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Why Stay with Old Telco When New Telcos Offer More?

One has to wonder why consumers and many businesses still stay with their “non-phone company” when today a number of service providers really want their business. These next-gen providers bring a wider range of services, offer better support and deliver telco-grade or better voice services. Many of the upstarts also have a dedicated focus on the customer as a person, not simply as a number and usually offer better pricing overall.

Granted, for some, staying with the old-line telco isn't a matter of choice. It's the only course of action. But for others, the options are there, and should be seriously considered. Today's post will explore some of those options, using first-hand knowledge and experience and by applying a market-segmentation approach to help decision makers know where to start. At the end many consumers and small businesses currently with the company "formerly known as “THE PHONE COMPANY" hopefully will be able to switch providers and move forward.  This post aims to achieve this by explaining who the ideal customer is for which provider using an interpretative approach to how the various service providers describe themselves today.

But before we get there, let’s look at some valid reasons why some consumers and small to medium size businesses are still using “Old Telco…”

1. No broadband. Ok, they're stuck.

2. Slow upstream broadband (legacy DSL). Well, you could try VoIP but it won't work very well. (Who keeps them captive? Yup, the old telcos)

3. You are a small business with decent broadband but you don't know where to look for reliable VoIP. See below.

4. You’re a consumer with decent broadband but you don't know where to look for reliable VoIP. See below.

This list is written by looking at suppliers that offer what the single-family needs at home all the way up to small to medium-sized business. It is not for those looking for a service provider that’s fully focused on the enterprise-size company or organization, though some of those listed can handle business of that magnitude, too. For me, the dividing line to work with the enterprise today means calls running over a managed network vs. the public Internet.  For many potential customers of old telco needing to switch, that’s not even a needed consideration point. 

How to Decide

Below is my list of which new telco style providers that consumers and companies should consider based on actual trialing of the services, either as a customer, a reviewer or knowing someone well enough who uses the service to see things work right.

Over the past 9 years I've likely trialed, used and played with many of the better-funded and now more mature VoIP and IP communications services out there, including Skype and the late, lamented GizmoVoice, both of which provide/provided phone company-like services without being a phone company. But neither offered E911, nor personal support, both of which made them “non-phone companies” under the eyes of the regulators and for this discussion. That removes Skype from consideration today.

For me, to be a real phone company, you must deliver E911, provide true LNP (Local Number Portability) and offer real-time, live customer support. Another deciding factor in picking a service provider has to include a deep look at customer service and what the provider’s churn is like. Consumer-focused Vonage was always noted for heavy churn, much of it voluntary -- customers deciding to leave due to call quality and support issues --  and, of course, a good chunk of it was also involuntary. Involuntary churn means getting disconnected for non-payment. Vonage seems to be improving in both call quality and support under current management, so it made this list. So did  publicly traded and business-market-focused 8x8, which has continued to reduce churn from what was already an amazingly low percentage.

Thus when it comes to where to put your business telecom service, look first for a provider with low churn and high customer retention, as low voluntary churn usually equates to high customer satisfaction.

Also look closely at support. In an era when Internet-based support is thought of as customer service, being able to talk to someone who owns the problem and accountability to solve the problem cannot be stressed enough. In the words of MasterCard’s ads, it’s priceless.

Beyond that, the determining factors have  to be the features you need today, and the capability to receive what you will need tomorrow. The offering needs to support the highest voice quality, deliver reliable and easy calling experiences, with standout customer service, technical support and easy-to-understand billing. 

The VoIPWatch Chosen

1. Comcast, Cablevision, Cox and Time Warner Cable (I'm sure others among the Tier One Cable Operators fit the bill) are cable operators that provide basic services that mimic what you can get from the traditional telco.

They all deliver a managed service, which means calls and sessions run over their owned network and are not using the Public Internet. Over the past few years, all the cable operators have begun offering business or @work services, starting with broadband. This very much is a direct take-away play from the telcos and one that needs to be looked at, but often is not the best choice as the services are more telco replacement of the bill and the wire, and not much more.

