• by Jack Loechner , Staff Writer, October 24, 2004

The Last Mile Hinders VoIP Mass Market Proliferation

A new report from Global Advertising Strategies finds that VoIP marketing is shaped by agenda and audience, but is currently largely aimed at early adopters and should soon shift into more mass market-oriented messaging.

VoIP, Voice over Internet Protocol, is a protocol used to transmit information over IP networks (of which the Internet is one) To a large degree, VoIP served as a catalyst for the dramatic reduction in international calling rates

What connects a typical home to the telephone network is a wire that is often described in the industry as "the last mile." This is the copper wire that goes from the side of the house or an apartment building to the closest network hub. Or, a coax cable which carries video signals from a green suitcase-sized box or fire hydrant-sized cylinder on the curb to consumers' homes.

As an emerging technical system, last mile VoIP is just now moving from the Early Adopter to an Early Majority market stage, and thus players in this space invariably fall into an "Attract" marketing paradigm.

Key drivers for last mile VoIP emergence are changes in carrier environment, advances in technology, and general consumer desire to get cheaper telephone service plans with 21st century features

A major contemporary feature is the fact that VoIP allows end users to keep their home number forever. One company bases its entire strategy on this feature. It goes after teenagers by marketing to their parents the savings derived from getting a VoIP line instead of a second telephone line. It markets to students who migrate from apartment to apartment. And it markets to young professionals who often move from one place to another following their careers.

The report concludes that VoIP is going to hit the mass market this fall, and future marketing campaigns are going to have to widen their appeal as they shift to messages of value and differentiation and de-emphasize technology, in an attempt to make last mile VoIP appealing to a wider audience.

But, notes the report, VoIP providers are facing the following difficulties:

• The number of potential customers is growing with the broadband penetration rate, but still a lot of consumers of landline phones can not switch to VoIP.
• Technological glitches still exist and most of the providers have to constantly work on technical improvements. Moreover, most VoIP players offer their services only in certain geographical areas.
• Limited funding does not allow most of the players to promote their services to the wide population of potential consumers.
• A lot of people do not understand the concept of Internet phone and require a more persuasive argument in order to cut their landlines.

  Read the complete PDF report here.