Do Cable Companies Have to Worry About New VoIP Providers?

Comcast, Charter, Time Warner - all are major players in the cable TV market and all have recently introduced their own phone services based on VoIP technology.  While true VoIP providers offer cost efficiency, these cable powerhouses continue to deliver the same technology at a higher price tag.
With more new VoIP providers emerging onto the scene at a rapid rate, observers are wondering if they pose a threat to the cable TV giants.

A Highly Competitive Market

The competition for telephone service is more intense than ever before.  Some of the old companies are still around but VoIP providers and cable companies are claiming their stake in the market as well.  When considering how cable companies are offering VoIP service at a premium price and remain very profitable, the appropriate question just might be, do upcoming VoIP providers have to worry about the big bad cable companies?  This has led some to wonder how they are charging dramatically higher price and getting away with it. 

Though it all boils down to personal preference, there are a number of factors that cause consumers to opt for broadband phone service with a cable company opposed to a true VoIP provider.  First, someone who lacks internet knowledge and is not familiar with VoIP or broadband internet phone can be easily sold by their existing phone service with a new plan that may be labeled something similar to “digital phone system”.  The fact that the new service is much cheaper than the current phone plan is usually enough to get their attention.  Secondly, some customers are uncomfortable switching to a VoIP provider and find it much easier to simply stick with a company they are familiar with.  Third is the unified billing structure a cable company offers, allowing you to pay for your TV, internet and phone services in one bill.  Even if it doesn’t equal cost savings in comparison to a genuine broadband phone service, the convenience factor can never be ruled out. 

The VoIP Advantage

Despite the loyal base of clients that prefer to do all their shopping with the cable companies, there are several more that have discovered the benefits of broadband phone internet phone services and made the switch.  VoIP providers have the clear cut advantage of being less expensive than cable companies.  Whereas voice quality was a major issue in the past, broadband phone services have come a long way, working out many of the kinks to deliver quality that rivals traditional phone systems. 

Another advantage VoIP providers have is purely geographically related.  Many locations in the world have broadband internet capability, yet not all the cable and telephone companies are equipped with VoIP resources of their own.   However, this is changing very quickly as more cable companies are actually teaming up with pure VoIP providers and leveraging the technology.  At the same time, broadband phone service providers are still able to offer more advanced features at a price the cable companies simply can’t compete with.   

The Battle Wages On

As it stands now, the major cable companies are still in a great position and may have the upper hand.  And even though broadband phone service from a true VoIP provider will probably always be cheaper, there is a large number of people who will merely stick with their cable company because of convenience.  That does not mean the VoIP providers aren’t gaining ground quickly, as more business and residential customers are catching onto the technology and taking advantage of broadband phone service.  Until something happens that really swings the momentum, we can hope that the competition will at least force VoIP providers to remain honest in terms of pricing and continue to deliver the benefits broadband phone service is known for.