouldn?t make sense for any party to jump in full-body from the start.

The folks behind Vonage chose the wrong path to start their venture. Yes, one can easily argue that Vonage would still be unable to break into the mobile market even today, nevermind several years prior. But hindsight tells us that even for America?s most popular paid-for VOIP domestic phone provider, it just wasn?t meant to be.

Anyone want to venture when the Vonage sell off will take place?