AT&T VoIP: A Big Flop

Joseph Laszlo | March 18, 2005, 09:31 AM

CNET's Ben Charny observes that AT&T 'fessed up in a recent SEC filing to having achieved an abysmal 53,000 CallVantage subscribers as of the end of 2004.

Which, any way you slice it, is hugely disappointing. It's a sad day when Ma Bell can't sell a phone service. Over at Broadband Reports, they're attributing this to pricing, poor features, and technical details regarding the service's failure to work behind a home networking router.

I think there's some truth to those (the last one at least with the tech savvy amongst the VoIP potential audience), but AT&T actually started a small price war with Vonage, and blew a ton of money on some very good Olympics ads that should've paid off big time for them, if they'd followed through.

Having talked with a couple of folks in the VoIP industry about it, I think the biggest issue was that AT&T overplayed the "we're getting out of the residential phone business" card last year. That story was picked up widely by the mainstream press, and could only have confused people who would've heard AT&T's stopping selling residential telphone service, and is starting selling a residential telephone service, nearly simultaneouly. There's no reason to subscribe to a service if you think the service provider is shortly going to pull the plug on it.

Charny's piece also observes that "SBC has told federal utility regulators that CallVantage will continue to operate after the merger closes." Given that no carrier has ever said anything to a regulator during a merger approval process that they haven't followed through on 100% totally and completely, those measly 53,000 customers can certainly rest easy.