Monday, June 30, 2008

The Future of Home Phone Service - Ari Rabban

For long-time VoIP followers, you'll likely know Ari Rabban. I've known Ari from my earliest days of tracking VoIP at Frost & Sullivan. He was with industry pioneer VocalTec for many years, and most recently is the CEO of startup

The company has an interesting pedigree, and I'll leave that for you to discover. My post is more about shining some light on Ari and what the company is up to. They recently launched a corporate blog, and I want to steer you to Ari's latest post.

In this post, Ari talks about trends he's been seeing to support the notion that landline telephony isn't going away as fast as you may think. Sure, there's a strong trend towards wireless substitution, but his point is that much of the landline loss hitting the incumbents is going to cablecos, not wireless operators. Furthermore, he points out to the launch last week of the @Home landline telephony service from T-Mobile. This made a splash not just because of the low price - only $10/month for qualifying customers - but because it's coming from a mobile operator.

Of course, Ari would be remiss not to also mention his own company, and in this case it's quite appropos. I've been trialing their Virtual Office service a bit, and it's a great alternative for small businesses, plus they have Home Phone as a residential offering. By all means, you should explore their offerings - they're a great example of how effectively landline services can be provided via the Web.

So, the main takeaway here is that landline telephony isn't going to disappear, and that when packaged right, VoIP can provide a lot of value. I still think voice is still a race to zero, but we're not there yet. As long as that's the case, I agree with Ari that there will still be a viable market for lower priced alternatives for voice service.

We all know how hard it is for any pureplay VoIP provider to make money, so the challenge is to maintain low operating costs and reasonable customer acquisition costs. In that regard, that's where the Web-based model of comes into play, allowing them to be a low cost provider. Once that's in place, it's really a marketing issue, and that's where the namesake comes into play. In the world of Web marketing, that's a key part of their brand, and from what I'm hearing, it's working pretty well. This is a different model, for sure, but in a Web 2.0 world, it just might work. I for one sure hope so, and to see for yourself, I'd suggest you RSS their blog.

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