Voip Residential Comparison Guide: Evaluating Packet8, Lingo, And Vonage
Voice over internet protocol [internet telephony] is a rapidly growing technological alternative to traditional land based residential phone systems. Instead of making calls through telephone lines, VoIP routes your calls over the internet by way of your cable or DSL provider. Notably, residential VoIP phone rates are cheaper by at least 50%, making VoIP an attractive option for many consumers. Today, three internet telephony companies are leading the way in signing up new customers – Packet8, Lingo, and Vonage – so let’s examine and compare their offers to find the VoIP plan that works best for you.
AT&T and the former Bell companies are in for the fight of their lives thanks to the growth of VoIP. Vonage is one of the better known providers with Lingo and Packet8 each making their presence known. For consumers just like you, there are great savings to be had; please read on for a comparison between the leading three providers.
Vonage – Quirky and unforgettable television commercials are one way Vonage [an abbreviation of Voice Over Net Age] tells the world about its services as the company is aggressive in signing up new customers. Vonage’s standard plan – Premium Unlimited – retails for $24.99 per month offering users an unlimited number of minutes to call anyone in the USA, Canada, Puerto Rico, and Europe. Calling features included with this plan are: call waiting, three-way calling, voice mail, call forwarding, call transfer, call return, and more. Vonage also offers a basic plan for $14.99 per month where all of the features mentioned are included except minutes are limited to 500 per month.
Lingo – Offering calls to the US, Canada and Western Europe as part of its standard $21.99 per month plan, Lingo is formidable competitor to Vonage. Every Vonage calling feature is matched by Lingo with a few extras thrown in including anonymous call rejection where you can automatically dump calls from people who are trying to hide their identity from you. If you want a basic plan, Lingo matches Vonage’s 500 minutes offer and even markets a thrifty, bare bones plan for Lingo-user to Lingo-user only calls at $7.95 per month.
Packet8 – Gaining steam in the VoIP market is Packet8, a company that offers a competitively priced plan for just $19.99, covering calls to all 50 states and Canada. Matching all of the calling features offered by Lingo and Vonage, Packet8 goes one step further: Sign up and pay for your service for one year in advance and the VoIP provider’s $19.99 Freedom Unlimited plan is just $199 per year. On top of that, Packet8 offers a rebate covering the cost of the quality Uniden IP phone with built-in router and expandable handsets if you go with their annual plan. Vonage and Lingo do not match Packet8’s special offer, therefore you will have to pay separately for the adapter and for a phone.
A couple of concerns have been raised over 911 access with VoIP plans. One concern has to do with power outages, while the second one concerns connectivity to a local 911 center.
With the first concern, if you have a power outage then VoIP will not work for you unless you have a generator in place as an electrical back up. To get around this limitation, many VoIP users simply use their cell phones to make emergency calls when needed.
With the second concern, the Federal Communications Commission {FCC} has put into place new requirements for the handling of 911 calls: all VoIP providers must now have the ability to route calls to a local emergency response center and provide the caller’s callback number and location to that center. This recently implemented requirement – known as enhanced 911 or e911 — has closed an important loophole in VoIP service, one that benefits VoIP users everywhere tremendously.
How Can A Small Consumer VOIP Provider Survive?
There is a lot of buzz about VoIP Internet phone service. On the consumer side everyone is getting a lot of exposure to Vonage commercials as well as triple play offers from Cable Companies. From a technology standpoint, VoIP is now much more mature than in its nascent days when Internet telephony meant a scratchy voice conversation over two computers. Whereas VOIP Services has been used by Telcos to carry voice traffic over long portions of their networks for years, it is now positioned to become the standard technology used to carry voice traffic over the last mile from every consumer’s home. Increased broadband penetration and advances in VoIP technology make this possible, and now there is a long line of VoIP providers out there looking for a piece of the action. They range from giants like Verizon and Comcast to relatively small unknowns. For the first time in the history of telecommunications it is possible to be a telephony provider without the huge barriers of capital needed for switches and network operation centers (NOCS).) nor the regulatory barrier of being a Local Exchange Carrier. So will the industry be marked by many small nimble players? What is the likelihood of survival for small consumer VoIP service providers?
The Cable TV companies have a strong position in the telephony market. They already have a large embedded base of customers. They also have a local presence, with field installers regularly driving around neighborhoods and customer service locations in every town in which they have a franchise. Having the field installers is a major advantage since they can install VoIP service and also hook up inside wiring so the service experience is no different than before. Therefore a person doesn’t have to be the least bit technically inclined to adopt the service, thereby opening the market to the masses. The pure-plays like Vonage just can’t reach the mass market like this.
Cable companies also have huge brand awareness in their markets. What is also potentially important is that they are perceived as a utility company and people are used to getting phone service from this type of entity. There is a familiarity and comfort level of going to a utility company for phone service.
They also have tremendous strength in both billing and customer service. While some may hate the cable company because they have lengthy time windows for showing up for an installation, may show up late, and may keep you on hold at the call center, the Cable companies are in actuality very good at managing the complexities of their operations. For example, RCN entered some markets years ago as an alternate cable provider thinking they could leverage people’s dislike of the cable companies’ service record and do it better; instead they ended up realizing how very complex it is and ended up doing it worse. If a company wants to scale as a major VoIP provider, they will have to manage the complexities of billing and customer service. The cable companies have been down this road already.
