UPDATED: Verizon entered the consumer Voice over Internet
Protocol
the company’s consumer VoIP offering. The move is sure to challenge rival telecoms,
cable companies and startups.
Some phone companies have been cautious about VoIP over concern that the technology
would eat into their own landline customer base, an issue known as
“cannibalization.”
Verizon isn’t too worried.
“We see this first and foremost as an opportunity to grow the broadband
market,” Bob Ingalls, president of Verizon’s retail markets group, said during
a conference call with reporters. “Will [cannibalization] happen? Sure. But
we are also offering an alternative to customers who have left us.”
Verizon’s entry comes at a time when service providers, including carrier
AT&T , cable operator Comcast
and VoIP
upstart Vonage are fielding strong demand for the service.
Although there are less expensive packages, Verizon believes its reputation
for quality and service, as well as a strong Web interface for VoiceWing,
will give it an edge. In coming months, the company will also gear up its
marketing and advertising machine to promote the service.
In addition to seeing VoiceWing winning back erstwhile customers,
Verizon thinks VoIP, bundled with voice, high-speed data and, someday, video service, will prevent
defections to other providers.
A broadband connection breaks users’ voices
into data packets and sends them over the Internet or a private
network, thereby bypassing large sections of the legacy phone systems.
Consumers have been clamoring for VoIP, because it can cost significantly
less than traditional calling. New
offerings that tie VoIP into home Wi-Fi systems are also making the
technology more attractive.
The offering has become more feasible in the last year, as federal
regulators have signaled they will impose a light regulatory touch to
encourage its growth. The posture angered state officials who face the loss
of taxes that they are used to receiving.
There are still issues to be resolved to further VoIP adoption. First,
quality of calls is not as reliable as the circuit-switched network. Delays
and interference do occur.
“There is no VoIP offering out there that’s
going to offer the same quality [as traditional service],” Ingalls said.
The industry is still looking to perfect and standardize 9-1-1 service and
allow for law enforcement agencies to obtain taps.
VoiceWing is available nationally to
anyone with a broadband connection. The service includes call forwarding and detailed
call logs among other features. Phone numbers can be chosen from a list of
area codes in 139 markets in 33 states, as well as Washington, D.C.
For customers who also subscribe to Verizon’s DSL service, VoiceWing is $34.95 per
month. Those connecting through a non-Verizon link will pay $39.95 per
month. Discounts are offered to those who sign on before Oct. 31.
VoiceWing customers receive an adapter that allows them to use their own
phone with their broadband connection. There is a one-time set-up fee of
$39.95, and a one-time shipping and handling charge for shipping the
adapter.
The phone company is also planning a business
version of the service for 2005.
This is the second recent large consumer technology announcement from
Verizon. Earlier this week, the company
unveiled
new details about its strategic
fiber-to-the-premises (FTTP) push, including pricing, data speeds, future
markets and a launch date for television service. VoIP can also be
delivered over FTTP.
