VOIP Could Be Hurt By Deregulations

Canada is poised to deregulate the local telephone services and it could signal the devastation of the small VOIP providers. The Minister of Industry made the announcement recently that the move would benefit Canadian consumers.

The good news for the consumer today could mean bad news in the long run.

As the big telcos begin to get more aggressive with phone prices and begin to assert themselves more soundly into the VOIP market, it could harm the smaller VOIP companies like Vonage.

The telcos can charge lower prices for the VOIP services and make up the difference in other services. The smaller VOIP companies can not compete for the customers at the lower prices and eventually go out of business. That’s when the trouble begins for the consumer.

As competition begins to fade, prices will most assuredly begin to rise. Consumers are likely to find – too late – that the telcos really don’t have the consumer’s best interest at heart. The bottom line is going to win in the end.

VOIP companies can survive the deregulations by targeting niche markets. Business VOIP is an area that is ripe for developing. By finding and area that the telcos are not likely to engage, the smaller companies can survive the initial onslaught and be perched to take advantage of the unsatisfied consumer left in the wake.