CallVantage Failure: Just Blame VoIP

After AT&T has finally announced plans to close down its failed CallVantage voice over IP service for existing users on Friday (it stopped taking on new customers last year), one news service blamed VoIP as a failed technology. 

"The approach held appeal for those wanting to save money, but problems with sound quality and reliability hampered the technology," one story reads. 

As evidence, the story points to the exit from the VoIP business of both AT&T and Verizon, which announced it was shutting down its VoiceWing offering last month. If it doesn't work for the telcos, it must be bad technology, right? 

Wrong. 

My VoIP services (corporate VoIP over a virtual private network and Vonage) seem to work at least as well as my land lines, and often better. Meanwhile, Comcast has used VoIP over its cable network to become one of the biggest telephone services providers, with 6.47 million customers (It claims to be the third largest U.S. phone company).

Could it be that the problem is with the telco business model, not the technology?

Neither AT&T nor Verizon could figure out how to market a lower-margin product that costs less than its traditional land line offerings and cannibalized its core business. The telcos still associate telephone service with a set of wires connected to the home, rather than just another service that rides on top of the home broadband connection.

Many people are cancelling land lines in favor of mobile phones. Twisted pair telephone service use will continue to dwindle as cellular wireless eats into the traditional land line business. But users will also continue to abandon traditional land lines in favor of hardwired VoIP telephone services.

Wired telephony services will continue. It just won't be your local telephone company that provides it.