My ISP ate my telco, revisited
How things change. Back in March I sat befuddled as Dr. Kittel of T-Com told the analysts assembled at the DT day at CeBIT that DT would not launch a consumer voice product which offered a lower quality service for a lower price. I'm not insinuating that consumer VoIP is a lower quality product, but this seemed to be his view, and I was surprised at the dismissiveness of it, given the moves other incumbents were already making in this area. VoIP was pitched very much as an enterprise product, and that seemed to pretty much be the end of the story. Today T-Online revealed its long-term strategy to its supervisory board, including an ambitiously-named Ten Year Plan. Personally, I find this a bit unfortunately North Korean in tone, and more fundamentally, question how anyone can plan ten years out in this market.
Nevertheless, T-Online is now officially going to do VoIP. This was clearly on the cards in the wake of the Xten announcement, but the question mark for me was whether this would be a domestic, or purely foreign deployment (Club Internet in France was already earmarked). It is clear that this will be a key element of the domestic market defense strategy now, which seems to point to a change in attitudes within DT, and perhaps a shift of influence to the netheads (I guess the German equivalent of Bellhead would have to be T-head, since DT thinks everything should begin with T, preferably a magenta one). Even if DSL/VoIP bundlers like United Internet and freenet quizzically decline to disclose VoIP user numbers, DT must have looked at recent trends and come to the conclusion that there was a need for damage limitation measures. T-Online is also talking about organic growth in Spain and France, which seems to rule out the much speculated M&A activity. I assume that DT will follow FT's lead and move towards triple play in these markets as well, thus adding to my developing thesis that DSL/VoIP bundling for the incumbents is going to be defensive in the domestic core, and offensive in other markets - potentially a mutual assured destruction scenario.