VoIP market getting tougher

By Stuart Corner
Monday, 03 September 2007 06:12

Opinion and Analysis

Two of Australia's largest VoIP service providers - engin and My Net Fone announced their full year results last week, just as gotalk announced new VoIP offerings significantly intensify price competition in the market.

Gotalk's latest VoIP plan, the go VoIP Aussie pack, offers unlimited (subject to fair usage policy) calls to standard local national and mobile numbers for $14.95 per month. Calls to mobiles have been the big ticket item on other VoIP plans which offer untimed calls to local and national numbers. My Net Fone, for example charges 20 cents per minute for calls to mobiles and Engin 22 cents per minute. At these rates callers would spend their full monthly fee for the gotalk service making just one five minute call to a mobile every other day.

It seems likely that these VoIP providers will have to follow gotalk's lead, but at a significant cost to ARPU.

Engin and My Net Fone now have quite different focuses: My Net Fone is a straight VoIP service provider, but Engin is morphing into a triple play operator following Seven taking a 33 percent stake in the company during the year and Engin planning to distribute the TiVo PVR for which Seven has the exclusive rights in Australia. It has signed up to resell Optus 'naked' DSL services.

Engin opened the announcement of its results not with a boast about revenues or subscriber numbers, but by saying: "The year to June 2007 was a period of planning and preparation for the move beyond standalone voice to the 'triple play' service offering announced by the company on 12 June 2007, encompassing a broadband access solution, broadband telephony and the TiVo service. This was not surprising: its growth was way below what it was forecasting a year ago, and compared to My Net Fone's, achieved at high cost.