The VoIP industry has really taken off. Though this goes without saying, it’s good to look at the growing amount of users, interest, and companies. With this growth, features and systems have become more expansive, while cost has become more efficient. Yet, with a number of partnerships and acquisitions occurring amongst companies, many wonder what effect it will have on the industry at large. As providers merge how will service, cost, and quality be affected? Will features be dropped? How will the industry move forward as choices decrease? The list goes on and on. Yet, amongst these fears and reservations, there may be some silver lining.
Despite a somewhat negative connotation, acquisition may not be that bad a thing. Many companies use acquisitions to obtain new strengths and incorporate them to create a more expansive portfolio of offerings. A good example of this is Cisco’s purchase of Intucell. Cisco has an extensive array of products available; however, in looking to expand and strengthen their brand, they sought out a company, Intucell, that had something they did not—advanced mobile network capabilities. With their purchase, Cisco will be able to integrate all of Intucell’s features and thusly expand their product offerings. This example highlights a major advantage of acquisition: the expansion of service and offerings. With this, providers are able to expand their plans and offer users more options, capabilities, features, upgrades, etc. Additionally, this brings to light the fear of fewer provider options; however, that may not be so terrible a thing. Company mergers/acquisitions better consolidate features and products into an expansive portfolio—thusly, rooting out inferior or unnecessary providers. Unification aside, this could lead to greater cost efficiency as well. For example, if a user is employing two services for different features and the companies merge, cost may reduce under a unified banner.
In association with the above negative connotation is the stereotype that acquisitions lead to the dissipation of services. This is not the case. When companies are consolidated under one name the service/product retains its quality as its provider’s infrastructure is integrated instead of abolished. Users should not worry that their service will be terminated just because of an acquisition. Services will remain active until a user chooses cancellation. In combating this stereotype further, users, utilizing the flexibility of VoIP, are often able to add and drop services as needed. So, for example, if a user employs a provider that is bought out by a larger entity, the service does not disappear. Instead, the user options the right to retain or cancel as they see fit.
Though the above denotes the positives, there are fears and reservations as well. While the reduction of options can be helpful, many fear it may lead to a monopolization of industry. Though this cannot technically happen under law, it doesn’t mean that users may be subject to substantially less service, price, and product choices in the future. With fewer choices, the market shifts from a buyer’s market—where competition is healthy and prices lower—to a seller’s market—where there are fewer choices and less competitive prices. Aside from market concentration and demand, there is another possibility of costs being driven up. If a company offers a new service/feature they may feel inclined to bump their prices up to reflect their new offerings.
Acquisition is amorphous within the still growing VoIP industry. Though many look to a dark dystopian future of big providers and corporations, reality is far less menacing. Users can expect larger companies to buy out smaller providers that have a specific niche as they look to expand their portfolio or products and services. This is the same throughout any industry. While bigger companies like Cisco and Google absorb providers, acquisition occurs on a smaller scale as well (for example, VoIP-Pal.com’s 2012 acquisition of Digifonica). Though there are some potential disadvantages to be aware of, acquisition within the VoIP industry will ultimately lead to consolidation. Whether or not this consolidation is positive or negative is unclear; however, currently the positives outweigh the negatives.
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