VoIP Consolidation Well Underway

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

VoIP Consolidation Well Underway

There's been some M&A among VoIP Providers this year but there is more on the horizon. CLEC's are looking to get in the game with an acquisition. Indeed EarthLink did just that with its quiet acquisition of STS Telecom, a former UNE-P then Sylantro shop in South Florida (to go with its purchase of Deltacom).

Other ITSP's are actively seeking an acquisition or hoping one will come along.

It hasn't been all peaches and cream for Hosted PBX providers. There have been a number of stumbling blocks like QOS, call quality, E-911, fees and taxes, uptime, inter-operability, reliability, growth and scale. Coming on the heels of the Vonage lawsuit mania; the SunRocket implosion; VoIP Inc. bankruptcy; and other bad news in the sector that led some prospects to shy away from VoIP.

Compact that with free VoIP calling, iPhone apps, and the market got crowded real fast. Meanwhile, a real marketing campaign and clear messaging were lacking from many companies. The sales process for this service is different from other telecom services (TDM), which created a hurdle to sales growth (and scale).

Now we come to a time when VC money to Hosted VoIP (or Hosted UC or Cloud Comm) is slowing down, while the MSO Hosted PBX sales effort is launching.

Fair warning to ITSP's: Get your sheep together! Now!

By 2Q2011, Comcast and Cox will be rolling out Hosted PBX (99 seats and under) to top markets. This will put intense pressure on ILEC's, CLEC's and VoIP companies. Why?

For the following reasons: Both Comcast and Cox have

  • a brand.
  • a marketing machine. 
  • an installed base of customers.
  • deep pockets. 
  • knowledgeable product team.
  • own the network to control QOS and call quality.

As a client mentioned, "This isn't a message you want to hear (as a VOIP Provider), but it's one to take seriously."  So get your ducks in a row, fast.

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