Marlon,

He did say he was selling to SMB, not Resi.
Very few small businesses are going to use Yahoo, AIM, or MS as a dial-tone replacement. Skype is free within the US now, so some will try that, but there are security concerns (growing daily) about VoIP, especially with the mandatory CALEA compliance.
(http://australianit.news.com.au/articles/0,7204,19495174%5E24170%5E%5Enbv%5E24169,00.html)

Weekly, ISPs come to me to offer VoIP. After the CommPartners mess, I stopped referring clients to anyone. You just don't know what the Wizard of Oz is really doing. Doing it yourself is difficult. When you take over the dial-tone of a business, you better make sure that you have 5 Nines of reliability with redundancy built-in, because if the phones are working, they are losing customers.

And, Marlon, you are correct - most VoIP Providers are NOT making any money. 4Q05 delta3 did $9.1M in revenue and kept $25k in income. MSOs are probably making $$ on VoIP because they own the network, charge a higher rate, and have fixed modems that mitigate the 911 issue. The top 7 MSOs now have 10M VoIP users.

When you consider that many CLECs like USLEC, FDN, ITC only have 25k customers and can barely eek out a living using wireline, you have to consider that VoIP may be difficult to profit on, too.

Many will tell me that they are killing it - profitably - but these same companies have less than 1000 broadband subscribers. At a 15% take rate, that is 150 VoIP users. That is manageble and using Asterisk and a CLEC PRI in a small region could be profitable, before scale, growth, and scope start to weigh you down.

Regards,

Peter


Marlon K. Schafer (509) 982-2181 wrote:

I still believe that there's no money in voip for the service provider. Not in the long term.

The money will be in the ability to offer good voip capacity but not the voip it's self.

Yeah, I know, there are people making money with voip. I heard that song and dance about hot spots too. IF you are one of the few out that with just the right model, capabilities, market etc. good for you.

For the rest of the WISP market, there's far more money to be made over the years offering transport. Especially if the trend for DSL and cable companies to mess up other people's voip continues.

Here's the real nail in the coffin of voip:
http://im.yahoo.com/feat_voice.php;_ylt=AlRactYLuOa7.Wxwqq5epPBwMMIF

And that's just ONE provider.  More are bound to come.

Marlon

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