Lookout Vonage Here Comes Comcast

By Davis Freeberg

In a press release this morning, Comcast said that they signed up 200,000 VOIP customers in 2005 and expects to add another 1 million customers in 2006. Lookout Vonage it looks like the 800 pound VOIP gorilla is starting to gain some momentum. Comcast has a huge advantage over the “traditional” VOIP providers because they can offer a level of convergence that Vonage can only dream about.

Currently, Comcast offers VOIP, cable TV and high speed internet access. They also plan on offering celluar service through Sprint later on this year. There are two major advantages to the convergence that Comcast can offer. The first is the simplification of your bills. Rather then having to make separate payments to your cell phone provider, your ISP, your phone company & the cable company, you can instead pay one bill each month. The second advantage is that they can make sure that all of your data services work together. If they are providing you access to your cell phone, then it’s in their best interests to allow you to program your Comcast PVR with that phone. They could also upsell you internet access and music services on the phone by including it as part of your “package” or through a separate subscription.

Qwest has offered a “grand slam” package using DirecTV for almost a year now and has seen some pretty terrific response rates to the campaign. For obvious reasons they are reluctant to provide VOIP access, but will quickly find that they need to discount their phone lines if they want to remain relevant in the telecommunications industry. AT&T; has also experimented with TV through the Dish network, but there are signs that their interest in the Dish network might be waning. Verizon has relied on expensive upgrades to defend their voice revenues and while their IPTV certainly looks interesting, there is still limited availability for the product.

I’m still not convinced that there will be widespread adoption of VOIP services, but for now it looks like VOIP is heading for a showdown between a monthly fee model from your cable or telecommunications company and between the free services like Skype, Google Talk and Yahoo IM. The more competitive that this market gets, the less attractive Vonage is going to look.