VoIP wars - the sobering reality

With all the excitement around Sykpe, GoogleNet, Apple's move to integrate the cell phone and the iPod that Om and John write about, it is easy to forget SBC and Verizon. BusinessWeek has a nice article on the two US communication giants. Post-ATT acquisition, SBC is expected to be $ 99 billion. Post-MCI, Verizon is expected to be $ 93 billion. Post respective acquisition, SBC and Verizon will control 80% of the corporate market.

Yes, domestic US long distance rates have been beaten down, but international rates are still wildly inconsistent. Try calling from one European country to another on a US cell phone plan. It is cheaper to fly thereWhen you see what corporations pay for wireless (cells, PDAs, WI-FI roaming etc), data services, videoconferencing and whole bunch more it explains why connectivity is still the single biggest line item in many CIO budgets.  For most families, the landline, cell, broadband cable and related equipment plans are a sizable "utility" spend - since the majority still buy connectivity on a fragmented basis.

So, yes new competition is good, and good old fashioned negotiation is still needed just as CIOs and regulators may be starting to feel sorry for the "BabyBells" and other national carriers.