Am I Gushy??

My VoiP News quotes Om Malik, Jon Arnold and myself, about the future of VoIP. He describes my post below as gushy… To the contrary I think we all agree on the facts. VoiP is a profitable business – if you have the customers or a cheap way of acquiring them.

In the long run I believe that applications and features will be the real differentiators. If Vonage continues their crazy growth without bringing online new applications there is no way they can succeed. However if they change directions, there still is hope, I hope!

This is a discussion that has just started as Ken writes in Realtime Community today, and I am sure we will be hearing more from people smarter and more experienced than I. Personally, I am very curious to see how the conversation and of course the business will develop. Will VoIP change the communications landscape or will the duopoly continue to rule albeit with new technology??

Vonage results prove – VoIP is a great business!

Andy refers to Jon Arnold’s detailed analysis of Vonage vs. Telio. The interesting point for me is that it turns our that VoIP can be a very profitable business – if you have the customers…

Lets look at the figures. Vonage spends $6.86 per line on direct costs and $29.79 on subsidy of the ATA. Their ARPU is $26.33. WOW – this is some business. Income of $315.96 a year, costs of $112.11 (including ATA subsidy) a year. Gross Profit = $203.85! All this is great if you have the customers or a cheap way of acquiring them. But if you are Vonage and you spend $1m a day (!!!) on advertising and have a 2.6% monthly churn – you are in a problem.

Now lets say you are a cable company, or some other organization and you already own the customers – then you have a real cash cow on your hands! Remember the more customers you have = more pure IP calls = lower OPEX costs!

I don’t know how many of you noticed, but since IDT bought out Net2phone they have reintroduced the Net2phone “Vonage” offering for only $19.99. When you look at the figures above you can understand why.

Now lets go one step further and add interesting applications and features – no one will be able to stop you. The big question is can Vonage turn the plane around in mid-flight?

Zero Inflation!

It was announced today that inflation in Israel for the past 12 months was -0.2%. That together with one of the highest growth rates in the West (over 6%), makes me wonder how we would do if we were at peace….

And to think that in 1984 we used to run to the bank twice a day to beat  inflation which was 30% a month!

The Skype Business Model ???

A year has past, and everyone and their sister are trying to figure out why the smart people at eBay spent so much money. After all the reasoning goes, If eBay spent over $4b, they must have a plan…

The International Herald Tribune has an in depth article and top bloggers like Mark Evans ran some numbers in an effort to justify the mega deal. Mark ventures that if Skype grows only 25% a year – their gross revenue in 2011 will be $675m, mostly from calls to the PSTN. Not such a great return on a $4b investement but still something.

I don’t buy that. Meg Whitman and crowd must know that revenue from termination on the PSTN will decrease as IP calls proliferate – there must be some other strategy! Come on Meg – give us a hint!

Responsibility and the Three Monkeys

Yesterday saw the 2nd resignation of a senior officer in the IDF as a result of the recent war. Maybe someone can explain to me why is it that when a company loses millions due to mistakes by management, the CEO is out the door, But when the leadership of a country allows a terror organization to build their infrastructure 10 meters from the border, they continue on as if nothing happened???

Gen. Gal Hirsch who resigned yesterday was one of Israel’s brightest and original commanders and was seen by many to be a future Chief of Staff. If Gal has to go – what about the politicians who led a policy of the three monkeys??

Goodbye Don!

I just saw on CNN that President Bush has asked Don Rumsfeld to resign. Personally I have fond memories of Don starting when I was a kid in the 60s and my father who was an active Republican hosted a parlor meeting for him in our home in Chicago. Over the years we followed his rise in politics and we were happy to see that he was a constant supporter of Israel and it’s right to defend itself.

Unfortunately Don got caught in a no win situation (the idea to bring democracy to an Arab country is sorry to say, a non starter) and was sacrificed due to the Presidents falling popularity. That is life…

The Maeirs wish you the best of  luck!

Thanks Alec!

Alec Saunders, superblogger and CEO of the Voice 2.0 company Iotum was interviewed yesterday by Ronald Lewis. Alec talks about Microsoft, Asterisk, Iotum’s technology, the future of VoIP and more.

Alec relates to the future of telephony and how we will see the long tail phenomenon developing. As an example he explains in detail how we at the Flat Planet Phone Company are taking advantage of this phenomenon. While I do suggest you listen to the full interview above, if you just want to listen to the 3 minutes about the future of telephony and where the Flat Planet Phone Company fits in press here.

I have learned a lot from Alec’s posts in the past and I really appreciate his mentioning our work. Thank you Alec!