VoIP in the home cranks up

It is important to have a very consumer-friendly VoIP system in order to keep prices down. “With VoIP, the more costs required for customer care, the more prices of the product are driven up,” he says.

The next six months will make a vast difference in terms of product simplicity. Engin is going after the consumer and cost-conscious small business. Despite sales of engin through retailers like Dick Smith, Tales says there are still opportunities for the channel.

“We’re actively building up a small to medium enterprise channel and a consumer channel. The channel’s very important to us to help acquire customers and we’re always looking for potential partners,” Carew says.

While broadband uptake is helping residential VoIP adoption, it is going to take a lot of evangelising to get the VoIP message out to the public.

Tales uses the US example where about 21 percent of the population have broadband -- about 30 million households. Australia has about 9 percent broadband penetration -- just over a million households, he says.

“In the US, companies like Vonage have been actively marketing for over two years now and they have about 400,000 customers out of a potential 30 million,” he says. “That gives you some idea of the amount of consumer education that’s still needed locally, but also the potential growth still left in the home VoIP market.”

Carew says the consumer market will yield good revenues. “The margins available to ISPs in relation to VoIP services are far greater than the ADSL and the dial-up connection, so it’s a very lucrative business for that partner market.”

It is not just a one-off product sale -- they stand to get a share of the revenue from the calls people make.

“The good thing for the channel with VoIP is that you can be an integrator but you can also virtually become a mini-telco in that you can receive call revenue from doing VoIP, depending on whose service you supply,” Carew says.

Engin’s VoIP product -- Voice Box -- has been available for some time, but earlier this month the company launched a new product called engin OneWay, which is an outgoing service only, Tales says.

To overcome some of the thorny issues with numbering, engin has another product called engin Switchboard, which offers a hosted service.

“Say a customer lives in Sydney but their family and friends live in Melbourne. They can buy the Switchboard service from us...and the cost is the cost of a local call. You can buy six or seven numbers around Australia, and we deliver calls to you via the internet into your voice box,” Tales says.

He says the company has done a lot of legal legwork and consultation with the Australian Communications Authority to ensure services they deliver are within the guidelines of the regulatory system in Australia.

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How those regulations around VoIP pan out will not be known for about six months. “The regulatory bodies should have some recommendations from the discussion paper through to the government by March...We’re certainly pushing for light-touch regulation [similar] to the approach they’ve taken so far,” Tales says.

As for some of the future challenges to providers of residential VoIP, globally VoIP is heading towards voice calls carried for free over the internet. “So from a pricing mechanism perspective, anyone’s pricing model that’s based on a ‘per minute’ basis is slightly flawed,” says Tales.

It is very much a volume game, not just locally but being able to build sustainable volume globally, because it is such a borderless world when it comes to VoIP.

“When choosing a partner for VoIP, you need to have someone who has some credibility, who can stay the distance from a financial perspective, who can scale up, and who you can trust,” he says.

“You need to make sure you have a reliable business partner, one that’s sorted out all the regulatory issues and complies, that’s well-funded for growth and who is taking VoIP seriously, not opportunistically.” 

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