Infrastructure
News
11/22/2004
04:38 PM
Connect Directly
RSS
E-Mail
50%
50%

Users Should Be Wary Of Fly-By-Night VoIP Service Providers

While hundreds of service providers battle for VoIP customers, users should be careful of low-cost come-ons.

While most businesses are just now considering how and when to move to voice-over-IP services, hundreds of VoIP service providers already are battling for share in a market that's showing strong growth. But business-technology mangers should be cautious, since not all of the service providers are expected to survive a forthcoming shakeout.

The competition is expected to intensify, says Chris Lewis, founder of VoIPAction, which runs an informational Web site on VoIP and has just published the VoIP North America Directory. The directory lists more than 400 VoIP service providers and more than 450 providers of VoIP networking gear for businesses and service companies.

The November decision by the FCC that VoIP services are interstate in nature and will fall under federal regulation, rather than state regulation, "clearly opens up the marketplace to even more competition, lower prices, and more consumer choice," Lewis said in a statement.

Most major domestic and international communications service providers are selling, or have revealed plans to sell, VoIP services to businesses and consumers. And more businesses are beginning to deploy VoIP technology to cut costs and better integrate their voice and data networks. A survey of 131 companies in October by the technology, media, and telecommunications group at Deloitte & Touche suggests that two-thirds of businesses will have started to deploy VoIP to the desktop by 2006.

Many alreeady have started. In an InformationWeek Research survey of 300 business-technology managers conducted in February, more than 80% said their companies are using (29%), testing (18%), or planning to deploy the technology. That level of interest in a relatively new technology has attracted a flood of vendors, ranging from those who make and provide equipment to build VoIP networks to carriers providing VoIP services to businesses and consumer.

Not all will survive, says William Stofega, a senior analyst at IDC. "There are going to be some that just aren't going to be around, even by next year," he says. "It takes money and expertise to do VoIP well. And it is difficult to compete against the large carriers that have network assets and a lot of technical expertise."

Large national and regional service providers offer a full menu of VoIP services, including hosted and managed services. Newer and smaller competitors tend to compete on price. "The big boys can provide just about everything, but you pay for that," Stofega says. He cautions business-technology managers to choose their service providers carefully and to resist jumping for the cheapest price. "When people tell you that you only have to pay pennies for telecom services, it just ain't so."

Comment  | 
Print  | 
More Insights
2014 Next-Gen WAN Survey
2014 Next-Gen WAN Survey
While 68% say demand for WAN bandwidth will increase, just 15% are in the process of bringing new services or more capacity online now. For 26%, cost is the problem. Enter vendors from Aryaka to Cisco to Pertino, all looking to use cloud to transform how IT delivers wide-area connectivity.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek - July 21, 2014
Our new survey shows fed agencies focusing more on security, as they should, but they're still behind the times with cloud and overall innovation.
Flash Poll
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
In this special, sponsored radio episode we’ll look at some terms around converged infrastructures and talk about how they’ve been applied in the past. Then we’ll turn to the present to see what’s changing.
Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.