My opinion is that VOIP is the future for telephony. Just like previous digital technologies such as the digital camera, music CD's/MP3's etc. Whatever has benefits for the consumer over existing analog technologies from using newer digital technology will provail. Many companies will initially fail, however there will also be companies that are able to succeed and join the ranks of the big companies.
These technologies always take a bit of time to establish and gain the masses, then they take off. Then rendering the previous analog methods old fashioned, forcing the big companies to change their ways. People will never not be bothered with saving money, it's not in their nature.
I believe the VOIP service being sold on its own (ie, Sunrocket & Vonage etc) is not a good business model going forward. This is due to cheap entry and low pricing structure preventing any real profit, no matter how many subscribers.
I have followed Vonage since floating and must say, I have never and would never invest in the company. With the massive legal battle with Verizon over its technology, the future doesn't look good for them at all. But that is not to say VOIP is not going to prevail, just that these companies do not have the right circumstances to carry it forward.
Engin however have no similarities with these VOIP pureplays in the US. Engin have no outstanding legal battles, are diversified in the right markets and areas to ride the VOIP bandwagon into the future. They have plenty scope and time to keep diversifying other profitable ventures from advances in digital technology. Consumer benefits from Engins combined digital technologies will just keep increasing beyond just the savings of VOIP, ie mobile, tv etc.
The best way for me to describe Engin's model is they are using VOIP as a launching pad technology. That is their point of difference to other VOIP pureplays such as Vonage etc.
I can't help but think that the Engin shareprice has somewhat suffered due to what has happened since the US giant Vonage float. This is where Vonage founders motivations were to cash out on the VOIP hype before the reality of their VOIP pureplay business was about to become evident.
I have become very comfortable with Engin's business model since media company Seven took a major stake at 23c (premium to now). I can't help but wonder what Engin's shareprice would now be if Vonage was never floated. Also what Seven would now pay if they wanted to increase their holding as Engin has progressed rather nicely since then.
My opinion is that Vonage has been used unjustly as a VOIP benchmark, contributing downside to Engins share price. It's possible that this may now be starting to correct itself somewhat as this difference can clearly be realised.
Engin, not just a VOIP company even though they lead the field.
ENG Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