2. Vonage. Yes, surprise, surprise. While I no longer have a Vonage line, they've done a good job at providing consumers with cheap, reliable voice services over broadband and it works. Would I suggest it for your small business? Not really, if you need anything more than voice and voice mail, plus some basic services like call forwarding and call waiting, but they sure are a lot cheaper than the traditional telco. Perfect for the solo line user.

3. Broadvoice. I've had an account in the past, and always found them reliable and very competitive with Vonage, and offering more support and better capabilities. For families and businesses under five people, they are still a winner.

4. Now we're starting to get into companies that are oriented toward the Small Business market. is nimble and well run, and, best of all, they really are designed for the SOHO type of business, or the consumer who needs more capabilities from the  phone company. Other providers out there may offer the same suite of that may fit the bill, but dollar for dollar fits the bill nicely for SOHOs. That makes them the right choice for companies’ sized 10 people or less.

5. I've been an OnSip user for years. Their standards-based SIP platform works very reliably, but does suffer from one weakness. Their SBC (session border controller) is not up to snuff and I find issues when I'm in hotels or working Internationally. The service works very well and they are very supportive. Their browser-based portal is easy to navigate and their support of softphones, like CounterPath's Bria, makes them ideal for companies from that are sized from 3-20 people, but with the ability to go higher as their hosted PBX capabilities give you lots of value for the money.

6. 8x8--For small to medium business, and the growing mid-market, 8x8 has really nailed the complete proposition by market segment with their Virtual Office offering. Long before many others were trying to sell voice and video using the Internet, 8x8 was delivering that starting in 2002. Since then, 8x8 has also added many cloud-based enterprise-grade features, backed by a rich patent portfolio of their own. When you add in Polycom-based video, web collaboration, a browser-based portal for self management, plus a browser-based softphone, address book integration, the ability to have a business directory, rich voice quality, low churn and solid customer service, it’s easy to understand why their numbers are up and the reasons behind having a record quarter.

Let’s face it, when it comes to customers, large telcos are taking a longer time to fix what breaks, so unless you have a real, dedicated account rep going to bat for you, the time to resolve a problem for many is also a reason to leave. As a growing business owner, poor customer service is a deal breaker for me, because when something goes wrong, it needs to be fixed today. Not in four or five days. To counter this the cable industry, as a whole, has already spent millions of dollars to fix the perception of the “bumbling cable guy” making them their front line to customers. The approach changed the way cable companies deliver an experience making it more like the phone man of days gone by where consistent, reliable and trusted were how you described them. Oddly enough, the incumbent “old telcos” have now become more like the Jim Carrey nightmare character than what they once were.

The Omitted, and Why

I have left out three service providers that are all in the competitive space and are worthy of consideration:

1. RingCentral

2. PhoneBooth 

3. Grasshopper

These providers are mostly self-service platforms and are predominantly designed and positioned for businesses that want to appear to be bigger than they really are, or where price is the key factor. The three all seem to send that same message. This doesn't make them bad choices, but they may not be for every business person out there, especially those who like the idea of a real relationship with a company.

For large enterprise customers, service providers worth considering include TW TelecomTelesphereM5, Smoothstone (now West IP Communications) and TelePacific .  All focus on the enterprise market. In the enterprise, the deciding  factors are much different than in consumer or small-to-medium business segments, as everything from longer purchase cycles to  requirements varying company by company to the need for relationship-based customer service really take hold after the sale.

A closing note:  Back in the early days of consumer VoIP, AT&T's CallVantage provided me with the best experience around, starting with call quality. I recall my testing of CallVantage vs. Vonage, Broadvoice and others, including the AOL and original Earthlink offerings. CallVantage would always win. 

When I look at what's out there today, I still remember the great CallVantage experience and find that only and 8x8 are in that same "experience" league where call quality and ease of using the service really matter.

The bottom line here is when picking the new company to replace your “old telco” choose the one that right for where you’ll be as a company, by not choosing the new one based on what you had from the old one.




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Curtis Carmack


I think you missed a couple more reasons why people stay with old telco:

1. They are locked in by a contract – a newer, but becoming ubiquitous practice.

2. They have triple play or quad play and they would not save anything by dropping voice (typically the old telco's offering this practically give the voice component away).

Nice analysis and great info for those of us who may want to shop around! Keep up the great work.


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