"AT&T is the bellwether," Arnold said. "So far, the market has all been about startups. This is the first time a brand name has come to market with money, mindshare and serious money behind it. So, everyone is watching AT&T. At the end of the day, I believe that its the marketing and not the technology that makes the difference. "In the Planet of the Apes scenario ten thousand years from now, when they unearth the Statue of Liberty and dig down to see the civilization we left behind, the thing theyll discover is that Vonage [Holdings Corp.] created a brand. But AT&T has the brand, and they have millions of customers, and I dont think they can afford to fail."To take a simple example, consider VOIP plans aimed at broadband-equipped Portuguese speakers, with flat rates to call Portugal and Brazil. Companies such as Primus Telecommunications Inc., with large international networks, are well-positioned here. Indeed, part of their offer is an all-you-can-dial plan that includes most of western Europe. Click here to read about a flat-rate VOIP calling plan from Primus. Epstein agreed that theres room for many players in a very large and fragmentable market. "There are over 188 million landlines in the USA and over $100 billion spent annually, to say nothing of the $900 billion in telecom revenue globally. A half-million lines will suit us quite well, but we are not going to stop until we get at least a million." AT&T now competes for VOIP customers in 22 states and 72 major markets. Newly served regions include Wilmington, Del.; Indianapolis; Muncie, Ind.; Kansas City, Kan.; Baltimore; Minneapolis-St. Paul; St. Louis; Charlotte, Greensboro and Raleigh, N.C.; Omaha, Neb.; Philadelphia; Allentown, Pa.; and Chattanooga, Knoxville and Nashville, Tenn. They also launched in Jersey City, Monmouth and Trenton, N.J.; and in Albany, Buffalo, Glens Falls, Rochester, Syracuse and Utica-Rome, N.Y. After the six-month introductory period, the service retails for $34.99 for unlimited dialing in the United States, Puerto Rico and the U.S. Virgin Islands. In addition to the traditional phone features of call waiting, three-way calling and call forwarding, the VOIP service will offer browser access to call logs, nine-person conferencing, do-not-disturb and find-me functions, and follow-me call routing settings. Other typical VOIP enhancements include browser-accessible voice mail and click-to-dial phone lists. Subscribers are sent self-installable telephone adapters from D-Link Corp. and other manufacturers to digitize, compress and packetize their voice for IP transport. Check out eWEEK.coms VOIP & Telephony Center at http://VOIP.eweek.com for the latest news, views and analysis on voice over IP and telephony.
Arnold said he doesnt mean to imply that the household names will win all of the spoils in consumer VOIP. "Theres room for everyone right now," he said. The very ability of IP addresses to target market niches, regardless of geographic location, make it feasible for VOIP providers to offer profitable and even creative calling plans to subscriber bases as small as half a million.