Heavy advertising by Vonage has “educated the market” by promoting VoIP calls as a cheap substitute for traditional telephone calls carried by such major network operators as AT&T and Verizon, said Nicholas Kyriakides, vice president of product and consumer operations at netTalk.com and son of the company’s founder.
NetTalk.com’s rivalry with magicJack is more heated. NetTalk.com and magicJack are similar in that they charge annual fees for VoIP telephone service, while Vonage charges monthly. The Miami company and its rival in West Palm Beach also have fought in court over patent infringement claims. Even the ring tone on Anastasios Kyriakides’ cellphone, a rousing rendition of the song Hit the Road, Jack, underscores the intensity of his company’s competition with magicJack.
NetTalk.com appears to be on the right track by diversifying its consumer offering beyond cheap phone service. “We’re finding more and more that consumers are looking for bundled service packages that not only do voice. You can get video, you can get branded data, that sort of thing,” said Mike Jude, a Denver-based program manager with consulting firm Frost & Sullivan.
In techie terminology, netTalk.com is one of many “over-the-top” providers of not just telephony but also video streaming and other digital services. “It just means you’re providing a service over the top of somebody’s broadband network. It can be any kind of service, really,” Jude said. “Netflix, for example, is an over-the-top video provider. NetTalk is an over-the-top voice provider.”
Voice bundled with video and other digital services is likely to prove competitively superior to basic phone service. “As long as over-the-top voice is a discrete service that people can subscribe to, it’s not going to be a major factor in the market,” Jude predicted. “It will continue to be a niche player, and it will continue to carve out a larger niche.”