Section 5.1. Broadband Phone Carriers

5.1. Broadband Phone Carriers

Here's how marketing works, at least on one level: if you've heard of the company, they will charge you more money than will a company you've never heard of. A name brand charges more than an unknown brand or store brand. You see this every day at the supermarket, where Del Monte charges more for a can of green beans than the store brand with more or less the same green beans in the same size can.

On the flip side of this, vendors know they must attract customers one way or another. Building a name brand and national reputation is one way to attract customers. Vonage accomplished this with their constant advertising on TV and all over the Internet. To many people, Vonage is the only broadband phone company, and Vonage loves that.

If name brands (like Del Monte and Vonage) mean quality and stability, the best choice of other vendors is lower prices. Every person has a threshold price where they believe the newcomer with a lower price is worth trying in place of the name brand with the higher price. You have to decide for yourself where that comfort point is for you.

One person helping you decide is Joseph Laszlo, an analyst studying broadband phones for JupiterResearch (www.jupiterresearch.com). "There are a significant number of players at the flat rate of $19.95 price point for coverage of all of North America. It's tough to make a national brand sell for less money." Based on this quote, it appears the price of a national brand name is about $5 per month per subscriber.

Consumers are telling me, by their purchasing habits, that an unknown brand must charge $20 or less rather than the $25 or $30 charged by well-known national players like Vonage and the major cable providers. Does that price difference make you feel comfortable? In essence, the unknown brands will let you keep the $5 per month they aren't spending on marketing to get your business. As a bonus, they get cash flow immediately when customers start to sign up, without having to wait until their company name reaches brand name status.

Chapter 2 lists a variety of Vonage competitors, but there are hundreds, believe it or not. For this chapter, mentally replace the word Vonage with "generic broadband phone service" and you'll be fine in many cases. When Vonage offers something much better, or much worse, than the majority of their competition, I will mention that fact.

Comparisons between providers can change when one of the companies updates their web site or drops their prices. Before you call or go online to order a broadband phone service, check again the features you need and want, as well as the current offerings of the service that's most appealing to you.