Here is what could be the biggest factor to why the Cable companies will be most successful at VoIP and ruin the chances of other smaller entrants – They provide a broadband connection. Since this is required for VoIP, the incumbent provider has the first dibs on providing voice service. Also, since broadband connections have high margins and VoIP has low margins, broadband providers could treat voice service as a loss leader to get and keep customers on their high-speed connections. NetZero, for instance, is giving away free telephone numbers and low priced VoIP service presumably with the hopes of signing on users for their ISP. Voice service could in fact become so commoditized that it will be given away with broadband service the same way email is today. If this becomes a reality, there would be very little market opportunity and a bleak survival outlook for smaller pure-play VoIP service providers unless they could offer a differentiated value proposition.
The Local Phone Company also shares many of the same advantages as Cable in that they have strong brands, ability to bill effectively, established customer service, and field technicians. They also should provide the greatest comfort level to people for providing a phone service. However, the Phone Companies have dismal showing compared to the Cable companies who have the greatest number of VoIP subscribers. Verizon VoiceWing and AT&T CallVantage each have only 5.5% of the 2.9 million pure-play VoIP subscribers (Telephia Q2 2006). Those 320k subs are dwarfed by the Cable Companies like Time Warner Cable who alone had 1.6 million VoIP customers as of October 2006. Why have the Phone Companies had such a dismal result? Internal confliction between POTS and VoIP is one reason. They can not put emphasis on a low margin VoIP product in their core offer and have struggled to create an effective bundled product strategy with advanced services. They are also expending more resources and internal focus on better broadband offerings than DSL and trying to break into video services. Nonetheless, they still hold second and third positions for share of pure-play VoIP subscribers and have deep pockets, which will allow them to far outspend a small VoIP provider to get mindshare.
Vonage, with 53.9% of the 2.9 million pure-play VoIP subscribers, is spending a ton of money to get mindshare and customers. This is good in that it raises awareness of the product category, which helps a smaller pure-play. However, it also presents a huge challenge for smaller providers to compete head to head for customers when a single provider has such a dominant voice.
There are a number of challenges facing a smaller VoIP provider. Small providers have to compete for share of voice against companies that are spending a lot of money. As far as the business case goes, VoIP has relatively small margins and the ROI for marketing campaigns and generating brand awareness is a challenge. Yet without spending money on marketing, it is difficult to capture customers.
Then there is the challenge of the market size. Pure-play providers don’t have local installers and technicians, which limit the market to those who have the technical savvy to set up the service or the willingness to do so. If the target market is defined as people who have the technical savvy to set up VoIP on a home network, then this market is comprised largely of younger people. This group is increasing mobile based and has little use for a landline phone. Also, consider how the overall telephony market will change over the years. People in college now that will be graduating over the next couple of years and getting apartments are 100% mobile based and have never had a landline phone. Thus the market for pure-play VoIP will be shrinking as fast as it grows.
However, there is still an opportunity for small VoIP providers in this challenging market. The opportunity is to focus on niche markets and leverage specific advantages of VoIP that are particularly important to specific customers segments. In such segments, word of mouth advertising is a viable strategy if the service can meet a strong need. This solves the dilemma of investing in media to build a strong brand and maintains better profitability.
ReVoS Internet phone service is an example of a small VoIP provider taking just this strategy. They are focusing on a niche segment of people who make a lot of international calls. ReVoS offers VoIP service, which includes unlimited international calling to over 40 countries including the standard VoIP product offering for $24.95 per month. They have also developed a VoIP product that works over a mobile phone that doesn’t require a broadband connection. This is geared to people of international origin who, by the way, have the greatest propensity to use cell phones of any demographic in the U.S. This niche makes sense since carrying long distance call traffic is an inherent strength of the VoIP networks. Also these customer groups are better reached through a niche strategy and would be missed by mass-market strategies. This market is comprised largely of people living in the U.S. who have moved here from other countries. These are tight communities where word of mouth can flourish and the value proposition is strong when saving people money on high cost international calls. This is an example of how a small VoIP provider can successfully compete against much more formidable competitors such as the Cable Companies and Vonage.
However, the future of the telephony industry and the role that VoIP takes still needs to be fully defined and there are many uncertainties. There is a long list of unknowns, which include such things as Google getting into Voice and whether Microsoft includes a softphone and VoIP service as a standard part of their operating systems. Fixed Mobile Convergence (FMC) is another technology wildcard that could change the shape of the competitive landscape. The overwhelming penetration of mobile phone service and mobile carriers’ ability to steal the show with a FMC offer is very real. This may be the competing technology that upsets the MSOs stronghold on VoIP. The question then becomes which bundled product offer is greater 1) Broadband and VoIP or 2) Mobile phone and VoIP. Another thing to consider is how Wireless VoIP (wVoIP) could change the competitive landscape and underlying telephony ecosystem if municipal hotspots and/or WiMax take off.
