The Google Voice integration with Gmail is just the latest nail in coffin as far as I am concerned. Copper wire telephone technology is now 125 years old, and is on a downward trajectory due to technological obsolescence as cell phones and VoIP alternatives become the communications vehicles for the younger generation.
The telco strategy in a nutshell has been to invest heavily in wireless to make up for the loss of their copper wire customers, and begin offering triple play packages of VoIP, internet and TV services to compete against VoIP only providers like Vonage and, more importantly, the cable companies who are aggressively moving into this space.
Until recently this appeared to be a solid game plan, with steady growth in wireless revenues due to subscriber growth and demand for wireless data services coupled with a healthy pricing environment.
However, the picture is now changing. The wireless market is starting to become saturated; growth is slowing for both voice and data services. This has trigger a brutal price war with AT&T and Verizon following Sprint's lead in offering reasonably priced voice and data plans. In addition, demand for monthly voice-over-IP plans has easily outpaced per-minute plans with much of the subscriber growth going to cable giants such as Comcast and Time Warner Cable.
To make matters worse, the spread of dirt cheap VoIP alternatives that can use the 3G or 4G data services provided by the telcos has given cost conscious consumers a way to place calls without adding minutes by upgrading to a more expensive service plan.
Google Voice has now positioned itself to be an even bigger headache than Skype. Having already annoyed wireless carriers by offering free text messaging and other services, Google has now offers free phone calls within the U.S. and Canada using a phone application built into Gmail. Google is currently offering this feature via PC-based web-browsers, but it is not a stretch to see them integrated this feature into Android based phones. Even if free calling remains a PC-only feature, it will still cause serious problems for wireless carriers by reducing the number of wireless minutes their subscribers use, and potentially eliminating the need for a landline connection.
Studies indicate the percentage of American households relying only on a wireless connection has soared from 15.2% as of March 2007 to 29.7% as of June 2010, and is only headed higher. Landline cancellations having actually picked up in recent quarters, and the nonstop bleeding for AT&T and Verizon in their local voice revenue bases will continue for quite some time. With the emerging wireless price war and the spread of rediculously cheap voice-over-IP services, the telcos can count on their wireless divisions to save their bacon from the gradual demise of their landline monopolies. It is an ugly long-term picture for these companies.
I'm not so sure the future is very bright for the cable companies either. I can easily see the telcos and cable companies reduced to competing for wireline and wireless Internet connectivy as all phone service moves to these cheap VoIP alternatives. In addition, I've spent much of the past two weeks watching US Open tennis on my computer. The purpose of this post was not to discuss IP television, but that is an emerging technology that will probably do to the cable companies what VoIP has done for the telcos.
The Grouch has disconnected all landlines into his house and now relies exclusively on google voice through his PC and a low cost cell phone.
You are absolutely right, there is less and less demand for landline & cable. But these companies are not really reducing their price to keep the customers. We are a cell phone only household too. I recently checked the landline price from AT&T for one of my neighbors, it is almost as expensive as a cell phone and it didn't even include long distance. He was a long time customer, retired, but paying almost $40 for a local line for a long time now. They won't even negotiate a lower price to keep him. I tried to keep it only for the 911 calls, but it was not worth the money. Now, he is all wireless.
ReplyDeleteI am considering purchasing an iTouch. One of the things in my to-check list is, if I can make/receive calls via google voice app in iTouch. If that works, I can use that as a phone wherever there is wifi and reduce my minutes to the minimum.
I would bet money it works on a iTouch, and you know it works on an Android. The telcos are in big trouble long-term.
ReplyDeleteHi , nice information ! I need information about Polycom IP 7000 AC , Nortel BCM200 4.0 and what are the features of these product.
ReplyDeleteWell, it was nice and inflrmative post about the trouble of google voice spells and it has been describeed well. Also, I have recently checked the landline price from AT&T for one of my neighbors and it is almost as expensive as a cell phone and that also not covers the long distance.
ReplyDelete