Jack,
Thanks for your comments. You raise some good points, but my original point was not to compare AT&T with MCI. Rather, it's to evaluate QWEST's chances of using new VoIP technology to put AT&T or any of the traditional telecom vendors out of business as Paul Johnson suggests. I simply believe VoIP will have its greatest and most significant impact overseas, but in the US I have a feeling that its impact will be minimal because the US telecom market is already quite competitive.
If Qwest can offer 5 cents vs. 10 cents (and even lower), goodbye AT&T retail consumers (in droves).
There are plenty of vendors offering $.05/minute to the consumer market today (Telecom USA, etc...), but I don't see them leaving AT&T or MCI in droves. I disagree here. I believe the consumer market is even more brand-sensitive in many respects than the business market.
This brings us to the business customers. My company switched from AT&T to
MCI about 2 years ago, after having been with AT&T for years. Our (voice) call volumes started growing about 30% compounded annually in 1993 to the point that we are now billing close to 1 million minutes per month. In terms of monthly billing, we were one of the larger, faster growing customers in our territory for AT&T...<snip>...We anticipated LD rates declining and wanted a 1 year deal, they insisted on 3. We contacted MCI, and did a deal.
Again, my original comments were not directed specifically at AT&T and their responsiveness/flexibility. It sounds like your company switched because MCI was willing to structure a contract to your needs, not because of the lower price. AT&T is using the same technology as MCI--ATM. Their cost basis is the same.
The question I'm focusing on is can QWEST come in and steal business away by using a new (and reputably unreliable) technology and offering a lower price? I believe not. Incumbent telecom carriers (AT&T, MCI, Sprint, & Worldcom) can profitably offer reliable circuit-switched voice to US businesses for $.04-.05/minute. Even if QWEST can offer a 50% discount on this figure, I think the customer risks far more with the robustness and reliability of the underlying IP technology.
Contrast this with overseas where prices are on the order of $1.50 per minute in some areas. Yes, VoIP can have a significant impact here.
In a big way, companies like ASND are
putting tremendous pressure on AT&T to behave like they are competing, not the
800 pound gorilla they used to be.
By the way, AT&T is one of Ascend's biggest customers and will be using Ascend ATM as the cornerstone of all services including voice. Conversely, QWEST is planning on using VoIP directly on DWDM/SONET without any ATM to deliver voice services. In this sense, as far as the voice/data integration ideological battle, QWEST is in the Cisco camp, while AT&T is on the Ascend side.
bucky89 |
