As the VoIP technology is maturing, we can see a plethora of companies launching their VoIP products. Not surprisingly, each has its own business model, which sometimes is quite different from a lot of others. Today, we try to look at the business models adopted by some of the big VoIP companies.
1) Advertising based VOIP: Advertising seems to be the business model for bulk of the VOIP providers on the internet today. Surprisingly, though, there are not too many of ad-supported VoIP products. Some of the notable exceptions are Click2Voice, thePudding, etc. Most of the advertisement based products are not complete offerings, in the sense that they have certain limitations. This could be restricted to certain geography (mostly within US) or they may have restriction on the length of call. So, if you were to use VoIP, relying on only these services may not be sufficient for you.
2) Phone based VOIP: These services hope to make money on the hardware that you purchase from them. Usually they bundle free calls for a certain period of time to certain locations and hope that you continue to use their offering beyond the free period and outside the free locations. Calls are usually free within the network, i.e. if both the parties have the hardware from the same company, the call is usually free. Examples in this category would be Ooma, PhoneGnome etc.
3)Pure VoIP: These are pure play VoIP providers that offer pure VoIP functionality. These can however be combined with hardware devices for added convenience, however that is not required. Players in this category usually offer the maximum geographical coverage. Some of the destinations are offered free to induce the customers. Free calls are limited and usually are available only if you pay for the base service. Players here make money on calls made outside the free locations and also when you pay for the base service. Prominent examples here are Jajah, Rebtel, TPad, Betamax companies like nonoh, voipdiscount, voipcheap etc.
Some companies have even extended the VoIP functionality beyond the desktop, to the mobile phones. This utilizes the data connection or the wifi connection to make calls. No free calls here, but isn't it the most convenient (only if you have a free or cheap data plan)? Examples here are Truphone, WiFiMobile, Fring, etc.
4) Pure hardware VOIP: These include hardware companies, which makes the use of the other VoIP service easier. These are not VoIP service providers themselves, but are hardware companies like Cisco. These companies make devices like USB VoIP phones, ATAs (e.g Linksys WIP 300, VoIP phones, etc. We will not get into the details of each, but for the sake of completeness, we can say that they enhance the usage of VoIP services.
5) VOIP Aggregators/Platforms/Others: These are not VoIP companies, per se, but they enable you to use VoIP more efficiently. This may include platforms like voxalot, mysipswitch, etc. Platforms allow you to combine several VoIP providers and utilize them efficiently. It may also include DID providers. DID allows you to receive calls directly from the traditional PSTN.
Well, none of these companies are here for charity, so it would be interesting to know how they do over a period of time and how their business models work. Meanwhile, I would request you to tell me how much have you spent on VoIP till date and on which category?
This article is written by our VoIP news editor Alok R. Saboo. Alok is pursuing his PhD in Marketing at the Pennsylvania State University.
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