Friday, September 14, 2007

A Look at VoIP from Packet8 CEO

Bryan Martin, the chairman and CEO of 8x8, was the keynote at the TMC IPT Expo in LA this week. He had much to say about the VOIP Bust going on.

“SunRocket is not the only company having problems. We know of about three or four major players in the space that have significant customer bases, they’re all into both business and residential applications, and we’ve heard rumors that they’re interested in exiting the market as VoIP service providers. There’s a list on the web of more than 100 companies that either have full-fledged services or at least websites offering VoIP services that have announced that they’ve shut down and no longer offer services, or else they’ve announced plans to do that within the next six months.”[TMC]

"Everybody uses Skype, but it’s not a complete replacement. Second, when you add in the fact that you must interconnect to the PSTN and that the PSTN is going to be around for a long time, and mobile phones are going to be around forever, then the cost of the interconnection to a carrier such as ourselves at 8x8/Packet8 is going up."

So the prices have to go up. No kidding! Then why is everyone, including Packet8 taking in SunRocket customers for the same rate as SunRocket?! Packet8 picked up roughly 9000 SunRocket customers at approximately the same $199 per year rate.

Further on, he discusses differentiation. Ha! Packet8 was profitable this past quarter due to many one-time charges. There filing even suggests that theur business customer revenue helps offset loses from the consumer division. What a model. 8x8 has been around a long time and has burned through some significant investor cash. I don't know if Martin should be sounding so confident. He hasn't proven his model yet either.

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