Vanilla voice – How low can you go?
Posted June 24, 2009on:
The fight over vanilla voice services is starting to get a little crazy, and I expect to get it more so as the days go buy.
In the mail this week, I have an offer from Cox Communications of Northern Virginia offering unlimited local and long distance service and the other bells and whistles for $22/month for 12 months for new customers
Add to that an from Vonage offering $9.95 per month for unlimited service for three months, but a 24 month commitment is required (price jumps back up to $24.95/month after 90 days, and BTW, when does Vonage think it can extract long-term contracts like wireless carriers?)
But wait, there’s more! MetroPCS is offering unlimited international calls to over 100 different countries for only $5 extra a month. Users already have to be signed up to a unlimited national calling plan between $40 to $50 a month. The catch is MetroPCS A) requires pre-paid; it’s a pre-paid carrier like Boost Mobile and Virgin Mobile and B) MetroPCS has a smaller coverage footprint than the bigger cellular guys; its’ coverage map looks like a bunch of bubbles spread across the U.S.
With companies like ooma bundling in unlimited local and long distance service for the life of its handset (well, an average over 5 years), and the cost of a phone call to anywhere within the United States – next door, across the country – running around 1.9 cents per minute, with fractions of pennies between carriers, vanilla voice services are slowly spiraling to the bottom.
Since fractions of a penny per minute are involved, managing costs and having good business models are key for anyone in the game, be they playing in the consumer or business arena. And it’s going to get uglier before it is over.