The PAYG VoIP model: Tesco launches

IanFogg | January 19, 2006, 05:09 PM

The UK's largest retailer, Tesco, today launches VoIP. Tesco already operates an MVNO and sells DSL broadband (based like most UK DSL on wholesale packages from the incumbent, BT).

For US readers, Tesco is the nearest equivalent here to Walmart. They are the retailer everyone else watches and operate an innovative online grocery business. Ironically, they are the leading player facing Walmart's UK operation, Asda.

We're publishing a major European report on VoIP next week which will examine consumer interest and innovative VoIP business models, so for now two quick observations:

1. Tesco's PAYG VoIP should work better in European markets conditioned to PAYG voice from the mobile sector, than in the US.

2. With all the telco talk of quadruple play, or multi-play... or which network technology to invest in, or which operator to buy, the non-telcos are just getting on with it and spending little capex to do it. Yes, that makes them more dependent on others, but they always retain the option to invest in infrastructure later on when the business case is stronger.