Whatever the future the holds, the economies of the telephony industry are likely to place a few large carriers in control of the majority of the market. People want simplicity in their lives and the winners will be those who provide the most seamless solutions to people’s basic communications needs. For smaller VoIP providers to survive and make profit, they will need to meet strong niche needs that get overlooked by the mass adoption strategy, have a well defined and differentiated value proposition (Recall ESPN Mobile’s problem), efficient operations to control cost and low margins, low churn in order to compensate for limited total average revenue per subscriber (ARPU) absent a larger bundled product strategy, and the ability to benefit from viral marketing within the target markets. With all of this in place, there is a chance of survival for small VoIP providers.
Increasing Customer Loyalty with Enhanced Video Services Part 3 of 3
Part 3 of 3:
SIP Session Management
The OmniVox3D Application Server includes a powerful SIP Session Manager. This manager is a SIP Back-To-Back User Agent (B2BUA), a type of SIP Proxy Server that provides the front-end interface to OmniVox3D for incoming SIP calls. The SIP Session Manager has the following functionalities that are important for creating SIP-based telephony services:
• Program control — Answers calls, performs call dialogs, transfers, and ends calls under the program control of the OmniVox3D Application Server, and handles call dialog programs provisioned using the OmniView Service Creation Environment.
• Interface to media servers — Interfaces to standards-based voice and video media servers powered by Dialogic HMP Software via SIP with MSML or VXML markup languages. These media servers are used for playing voice and video messages, message recording, and the collection of DTMF digits and speech recognition data from/by the caller under program control of the OmniVox3D Application Server.
• Call control — Bridges SIP call signaling to a destination user agent or gateway, and can be used for prepaid billing and call center applications. Under program control of the Application Server, it is able to control the length of destination calls, interrupt and play warning messages (with media servers using Dialogic HMP Software) and perform “follow-on” calls. Because the SIP Session Manager integrates the SIP signaling, media servers and gateways can be freed efficiently from pure SIP calls once a call is routed.
• Real-time billing controls — Controls the length of destination calls, interrupts and plays warning messages (with media servers using Dialogic HMP Software), and performs “follow-on” calls under the program control of the Application Server.
• Interface to Session Border Controllers — Interfaces to third-party Session Border Controllers for routing and application services.
Working Together to Benefit Customers
Dialogic and APEX Voice Communications share a vision of standards-based voice and video solutions. They both focus on providing the market with proven technically sophisticated products that reduce the time, cost, and complexity of delivering services in today’s highly competitive communications environment.
Both Dialogic and APEX are also dedicated to providing their customers with the highest-quality technical support, educational, and professional services, designed to reduce their customers’ time-to-market, but increase time-in-market
Together, Dialogic and APEX dedicate themselves to placing open-standards-based advanced voice and video technologies in the hands of their customers quickly and cost effectively.
References
[Infonetics] Service Provider Plans for Next Gen Mobile and Wireless Broadband, 2007.
Acronyms
2G 2nd Generation
3G 3rd Generation
AIN/IN Advanced Intelligent Network/Intelligent Network
ASR Automatic Speech Response
B2BUA Back-To-Back User Agent
DSP Digital Signal Processor
DTMF Dual-Tone MultiFrequency
HMP Host Media Processing
IMAP Internet Message Access Protocol
IMS IP Multimedia Subsystem
IP Internet Protocol
IVR Interactive Voice Response
MSML Media Server Markup Language
MSP Multi-Service Platform
NGN Next Generation Networks
OAM&P Operation, Administration, Management, & Provisioning
ODBC Open DataBase Connectivity
SIP Session Initiation Protocol
SNMP Simple Network Management Protocol
TTS Text-To-Speech
VXML Voice eXtended Markup Language
About APEX Voice Communications
APEX Voice Communications, Inc. is a leading global supplier of multi-service SIP Application Servers to service providers and enterprises, as well as TEMs, systems integrators, VARs, and developers. The standards-based OmniVox3D Application Server enables innovative, revenue-generating voice and video services to reach the market quickly, easily, and cost-effectively.
Headquartered in Woodland Hills, California, USA, APEX was founded in 1989 and has over 15,000 installations across 95 countries. APEX has delivered OmniVox3D solutions and platforms for small organizations running single services, to service providers running thousands of simultaneous ports with hundreds of enhanced multi-media services.
About Dialogic Corporation
Dialogic Corporation is a leading provider of open systems platforms to both the enterprise and service provider markets. The platforms enable converged communications, allowing service providers, developers, and system integrators to deliver services, content, and applications using multimedia processing and signaling technologies.
Headquartered in Montreal, Canada, Dialogic and its subsidiaries have over twenty offices worldwide, providing local presence, knowledge, and support to serve its customers around the globe. Dialogic’s research and development centers are located in Parsippany, New Jersey; Buffalo, New York; London, England; Dublin, Ireland; and Stuttgart, Germany as well as Montreal.
Learn More about this Innovative Solution
For general information, proof points, and case studies about the products described in this white paper, visit http://www.apexvoice.com and http://www.dialogic.com.
Dialogic Corporation
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