* Vonage extends its VoIP service across the pond
Looks like Vonage is reading the same tea leaves as your humble Convergence newsletter authors. Last week, we highlighted the rapid adoption of broadband in Europe – and before the pixels even hit your screen, Vonage announced it is expanding its VoIP service to U.K. residents.
When asked why the U.K. and why now, a Vonage spokesman pointed out that it too had noticed the rapid growth among consumers and businesses subscribing to broadband in Europe, and in the U.K. in particular.
Several other factors also contributed to Vonage’s decision. First, a common language (English) allows for easier customer support, including support from Vonage’s U.S.-based call center.
Second, a favorable ruling from the Ofcom (the regulatory agency in the U.K.) maintains that VoIP is an Internet service – eliminating some of the customary telco fees and taxes.
Finally, the relatively high-priced domestic voice service from British Telecom (BT) makes a Vonage service very attractive to consumers and small business. By our calculations Vonage residential customers can save about 50% and business customers can save about 40% when compared BT packages – even including the added cost of the DSL broadband connection needed for the Vonage service.
There are a few disadvantages in early deployments. So far, Vonage only has London-based phone numbers available, but – following the U.S. rollout strategy – Vonage plans to add other local numbers as market demand increases in other areas.
Since Vonage isn’t a typical carrier, 999 emergency services will be routed to the appropriate local authority; however, calling party location must be explained to the emergency agency. According to Vonage, this is a regulatory restraint and not a technical restraint.
All in all, we think competition from Vonage will force BT to re-examine its standard call rates, bringing benefit to both consumer and business markets.
