The David and Goliath battle of the telecoms

Why are there so many small company’s bringing out VoIP services? Have you ever wondered why the large telephone service providers have not pioneered VoIP services for their customers? They make vast profits. Just what is it that holds them back? Just what is happening out there?

Anyone who uses VoIP services may well ask these questions and many more. Just what is the situation and why is it turning out the way it is? Looking at some of the events over the past few years will indeed answer these questions. Really we can go back to say, the year 2002, when any real VoIP service began in earnest. However from the standpoint of the large phone companies, the challenge they faced back then was the cable company’s, cell phone company’s and the like slowly eating away their customer base.

The fall in revenue from landline fees (around $20.00 per line every month) has been ringing alarm bells. This has resulted in these major phone companies being forced to spend billions on enlarging their networks to give support to such as internet access as well as television. All this in the hope of keeping their position from being whittled away even more and of course their profits. In this is the irony.

The more that people have turned to using broadband facilities, the more the opening came for small companies to spring up, utilizing this new technology. Patents were applied for, for the various VoIP systems being invented to utilise the high speed broadband internet. So all this now makes life more tedious for these large telecoms organizations as the small VoIP company’s have patented their VoIP systems. However, they are always dependent to a large degree on the networks connections of the large telecoms organizations.

Inevitably, from the innovation of such as Skype and Vonage, Verizon, Futurephone and many others there has been the expected skirmishes. In the USA in 2004 SBC sued AT&T for avoiding access charges by routing calls over its Internet backbone. Shortly after SBC acquired AT&T but retained the AT&T name, then went on to accuse Futurephone the VoIP company of similar tactics. That case is still ongoing. On the meantime Fututephone has ceased trading. We have also seen battles between VoIP company’s such as that presently going on between Verizon and Vonage. Verizon claiming Vonage is infringing on their patents filed. Leading the advance initially was Vonage with their technical advances but they began to loose innovation and became beset with a whole load of problems and lawsuits. The situation increasingly looks messy.

Whilst in the USA the large phone network companies are still digging their heels in when it comes to any serious attempt to establish their own VoIP for their customer base. They are increasingly watching with hostile eyes these ‘thorn in the side VoIP Company’s.

However, recently there has been a softening of attitude in Europe with Deutsche Telecom’s recent announcement that it is taking a stake in Internet phone services. It has done a deal with Jahjah one of the new start ups as Jahjah allows people to use the traditional landlines and cell phone net to make low cost calls. So there appears to be some ‘thawing of the ice’ when it comes to being friend or foe. This is a very significant change in attitude, but we have to ask, will this eventually influence or soften the likes of AT&T in the USA.

Another new company with patent pending VoIP is Global1touch. They also are going down the right road just as Jahjah. Their customers enjoy the use of both Internet connection as well as through the normal landlines and cellphone connections.

To sum up, the history of activity within the telecom industry clearly shows that the stance, the pressures and the desire to keep a status quo by the large telecom organisations clearly took their eye off the potential of VoIP to them. However, we could ask – are they letting them have all the difficulties and problems to solve and eventually snap them up at a price later? Who knows?

So who needs the soap operas of the TV when we get drama, power struggle, yes real live action right in front of our eyes. This all keeps out attention riveted in the real world. Who knows how the plot will turn out? What will be the next twist in the saga to emerge? Who would have thought that when you pick up your phone to make a call all this is going on – the battle between the David’s and Goliaths of the telecom world. Let’s face it we are talking of a Trillion Dollar Industry. No wonder we see all this intrigue.