Friday, March 18, 2005

No business in POTS replacement 

I already tried many times to explain why the POTS replacement business for VoIP providers does not work.

Aswath and Om Malik in his post "Maybe the VoIP Provider Model is broke" come to the same conclusion, also because of the Level3 ruling from FCC.

He ends with a very interesting statement, citing Aswath:

That my friends will be the end of Skype’s business as well, since this will take the money out of their money making business “SkypeOut.” Indeed dark clouds were gathering over the independent VoIP business.

Aswath Weblog: There continues the ‘bellheaded’ thinking that there is gold in POTS. With IP Communications there is no additional money in voice communications. If we reconcile to this, then as a group we will not be distracted by the gold rush and would be developing features that truly revolutionizes end-to-end communication.

That is what I and many others always said: do not simply do POTS replacement, develop features using the full potential of the Internet

I am not so sure about the "dark clouds" also over Skype, because the are the first ones to be on this new way. SkypeOut is only a leftover and Skype will move on.

Skype is permanantly shifting their business, from SkypeOut to selling numbers and getting termination charges via SkypeIn to selling phones or getting some royalties (they already started this business).

Just listen to Niklas:

"How exactly are you benefiting, assuming that you want to make money?
Look at Google. When did you last pay to use Google? Similar to Google, we offer a free service but charge for value-added services, such as SkypeOut and down the road for the Skype phone."

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