Price Wars Among Business VoIP Service Providers

If you’re like most businesses, price has always played an important role when deciding what telephony provider to work with.

Now, price isn’t, and never has been, the only point of consideration to take into account when selecting your telephony provider. You need to make sure your provider offers a reliable high quality business phone service, and you need to feel sure that provider offers a varied enough suite of telephony products to meet both your business’ current needs, and whatever needs it will develop as it continues to evolve. But, as long as these base-line points are hit, you will probably choose your telephony service provider based on price.

VoIP’s Low-Cost Rise to Prominence

The primacy of price was good news in the early days of Voice over IP services, as VoIP systems offered significant cost savings over traditional telephony systems from Day one. Add on the fact that VoIP products offer both superior service and increased flexibility over traditional telephone products, and it should come as no surprise to anyone within the industry that VoIP reached its current dominant position within the world of modern business telephony.

The prevalence and disruptive nature of hosted VoIP systems can not be understated. By 2008 alone a massive 80% of all PBX handsets being installed for enterprise-class users were VoIP-based, and that number has only grown over the last 4 years. It’s safe to say- within a few years there will be hardly any new non-VoIP PBX systems being installed in the world of business communications.

The overwhelming success of VoIP has changed how everyone in our field, and every one of our clients, think about price in the relationship with their telephony services. In the early days of VoIP, the price differences between this new telephony system and traditional structures were so clear that every VoIP provider could offer their services for essentially the same price. Back in those days, business VoIP service providers weren’t competing with each other, they were competing with large phone companies and traditional PBX vendors.

Yet these days, with those expensive traditional phone services rapidly phasing out, all of us VoIP service providers have started to compete directly with each other.

The Emerging Price War

Price wars are nothing particularly unique or surprising in the world of business, and it was only a matter of time before VoIP field became fiercely competitive. Relatively low entry cost and broad availability of telephony solutions based on open source made it easy to enter the field of business VoIP.

Overall, such price wars are a good thing for consumers. Competition forces providers to make their services as affordable and as accessible as possible. Price wars also spur innovation. VoIP service providers constantly innovate within their field and seek out new types of services and products they can bring to the market, improving the quality and variety of services businesses can choose from.

Yet there are a few aspects of price wars that aren’t positive for business VoIP consumers.

Price wars result in some providers making service costs less transparent. The more complex the VoIP service provider pricing is, the more difficult it is to compare it to competition. Bundling “free phones” into the price of many of the hosted PBX services makes it even more difficult to distinguish individual price components. Some VoIP service providers even choose to hide their prices from their prospective clients. Instead of making their prices as obvious and transparent as possible, they force their prospective clients to sit through long sales pitches and needlessly complicated explanations of services offered, all in an effort to confuse these prospective clients into paying more than they need to.

Most of the business VoIP service providers abide by honest, open, and fully transparent pricing for all of their products and service components. They understand that competition in this high tech field is not only about low price. In the end, it’s about the usefulness of VoIP technology, its features, its ability to evolve and, of course, the quality of service and support.