April 28, 2005

Would You Buy VoIP From This Man? [8:24 am]

Psst! Want Internet Phone Service?

Woodrow Cundiff is a born salesman. Like many others before him selling the likes of Amway, Tupperware and Avon products door to door, he has been waiting for the “next big thing” to pitch. And like others before him, he found it on the Internet: a newfangled digital phone service offered by a Canadian company.

[...] While established companies and consumer groups often look askance at pyramid selling plans, Mr. Birkeland said there was nothing intrinsically devious about individuals or small businesses selling an Internet phone service. Indeed, hundreds of tiny operations already sell long-distance service, phone cards and mobile phone plans.

[...] Experts doubt that these grass-roots sales efforts will topple the likes of Verizon Communications or BellSouth, which have tens of millions of existing telephone customers and billions of dollars to spend. But like the start-ups that sold cheap long-distance service after AT&T was broken up two decades ago, opportunistic entrepreneurs on the front line are making popular a product that many analysts say is the future of voice communications.

Nearly all of them will die, too. Like the long-distance market that the giant Bell companies now dominate, the resellers are likely to fade away once the Bells, cable providers and other incumbents start selling Internet phone service in earnest. These companies can bundle their Internet phone services with television programming, high-speed Internet lines and other products, while the resellers cannot.

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