The PhoneBoy Blog


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Voice, and What It’s Worth

This is a more thoughtful response to a posting by Aswath.

There are many people that belive that on an IP network, voice is just an application. I tend to agree with that line of thought. An application is only worth what people are willing to pay for it. If nobody is willing to pay for it, then it has no value. If people are willing to pay a premium for it, the application has a higher value even though a similar application may be much cheaper.

Let’s take voice. There are a number of ways to make a voice call. I can use my PSTN line. I can use my cell phone. I can use any number of Internet telephony service providers. Each of these mechanisms cost different amounts of money. For some people, Voce over IP is a cheaper, more cost-effective means for communicating than a PSTN line. Granted, Voice over IP has a similar limitation to a standard PSTN line: it’s not very mobile. From a fixed location with decent Internet connectivity, it makes sense to use VoIP.

A moible phone, however, is more expensive than using VoIP in many situations. That being said, people are still buying mobile phones? Why? Because the added mobility that a mobile phone provides has inherent value. Oh sure, the underlying voice communication isn’t all that much more expensive, but there is a price tag on mobility. The minute VoIP truly goes mobile–and I think we’ve got several years before that happens–we will start seeing price pressures on the mobile phone carriers like we are seeing in the PSTN voice market today.

Now on to Aswath’s point about click-to-call. While I am not a fan of AT&T’s “double-dipping” (i.e. trying to charge their customers as well as large portal sites like Google for passing traffic when Google isn’t an AT&T customer), if companies can make money doing click-to-call, more power to them. Those that are paying the premium believe that the “click-to-call” service has some added value. Those that aren’t either can’t afford the premium or do not see the value

My take is that the click-to-call model is ultimately doomed to failure. In the short term, I think it has some potential. In the end, I am for letting the free market decide whether this is a viable business model or not.


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