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Sunday, April 24, 2005

In Future, Telephony Business Model Shall Imitate Email Business Model!!

Tom Evslin writes,"We can predict the future business model of voice calling by observing the past of email. Voice will be free regardless of location and duration".In fact with Skype or Vonage or a number of other services, calls between VoIP users are free today. "Free" is a great marketing word but it’s not completely accurate.If email were free, there’d be no such thing as the digital divide because poor people would be able to afford it.
In order for you to use free email, you or someone else needs to pay for:
1. Internet access
2. Hardware
3. Email software to run on the hardware
4. A host service which is willing to let you use its mail server to send and its storage to receive and save

Each of these four elements costs somebody something. Yahoo or Google or MSN/hotmail will host your email "free". There is no incremental cost for sending (or receiving) a second email once you have the capability of sending the first message. And, if you already have a computer and Internet connection for other purposes (or because your employer provides them),there may be no incremental cost at all for email. email usage has grwon substantially and become a mainstay of communication on the wealthy side of the digital divide. If we assess what is needed for "free" Internet phone calls, the following stands out:
1. BROADBAND Internet access
2. Hardware
3. VoIP software to run on the hardware
4. A host which is willing to let you use its VoIP server to locate the people you want to talk to and perhaps provide other services

As with free email, what really mean when we talk about "free" phone calls between VoIP users are calls that are free of any incremental cost once the initial investment has been made. There is no one who charges you for each email you send. There are no monopolies in email. Looking at how email works and is paid for is a great way to figure out how voice calls will work and how voice calls will be paid for and goes to conclde that the Retail Telco of future shall

- Look more like Skype or Vonage than AT&T, SBC, MCI, or Qwest
- Charges hard or soft dollars for services provided
- PSTN connectivity
- VM
- Identity
- Access charge collection and disbursement

The complete presentation is available here. Tom is brilliant and like most of the occassions, he is spot on here.The mistake of the telco biggies was to under evaluate the power VoIP will have as competitor to the voice line.As it is sometime that we know about VoIP ( and the big monopolies are using it since long) but not so long that the hardware have become cheap and the quality of voice is astonishing. Now reality is dawning upon them -slowly I should say.

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Sadagopan's Weblog on Emerging Technologies, Trends,Thoughts, Ideas & Cyberworld
"All views expressed are my personal views are not related in any way to my employer"