AT&T Hangs Up CallVantage, Dials Up U-verse Voice

Standalone VoIP Services Facing Financial Problems

While movie heroes make landing out-of-control airliners look almost effortless, AT&T Inc. (T) and some other telcos are struggling just to pull their standalone VoIP services out of a revenue nosedive.

The latest indication of an adjusted VoIP flight plan was the recent revelation (first reported by xchange) that AT&T has stopped taking new orders for its 4-year-old, public Internet-based CallVantage VoIP service.

On the CallVantage page on its Web site, the telco posted the simple message: “We will continue to evaluate our AT&T CallVantage service and remain committed to providing leading, next-generation voice services for today's consumer and business customers.”

The Web page did not provide additional data, but did direct those seeking information on other AT&T products and services to its corporate homepage. The company declined to comment on the future of the service and its subscribers.

In any case, with free and bargain-basement standalone VoIP services from the likes of Skype, Vonage Holdings Corp. (VG) and others, competing on price in this space is clearly a no-win situation for AT&T and other telcos. And it’s not working out so great for some of these competitors either. On Aug. 19, Vonage reported it added only 2,000 subscribers [net] for the second quarter of this year, for which it posted a $7 million net loss.

However, analysts note, combining and integrating higher quality VoIP with other services does hold promise.

“Vonage-style VoIP services from telcos are dead because there’s no way to sustain pricing and profit levels,” said Tom Nolle, president of CIMI Corp. “[Telcos] need to bundle wireless/wireline, offer extra features, etc., so that they can keep from falling into a pricing spiral.”

And that’s precisely what they’re doing. In January, AT&T completed its triple-play bundle with the launch of U-verse Voice, which includes features enabling wireless integration. The telco says U-verse Voice and AT&T wireless voice mail are combined with U-verse Messaging, which provides a single voice mailbox that can be accessed from any phone line or PC. Another feature AT&T touts is U-verse Central, an online-management portal that lets customers manage call preferences, voice mail, contacts, call history and more from any PC, in addition to the ability to control call preferences from their home phones.

U-verse Voice now is available in several cities as part of the U-verse bundle. But, it should be noted, U-verse services are far from being available throughout AT&T’s region. As of AT&T’s second-quarter financials call, U-verse TV was available in roughly 55 markets in the telco’s territory. And in addition to its limited availability, there is a big question as to whether those using standalone VoIP service will step up and sign on for the U-verse bundle, which includes high-speed Internet as well as U-verse TV.

As for CallVantage, Nolle believes AT&T will try to phase it out over time. “...[But] they need to be careful not to alienate any users,” noted Nolle. “Everyone may not be able to get U-verse voice.”

Related Articles:

Goodbye AT&T CallVantage, Hello U-verse Voice?

AT&T Adds Softphone, Video Conferencing to CallVantage

AT&T Tries to Lasso Qwest, Verizon Customers

Share this article: Email, Slashdot, Digg, Del.icio.us, Yahoo!MyWeb, Windows Live Favorites, Furl
Add this article feed to: RSS, My Yahoo, Newsgator, Bloglines