The PhoneBoy Blog

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A Different View on “Will VoIP Spur Broadband?”

I pointed Marcelo at my last blog entry. He was nice enough to respond and allow me to put it in my blog.

Very well written and reasoned — from a US perspective.

There’s no question that what drives broadband acceptance in the US these days is the simple fact that it makes no sense not to spend an extra $5-10/month to get broadband over dial-up. You don’t really need VoIP to justify spending such a small amount when the non-VoIP benefits of fast access are readily apparent.

This is not true in much, if not most, of the rest of the world where:

  • Broadband costs are still very high;
  • The actual usefulness of the internet (i.e.: email, web-browsing) is still not clear;
  • Telephone service is not available in some areas (though broadband internet access is) and, where it is available, costs are outrageously high.

Of course, I have nothing more than anecdotal evidence. But the bulk of our overseas clients buying in some quantity are ISPs. They tell me that VoIP is allowing them to sell internet service to new customers. Cheap and convenient phone service is a very effective sales hook.

I would also guess, that even in the US, VoIP spurs broadband usage among two specific groups:

  • Immigrants who call overseas a lot and have not yet learned the usefulness of the internet as we know it (if my parents were alive, they would be in this group; my brother’s in-laws from Taiwan, at my brothers urging, did get broadband for the first time in order to make calls home, and they use it a lot, though not to surf the web);
  • Businesses (and even some individuals) who acquire a second broadband connection specifically for us with telephone service.

Finally, if what we hope for does come to pass, that VoIP as a technology will offer capabilities that far exceed what traditional service is able to offer, I would bet that a large number of broadband holdouts will see no choice but to join up.

What Marcelo pointed out was important to point out again: phone service in a lot of countries outside of the US is high. It’s probably as bad as it was in the United States pre-AT&T breakup, perhaps even worse. This means there is a major economic incentive to try VoIP in many other countries, even with the relatively high cost of broadband.

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