Lately there’s been buzz on the inter-web about a new phone service option, Ooma. Their idea is to provide phone calls utilizing a peer to peer (P2P) network. That means everyone on the Ooma platform will end up sharing some bandwidth to facilitate calls.
The business model is different in that new customers will pay about $400 up front for the device and thereafter will be able to make calls for life within the United States without any additional charge. International rates are promised to be pennies per minute.
I have a couple of thoughts on this approach. First, I wonder what happens when the company distributes enough of its hardware and sales begin to slow. They’ll be making some money from international calls but will it be enough to sustain continued growth and innovation? Anytime there’s a steep up-front fee I’m a little hesitant, especially after my experience as a refugee from VoIP provider Sunrocket’s bankruptcy.
The difference here may be that the hardware will be independent and won’t require maintenance on Ooma’s part, which is the concept behind most modern P2P applications.
Another concern is with the competitive landscape. A product like this challenges the fundamental business model of traditional telephone companies and I would expect a strong response first with some sort of patent lawsuit, and later with innovation.
If you’d like a first hand account of what setting up and using the service is like check out Stephen Shankland’s post, My so-so Ooma setup experience on CNET.
