The Google Voice and Gizmo partnership bears watching. By signing up with both companies and performing a few software downloads and such, you are on your way to making free calls. It is unclear if the service is global or just for the US. Nevertheless, it is clear that the service is free. It is also clear that you will be able to use the service using almost any SIP phone or calling device and terminate to any phone or device, SIP or PSTN. Moreover, you will be able to place and receive US calls without incurring any costs or signing up for any specific calling plan.
How does this affect the business of Broadvox, other ITSPs, the ILECs, CLECs or any other carrier? Frankly, I'm not sure yet. What I know is that using the service is not simple. It requires a little study even for someone like me in the industry to understand what's required how to set it up and then how to make calls. Therefore, it isn't likely to be used by the layperson until it becomes much simpler. This is probably why it is an invitation only offering from Google Voice. Anyway, the carriers with a focus on the residential or consumer markets will be the initial target of this product offering. Carriers focused on business markets will still have significant barriers to entry.
Businesses do not use phones only to make calls. The combination of the business phone, PBX, and carrier creates a unique calling environment for each business. Carriers and businesses work together to provide hunting arrangements, LCR, business continuity, load balancing or dynamic call distribution, DID publishing, toll-free calling, etc. Additionally, carrier networks are inherently more reliable. Many features and services deliver value and are worth payment. However, "free" is a bear to compete with, as carriers will have to get better at articulating our value proposition. We cannot view this partnership from askance or with our heads in the sand. We must position ourselves to maintain an effective value proposition worth payment.
Years ago, I was in Bangkok speaking to an audience of travel agents who feared that the Internet would drive them out of business. I explained that the possibility was there but their value proposition was knowing about the locations, hotels and airlines that interested vacationers and business travelers. I strongly suggested that they set up websites and expand beyond their traditional methods of marketing and sales. The travel industry soon decided that even if these agents offered value, they were too costly. The airlines and hotels cut agent-booking fees and entered into agreements with aggregators like Travelocity and Priceline. The Internet made it easy for new entrants to take away the agent's market share. In contrast, I met with Toy R Us to consult with them on addressing the threat of Amazon. My advice to them was the same. Sell your products over the web, integrate your web and brick and mortar strategies, and redefine the sales channel for Toys R Us. It worked because they moved quickly and with conviction.
If Google and Gizmo represent a new way of delivering phone service, then we as carriers need to acknowledge the threat and act. VoIP/SIP Trunking is the new telecommunications frontier. I'd rather not see new entrants but this is America and capitalism is the name of the game.
So Game On.
See you on Monday with another great recipe. Have a wonderful weekend!