ENG margin has risen to 57% which is pretty decent provided they get costs under control.
VOIP as a telephone line offers user far more than just saving money, it allows them a flexibility simply not afforded to them with traditional PSTN lines. Such as the ability to go online and completely reconfigure services such as divert, messages to email, rotary function, sequential ringing, etc.
Adding a 2nd or 3rd phone line is done in just minutes, setting up a VOIP account overseas on a local STD number allows for infinite free OS calls for most VOIP plans.
The problem with VOIP is that is seen as the exclusive domain of the tech savvy, the challenge for all VOIP Telcos is to reverse this perception and simply market a phone line with lows costs and heaps of features that can either be user or call centre configured in seconds.
All VOIP Telcos have to date failed to capture the masses with the features offered with VOIP and have instead chosen to directly market to the tech savvy market or try to convince the general public based on the novelty concept of using your internet connection to make phone calls. The general public believe and accept that a phone will work over the internet but do they really understand how to set it up and do they really trust it? For the most part the answer is a resounding "No".
A good example of the failure of marketing the novelty concept of VOIP can be found in the Engin marketing expenses of the last 2-3 years, ENG spent around $3M advertising in mags, on buses, radio, etc. ENG has never made a profit and was losiing around $12M in each of the years that it spent that massive amount on marketing. At the end of the day ENG has just 64,000 customers.
VOIP telcos would do well to recognise that they will always have perception barriers for their products and should ideally all get together to find a common solution to their shared marketing problem. Perhaps an association of sorts that is funded by members to provide PR & solutions to the perception & growth problems.
ENG Price at posting:
85.0¢ Sentiment: None Disclosure: Not Held
