How Come VoIP isn't Killing It?

Peter : On Rad's Radar?
Peter
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

How Come VoIP isn't Killing It?

Jon Arnold makes a point: "Voice is a double-edged sword for service providers - most of their businesses are built around it, but with the advent of VoIP, it's become a commodity, and in many cases, a race to zero."

One point I make is that voice is just one app that we sell. Voice and email together are the key killer apps. But why isn't VoIP making more inroads?

I talk to many VoIP Providers and few are anywhere near where they want their numbers to be. And they are in a quandary to figure out how to increase sales. 

One reason is that their isn't really a problem to fix for some people. Landlines are declining for consumers as people switch to cellular only, but not many businesses have gone all cellular. (Plus you still need to fax -- and VoIP has not solved that issue for the most part).

Cable is making progress based on selling bundles to consumers. We will soon see how they do selling digital phone service to small business. Notice that MSO's do not mention VoIP?

I think the other reason is that it isn't a transactional sale. To sell Hosted PBX is a long sales cycle. Selling SIP trunking is easier (as a PRI replacement), but it is declining ARPU. To an agent that means less commission. To the carrier, it is less revenue (or new revenue).  So what agent set wants to spend the 7 contacts to sell 7 handsets and Hosted PBX to a small business for less than $400 in billing to see $40 per month?  

When you are basically offering landline replacement, it is easier for the agents to sell landlines (and get paid more).

Jon Arnold also mentions that some VoIP Providers are morphing - like Jajah and Mobivox - to incorporate VoIP into a tool.  Another example would be FreedomVoice with their Newber app.

The problem will still be transitioning the sales force (read channel agents) from a transactional model to a Trusted Advisor or Solution Selling model. To do that, agents would need to make points on the hardware and the install as well as the monthly billing. The Channel isn't ready, but some companies - like Level3, XO, and Adtran - are working on it. (And so will the TCA in 2009).


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