What Happens When Anyone Can Be A Phone Company?

from the ma-bell-to-baby-bells-to-bells-galore dept

Forget Ma Bell or the Baby Bells. We're reaching a point where just about anyone will be able to become a "phone company." We recently mentioned the decision by Streamcast, the makers of the Morpheus file sharing application, to launch their own phone service by private labeling a VoIP service - effectively becoming a VoIP virtual network operation (a VVNO?). The Morpheus phone service is now getting set to launch. The company claims that they don't want to replace a traditional phone line, but just want to make long distance cheaper (which, let's face it, means replacing the traditional phone line). Still, what strikes me is that there's really no logical fit between a file sharing program like Morpheus and a phone-based VoIP service (there's is quite similar to Vonage). However, they're still offering the phone service, because they found a company (i2Telecom) willing to let them brand their service. This basically means that we're reaching a point where anyone could theoretically create their own phone company offering similar, branded VoIP. The potential there, is what could become incredibly disruptive for the phone companies. While they're still focused on providing their own VoIP services, what do they do when everyone can become a competitor? Especially when others start offering VoIP as a loss-leader for something else? What if Amazon provides me free phone service if I keep up a pace of buying a certain amount every month? How does a phone company compete? It's increasingly looking like phone companies may have to follow a similar path and simply realize that their phone service (using VoIP) should be a loss leader for a broadband connection into the home.

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