May 2nd, 2007
Vonage threatened as AT&T bundles VoIP with cell in two test markets
AT&T is starting to bundle its CallVantage VoIP service with its cellphone service.
The imminent three-month trial will be offered in two markets: a total of 14 AT&T Wireless stores in Portland, Ore. (my home town) as well as in Central New Jersey.
Legacy or new AT&T (nee Cingular) subscribers in those markets will be able to sign up for CallVantage at a $19.99 rate. That's $5 less than the prevailing $24.99 rate.
I see this as a move against the VoIP pure-plays such as Vonage, as well as a competitive strike against the prevailing local landline carriers in these new markets. Portland is served by Verizon and Qwest, and Central New Jersey is mostly in Verizon territory.
This is one of the first times that AT&T as we know it now, has launched high-profile competitive initiatives against the remaining two major landline service providers. Yes, I know CallVantage has been a competitor against Verizon and Qwest for years- but not in an in-your-face manner that this three-month trial will engage.
What's changed? Well, duh. SBC bought AT&T, took the name, and now is a different company much more than willing and able to compete in local markets dominated by competitors.
And as regards the competition against the pure-plays- this is yet another example of the true threat that multiple-service packages present against Vonage.
"We want to get a sense for how this sells," AT&T spokesman Michael Coe tells USAToday's Paul Davidson. "It's something that we will look to potentially roll out more broadly."
Russell Shaw is an enterprise computing journalist, analyst and author based in Portland, Oregon. See his full profile and disclosure of his industry affiliations.
