The PhoneBoy Blog


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Who will be the biggest VoIP provider in 2 years?

This thread on DSL Reports pontificates on who will be the bigger fish in 2 years. I think people are missing a part of the bigger picture when it comes to VoIP.

Will consolidation happen in the VoIP industry? No doubt it will. I’m in no way suggesting there won’t be any consolidation, but I am suggesting it won’t suddenly collapse down to about 4-6 providers. There may be that many “heavyweights” in the industry, but there will contine to be a lot of smaller players as well.

The wonderful thing about entering the VoIP market is that the costs are relatively small compared to, say, becoming a traditional competitive local exchange carrier in a market. There are plenty of resellers out there who provide most of the backend stuff for you and all you have to do is point your hardware are their service. This brings the costs down further (though it cuts into the margins as well).

The big VoIP providers like Vonage and AT&T are going after the mass market, the smaller providers are going for underserved niches. And due to the relatively low overhead of the business and the type of niche you serve, you could have a relatively low number of customers and still make a respectable living running a VoIP provider.

Unless the government steps in and makes a mess of the regulations regarding VoIP that touches the PSTN, I think that there will be enough profit to go around. There will likely be fewer providers in two years, but probably more than you’d think.


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