Thoughts on AT&T's VoIP Strategies

We're taking a short break from the "Securing the Line" series to cover the recent residential VoIP news, specifically AT&T CallVantage.

AT&T recently stopped selling the CallVantage service to new customers within the last month, sparking concern from current subscribers that the entire service may be shutting down soon. Interestingly enough, AT&T has showed a marked change in reference to their marketing and sales channels, decreasing or eliminating marketing for the service in the last quarter.

So, the main question exists: is this a supply and demand response, or simply an internal reorganization at AT&T. When examining AT&T's history, it's important to note that almost all of its business channels have been subject to mergers and acquisitions, which is difficult for any company to sustain. On the other hand, AT&T would surely not let a highly-demanded service fall to the wayside if it was extremely popular and generating revenue.

I firmly believe that this recent decision is two-fold. First, residential IP telephony requires significant carrier investment. From aquiring DIDs nationwide, to upgrading IP connectivity and establishing effective QoS, to supporting the helpdesks and customer service centers who service customers, this simply isn't a cheap business. The break-even point for such a technology and service must be relatively high, since there is significant capital and labor investments required.

In response, the recent questionable stability of AT&T's various product and service lines comes into question. Especially in their wireless markets, which have seen renames and change-of-ownership from AT&T Wireless, to Cingular, and back, it's clear that AT&T's footing isn't especially strong in some markets. Residential VoIP is likely one of those markets.

Your ideas? Is this a sign of a Residential VoIP downturn?