I've been having a sideline conversation with one of the readers of my last blog entry on CounterPath, and I thought it was a good idea to share the back and forth comments here and perhaps expand the discussion to include input from others.
I have a question for you. First, I am a shareholder of a significant number of shares of CounterPath. For the life of me, I can't understand why the share price and volume have
languished in this stock. It has had nothing but good news for months now. They're landing huge customers, revenue is ramping up, insider (Steven Bruk) is buying shares in the open market. I could go on, but I'm sure you're as familiar with the company as I.
Thank you,
D
My Response:
Hi D:
I understand your frustration. The lack of investor interest may be due to a sort of "Vonage effect" that is hampering a number of VoIP-related companies. While the millions Vonage has spent for marketing has helped to popularize VoIP service among the masses, it has also had quite a negative impact on its financial performance and stock -- and I fear has depressed the rest of the VoIP sector somewhat.
The brightside, I believe, is that this market condition will be relatively short-lived. Few investors outside of the IP communications industry know much about the industry yet -- the array of companies or the products/services that are making their way into the marketpace. Once they do, companies like CounterPath stand to benefit greatly, along with their stockholders.
My advice is to you, therefore, is to hang in there, and think mid to long term on your stock holdings. The overall trajectory of the IP communications technology space is only heading north...
D's Reply:
Tell me if you share this conclusion:
I think telecoms are going to have to evolve into something a lot more streamline than they are today in order to survive and will eventually, have to push softphones as a way of cutting down on equipment expense as VoIP is going to be the standard medium for telecommunications. There's no sense in having to license a softphone and buy or produce a mechanical phone.
My Latest Reponse:
I agree completely that service providers need to evolve in order to stay competitive and survive in the marketplace -- and the good news is that we are starting to see a good deal of evolution occuring -- especially in the managed service provider (MSP), P2P and hosted IP-PBX markets.
The growth in softphone use will come not only from providers "pushing" them on customers but also from an evolutionary change in end user behavior and buying habits, the widespread availability of reliable e911 support (which CounterPath and Intrado are working on), and continuing advances in broadband wireless coverage.
However, I'm not sure we'll see the wholesale replacement of hardware-based phone sets by softphones anytime soon. Rather, I believe softphones will continue to be used more as complementary/adjunct communications tools -- perfect for mobile and remote office/teleworker applications.
What do you think? Please post your comments, if you have any, below!
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