Packet8 Interview

Rich Tehrani : Communications and Technology Blog -
Rich Tehrani
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Packet8 Interview

Packet8 has might a splash lately with rapid subscriber growth. They don't get as much press as Vonage and AT&T but they are growing quickly and I decided to interview Huw Rees,  the Vice President of Marketing & Sales at 8x8, the parent company of 8x8. He has some great comments and I am surprised about the WiFi telephony answer. Please enjoy the interview.

What do you think of the potential SBC, AT&T merger?

This really has little direct effect on 8x8, although we believe that
traditional telco assets like AT&T and SBC will increasingly be put
under pressure by the VoIP revolution. This will undoubtedly result in
further consolidation of those assets.

Is this good for Packet8?

It is only good insofar as it tends to confirm the long term trend of
declining value of traditional TDM and analog lines.

How will this shape the telecom landscape?

It depends upon the resulting strategy from the combined entity. There
is still general over capacity in the voice termination business, so
this merger is unlikely to significantly alter the competitive pressure
on pricing to end consumers and to VoIP operators like ourselves.

Who do you see as your major competitors?

Vonage, AT&T and Lingo

Do you see benefits in being acquired?

That totally depends upon who the acquirer is and what their motives
are. This is not a specific strategy we are following today, but we are
a publicly traded company and acquirers can approach our board and I'm
sure they will consider any offer that is potentially beneficial to our

How is your business service coming along?

We are quite pleased with the acceptance. This type of service is
significantly more complex to deploy and manage than a residential
service and we have spent considerable resources to develop the service,
procedures and processes to make it a long term success for us.

Your Videophones seem to be selling well. Are they meeting your

There is still a long way to go before every consumer regards a
videophone as a "must have". Our goal is to get to this point and we
realize this is a long commitment for us, but we are true believers in
videophones as the next generation communications appliance.

Where will Packet8 be in five years?

Our best guess is an independent, large size VoIP service provider with
service delivered in many countries throughout the world with a
reputation as one of the low cost, high quality service providers.

What do you think of p2p VoIP?

Interesting, but in the short/medium term people still need to connect
to the PSTN. Almost all VoIP providers (including Packet8) allow free IP
calls on a P2P basis.

WiFi Telephony?

We are unconvinced that the current WiFi phones will find a mass market.
The battery life is too short and the range is not good enough yet.
However this will improve through 2005 and integration wit GSM phones
would make the technology much more appealing.

What is your biggest obstacle to success?

There really isn't a single big obstacle for us. We don't have the
financial resources that Vonage and AT&T have for marketing the Packet8
service, so we have to be more creative and offer the consumer choice
i.e. a better service at a lower price point.

Why should a potential customer buy VoIP service from Packet8?

Great quality, at a great price with excellent customer service and an
unparalleled suite of service offerings, residential, virtual office and

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