Will A Price War Run VoIP Out of Business?

ElCheapo writes "News.com looks at the recent price war that has erupted amongst VoIP providers. How much lower can costs for unlimited long distance go before next-generation phone services run themselves out of business? How does this compare with free services that don't offer connectivity to the PSTN? Packet8 offers service for $19.99/month, a level analysts say is unsustainable. Vonage recently dropped their rates to $35/month to match VoicePulse. VoicePulse is known to use a softswitch based on the Asterisk open source PBX. Will open source allow startups to compete with the traditional LECs?"

Comments

Competition saves, regulation kills

[dada21]

It won't be competition that drives a market away, it is excessive regulation, government mandated monopolies, or a lack of desire for that service or product by the purchasing public.

I doubt that people will lose the desire to use VoIP, so that third occurence is unlikely. But government overregulating, or enforcing a company's "right" to be the sole provider of the service, both could happen (and probably will). I see ads on TV all the time for "$40 a month unlimited phone service!" but I know the last time I had such a deal, I paid $50 for the service, and $35 or more for all the government taxes and fees on top of it.

It is ridiculous.

I dumped my wired phone service because of these fees, and I am about to dump my cell phone service for the same reason. I have enough IP connectivity wherever I am that that I will happily switch to a VoIP company that allows me to transport my Wi-Fi based phone to any network and immediately get connectivity. But when they start getting taxed heavily, I'll move on to the next format.

Honestly, 80% of my communications have moved to instant messaging of some kind. Its loggable, it takes thought to write messages, and I can communicate with 5 seperate conversations at once. I used to use almost 3000 minutes a month on my cell phone, now I am down to 1000 minutes, but I send probably 10,000 text messages to various people.

I'm betting many of you will eventually drop the over-taxed, over-regulated services for ones that get the work done faster, cheaper, and with fewer government intrusions.