Had a lengthy conversation today with VOIP Inc. CEO Steven Ivester, who believes the price of Internet telephony service will continue to slide to the point where "VOIP will be free". At first blush, this view does not appear to bode well for a company in which one of its four divisions sells Internet telephony service to residential and small businesses. Ivester, however, believes the real money will be in telephony features, and VOIP Inc. will be well-positioned as a hardware maker and wholesale service provider. Within the scheme of things, VOIP Inc. is a tiny player whose business prospects are far from certain. In the past year, it has jumped on the VOIP bandwagon through a series of deals that give a grab-bag of services and products. The unknown is whether anything in its portfolio is worth buying,
and whether it's good enough to survive competition.
Still, VOIP Inc. has one interesting thing going for it: it is publicly-traded, which makes it one of the few ways for investors to gain exposure to the Internet telephony market. Some of the other publicly-traded plays are VoiceGlow and 8x8 Inc., while everyone is waiting for Vonage to do an IPO. The contrast between the scarcity of VOIP investment players and all the hype surrounding VOIP is puzzling. Perhaps, investors and investment banks believe the big guys - Cisco, Alcatel, ILECs, cablecos, etc. - are going to dominate the market so backing small players makes no sense.