No more consolidation in VOIP Industry?

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Have you noticed recently no more consolidation, takeover or mergers happening in VOIP space? What is the reason? Where is the Venture Capital Money going?

I have read many post recently who talk about Future of VOIP, VOIP is no more interesting kinda stuff. You hear that from Skype, which makes me mad. Who says there is no more innovation in VOIP? There is indeed and i am confident it won't be coming from the good old VOIP providers like Skype or Vonage. These companies are going to enjoy their retirement time soon.

After the Ribbit takeover by British Telecom couple of months back, we haven't really seen any action in VOIP industry. No more takeover, mergers, buy-outs, its suddenly a quiet space. Besides of course, companies spending more time for technology improvements. For that matter and for a change, lot less news from Jajah (i call them media monster, they release PR more than I write articles lol).

So where is all the money going? Why Venture Capitalist or Large Telecom companies are shying away from buying VOIP companies? Don't give me the obvious answer: Credit Crunch and Recession. I know this time around, Its different. Its all about the Money and it's hurting from bottom up. I spoke to a CEO of large telecom company in India and he said, they are targetting to cut down expediture by 50% by May by reducing employees and ad budgets. I personally think both are wrong choices.

Let me tell you why? I personally do not believe in the so called concept of "Cost Cutting by the way of employee lay-offs and Ad budget curbing". You lose the asset in either way. If you stop spending ads during recession, You will most likely to lose customers when the markets comes back to normal, coz the brand awareness is washed out. The best way to look at it is by buying ads when the rest of the market is doing the obvious. Venture Capitalist on the other hand waiting for the right "investment", which they will mostly likely not to find :-)

Unfortunately, you will see more fallouts in the VOIP industry than ever. There are many VOIP firms who will actually do well if they know how to exactly promote their services to consumers. It doesn't matter if its recession or not, every market has its potential and you need to understand it well.

I hope some of the younger companies actually focus more on building better technology during this tough time and expect to reap rewards when the market is back-up. Either way, VOIP is destined to replace your good old telephony line and even GOD can't stop it. PERIOD!

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