First, the title of Om's post - "Are VoIP Service Providers Making a Comeback?". The focus of Om's post seems largely about my post, and I don't see how anyone could conclude anything about a "comeback" from what I wrote about. I could see that if I was talking about Vonage showing a dramatic turnaround in their numbers, but I'm not. And they didn't. All I'm saying is that the news from their Q3 isn't all bad - but they're far from being in "comeback" mode. And regarding Telio, the news has only been good - there's no comeback happening there - just more of the same positive momentum they've had all along.
Second, Om, I just wanted to say that my post was simply a comparison between Vonage and Telio, esp since their quarterly numbers came out around the same time. Nothing more, nothing less. It should be pretty clear that I'm not commenting on the overall state of "CVSPs" - because on that front I would agree with you 100% - I don't think they have much of a business model, esp if they try to go big. I certainly am not forecasting "sunny skies for them", at least not for Vonage. That should be pretty clear from my post.
Telio is another story, and it's hard to argue with their success and how well they've positioned themselves for the mobile market. I think they're way ahead of Vonage - or the other CVSPs on this front, and that's a key differentiator to me. So, I really don't think it's fair to conclude from this that CVSPs are a "great business". As a category, I don't think they are, but I do think Telio has got it right. Sure it's much tougher to compete in the North American market, and when you go on a large mass-market scale. No question. But, as I've often said, small can be beautiful, and with the healthy gross margins I noted in my post, it can be a great business, even on a small scale. I've always felt that the network operators will always win in the end, but you can certainly make a go of things with the right focus.
That's it, Om! I just want clarity here and to make sure people don't reach the wrong conclusions about my post. I don't see any "comeback" for Vonage, and it's not "sunny skies" for all these players. But I do stand by my take on Telio, and for that matter Vonage, and I've been pretty consistent in my views on them in previous posts.
By all means, may the dialog continue - from anyone who cares to contribute - that's what blogging is all about.
Technorati tags: Om Malik, Jon Arnold, Vonage