Most cable companies view their nascent but rapidly growing VoIP-based voice services as cash flow generators. As a consequence, they don’t want to treat voice as a commodity nor do they wish to engage in price competition. But, Long Island-based cable operator Cablevision, which doesn’t always march to the industry’s tune, clearly hopes to snag market share by offering prices that are lower than those of competitors.
The company announced this morning a flat-rate plan for international calls that gives customers 500 minutes of overseas calls per month for a price of $19.95, or $.04/minute, cheaper than most comparable services out there. AT&T, for example, has an unlimited international calling plan that costs $49.95/month.
Joe at TechDirt is right on target when he says this move is probably just another competitive reaction to Skype’s free phone calling announcement and Vonage’s upcoming IPO. But Joe is probably (although not certainly) off the mark when he says that other cable operators will follow suit.
Cablevision continues to demonstrate that they get the appeal of the triple play. While other broadband operators think of it as a way to raise prices and tack on charges, Cablevision realizes that the appeal to the consumer is in adding features and cutting prices. Eventually, the other operators will have to realize that this strategy actually works.
Cablevision has gone its own way on a host of issues, including a la carte, while the rest of the industry has stood pat. Cable operators like their 40% cash flow margins on the voice business too much to starting cutting prices, or engage in price competition, just yet.
Cynthia Brumfield at 3:27 PM|Comments(1)
Cablevision is just stirring the POT over free publicity to generate MORE CONSUMERS to look their way and QUESTION why they pay the Verizon's of the world $50 per month for a PHONE that gives them nothing............Cablevision is just one smart cookie in generating """BUZZ"""====it got ME to comment right???? and YOUR RSS feed was picked up by thousands who study telecom............and Vonage and Skype all benefit when one VOIP company makes noise..........Verizon and ATT lose, Voip wins===game over!
Posted by: skibare at May 18, 2006 9:49 AM
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