Skip to main content

The Arthritic Worm can still turn

The newly merged SprintNextel is the old style Telco that still makes a significant portion of their revenue from voice, the Arthritic Worm has turned on Vonage and two other related VoIP companies by means of a court action.

They have a suit based on seven patents and are moving to block the VoIP provider(s) from using their network. They have also filed for an unspecified amount of damages.

This seems to be a very public attempt to salvage their voice revenues from the churn to VoIP calls. Something similar was aired in Europe about the then new kid on the block Skype. The decision there was that the olny way Skype was going to be stopped was to shutdown the Interent. The perception was that it was already too popular and the public backlash would be too great.

It will be interesting to see the outcome of the case, filed in Kansas, it will be seen as a gauge on the risk from VoIP technologies to the dinosaur voice carriers.

Time will dictate that voice is not special. It is simply a form of data content that travels some sort of network. The carriers that can react and adjust to this reality will be the ones to survive, natural selection will remove those that insist on harking back to the old days of high profits from charging for voice calls.

It is probably a timely move on the Telco's part as domestic VoIP is still not that widely used, despite the press about the technology. The group that will lose the most from a verdict in favour of SprintNextel will the SME Business users. This group tend to be early adopters of such technology as mobile and low cost telephony solutions, as they have the most to gain from cutting costs.

Combine the likes of Vonage with Asterisk and you have a very low cost solution for your telephony needs to run a business. If the SprintNextel network is closed to them, there will always be someone willing to carry the data, it just means that SN won't get the revenue from it.

There is still a lot of room in the market for pure IP providers, however they still require the basic telecom backbone in order to supply network access.

A decision against Vonage could see a new round of network build out for IP access. This won't have to be a national network but will most likely consist of small interconnected networks. So who will win? Ultimately I would say hardware and interconnect setllement providers.

Of course as Google Net starts to take shape and form there are ideally placed once more to pick up the demand.

Comments

Popular posts from this blog

Crisis Connections

What the flood situation in Thailand has shown once again is the power of social networks to fill the void of communication. In recent times the role of Facebook, Twitter, and Blackberry messenger has been shown in good and bad light.  The same methods that released the Arab Spring have also been used to coordinate the London Riots . Love them or loathe social networks are here to stay and what the floods show is how they keep people connected.  Some will say there should be no communication void if central government is on top of its game, but with a situation that can change so rapidly, and over such a large area the traditional press certainly struggle to keep the public up to date. Twitter and Facebook have been saviours for those of us outside Thailand at this time.  With roving reporters and connected people like Patee Sarasin and Jetrin out doing and tweeting many more people are kept up to date. Equally useful is the ability to time shift news updates...

AaI and Net Neutrality

On a previous post on Access as Infrastructure there was a discussion on the government led initiatives for ultra fast broadband. The proposition is that the build out of new access networks is such an expensive activity that the governments of Australia and New Zealand will make the investment, using a combination of public and private money. So with ubiquitous access a near reality and with that access provided in the same way as electricity, water, gas, and roads getting to your house what does this mean for the net neutrality debate? If the telco no longer owns the asset and are merely a party in the trade then surely this solves the net neutrality problem? The incumbent may get preferential treatment because of scale and buying power but this wouldn't be extended to priority routing. Moving the competition from the physical platform to the offering, as long as the telcos, CSPs, and RSPs are not government owned, then we can have comfort that the pipe is there and ev...

Muni, Muni, Muni

2006 is going to see an explosion in the activity of Municipal, Muni, Networks. This article from the BBC states that IP access is becoming a basic amenity, in the same way as water and electricity. Philly is the next to be online; with a 135 square mile network being built out by Earthlink and turned on next year. Not far behind is San Francisco with, you've guessed it, Google as one of the prime bidders. They believe they can take their successful advertising revenue stream to provide free IP access to the proletariat. On a brief aside the partnership of Google and NASA, can we expect to see Google in Space? With the benefits of WiFi access to schools, hospitals and police forces around the US it won't take long for a few well publicized examples of how access helped them for the ball to start rolling. I would agree with Paul that the secret to success is a partnership with the existing carriers. Otherwise the likes of SprintNextel could easily freeze the new comers out. Th...