Market cautiously optimistic on VOIP product from MOB

Stan Beer
Thursday, 30 September 2004 07:36

Business IT - Technology

The market seems to have greeted the release of a consumer voice over IP (VOIP) product by Mobile Innovations (ASX:MOB) with cautious optimism.

The share price of MOB has risen about 20% in the week since the announcement and appears to be holding steady at 20c on reasonable volume. However, with the tech wreck still burning fiercely in the hearts of many foolhardy investors, the market is still treating tech stocks like MOB with the utmost conservatism.

MOB has received most of its revenue from its Vodafone reselling and subscriber management business. However, the agreement with Vodafone is soon to come to an end after three years of litigation. Therefore, MOB is pinning its hopes on catching the wave of opportunity presented by emerging telecommunications markets such as VOIP. Its newly released consumer product, engin Voice Box, hit the shelves of mass market retail outlets Dick Smith Electronics, Powerhouse and Tandy last week. What the market will be looking for is evidence of solid inititial sales to indicate that consumers are ready to buy into the purported benefits of VOIP. If so, then MOB may have established itself as a company ready to move up a notch or two on the value scale.

MOB chief executive officer, Ilkka Tales says that the VOIP market is very much the company's future. Tales says, "Once we finish with Vodafone, we have no business unless it's this (engin Voice Box and the VOIP market). We believe there's a market opportunity for us. VOIP is much more affordable and offers more scope and functionality."

But is the mass market ready for a switch to VOIP? "We're going to find out," says Tales. "The biggest issue is the quality of our broadband service."

So far there is no indication of how well the product has been moving off the shelves of retail outlets. As yet, it is only available at selected stores. Tales says, "We're rolling it out store by store at this stage." He would not comment on sales to date.