Are We Still Talking About the Phone?

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

Are We Still Talking About the Phone?

It is still about the phone.

Cell companies are stuck. After years of leveraged cool handsets to drive sales, cellcos are stuck as hardware providers - subsidized hardware too.

Cellcos aren't alone. VoIP providers are stuck in the hardware space too - phones, headsets, switches and routers.

On the one hand, the customer is getting it all in one stop and the ITSP (VoIP provider) can ensure that the gear inter-operates with the VoIP service. So that is good. However, there is a capital outlay involved, a lease arranged, or some other factor that can deter the sale.

Subsidizing phones plays heck with cash flow for cellcos. The subsidized handset results in more risk for the phone company, since if the customer goes belly up, they may not collect that ETF. The value of the contract is shadowed by the handset subsidy.

Even with BYOD (bring-your-own-device), the phone companies are still stuck with phones, with hardware - and the logistics and support that come with it. Their support costs would increase dramatically and customer profitability would decline, if they abandon hardware right now.

Consumers haven't separated the device (the phone) from the phone companies (cellcos or ITSPs) or from the phone service. If the device breaks or voice quality is poor, the phone company (VoIP or cellular service provider) takes a consumer satisfaction hit.

The phone companies have to start planning for a time when they can distance themselves from the device. What will support look like? How will they market their service?

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