The WSJ reports on the launch of Comcast’s VOIP service today. Initially the service will be promoted to up to 15 Million homes and within 18 months to the 40 Million homes will have access. They are looking for about 20% adoption within 5 years which would give them 8 million customers. VOIP is hitting the big time and the new phone wars are on!
“This is a growth engine we’re counting on for the next five to 10 years,” said Steve Burke, Comcast’s chief operating officer. Comcast decided that it would wait to roll out phone service until it could offer features such as call waiting and operator assistance, as well as 911 emergency service. The cable modems used in the phone service will have back up batteries so the service won’t fail in a power outage, a feature not offered by some early cable-based phone service.
Telephone companies have responded by offering discounted packages of services including television through alliances with satellite-TV operators. Over the past few months the two largest Bells, Verizon Communications Inc. and SBC Communications Inc., have announced multibillion-dollar plans to lay their own fiber-optic networks to deliver interactive TV and even faster Internet service. But those plans are only just being launched. Cable companies spent $65 billion upgrading their networks in late 1990s.
“The telephone companies are way behind the curve,” said Glenn Greenberg, managing director of Chieftan Capital Management Inc., a money-management firm owning over 20 million shares in Comcast. “It’s going to cost them a bundle of money to be the third one in the market to offer the same channels.” [WSJ]