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Monday, July 25, 2005

VoIP - consumers don't care about low quality

It is the typical encumbent thinking and really, it is amazing, how ignoring market leaders can be.

Everybody knows that landlines are far superior to Voice Over the Internet or VoIP services. Just try it and even with Skype, voice is still fading out,every now and then.

This is no reason for incumbent telecommunications companies to cheer and say that their model is superior and they will never be endangered.

Okay, the article doesn't put it this way, but indirectly indicates the fact by saying that Web-based services are inferior.

"Internet-based telephone services are still very inferior to traditional phone connections in reliability and sound quality, according to an extensive study that judged Vonage and AT&T CallVantage best among the top providers."

So what? There are customers that are happy with low-quality and sooner or later, those companies migrate upwards, entering the space of those dominant companies. And then, one can see those companies struggling, defending and giving up segments of the market to those new entrants. Want to bet?

Companies need to learn to listen to consumers, don't think that they know all, and try to define, what the consumer should think. This would be a recipe for failure - but a recipe still used much too often.

(By Asia Business Consulting)