SOURCE: Pike & Fischer

January 30, 2007 16:11 ET

Cable Operators Cutting Price Gap for Internet Phone Service

SILVER SPRING, MD -- (MARKET WIRE) -- January 30, 2007 -- The price for cable telephone service is starting to fall to near that of the low-cost independent Internet phone services, as cable companies offer discounts to customers who also agree to buy TV and high-speed Internet service, according to a new analysis by market research provider Pike & Fischer.

By using this so-called "triple-play" or bundled-service approach, cable operators are bringing the prices for voice-over-Internet-Protocol service, or VoIP, within as little as $10 per month over leading independent services such as Vonage, Pike & Fischer has found.

And as VoIP usage expands from early adopters to the mass market, independent providers such will be at a fundamental disadvantage, since they cannot guarantee the same reliability and ease of use that a cable company can deliver, the report concludes.

"Cable VoIP pricing is likely to make it increasingly difficult for independent providers to win market share, especially as VoIP adoption expands from early adopters to mass market users," said analyst Mitchell Shapiro, author of the report. "The non-techie users will demand greater reliability, minimal learning curves and the convenience of receiving their voice, video and data services from one company and on one bill.

"Cable's advantage in the mass market VoIP space is likely to become even greater as operators introduce 'converged' services such as 'Caller ID on TV,'" Shapiro adds.

Pike & Fischer, a BNA company, offers a host of legal and business information products covering the telecommunications industry. VoIP Deployment and Strategies Update: Residential VoIP Pricing is priced at $345 and can be purchased at www.broadbandadvisoryservices.com. For analyst commentary or an executive summary, contact Scott Sleek at 301-562-1530, x291 / ssleek@pf.com.

For more information about Pike & Fischer's Broadband Advisory Services, visit www.broadbandadvisoryservices.com or contact Jonathan Wentworth Ping at 212-576-8741 / jping@pf.com.

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