AT&T-Yahoo! voice partnership: alliance, cannibalistic, or both?

Is AT&T's new partnership with Yahoo!'s Yahoo's new instant-messenger service with voice a bit cannibalistic to AT&T's standard long-distance services?

Is AT&T's new partnership with Yahoo!'s Yahoo's new instant-messenger service with voice a bit cannibalistic to AT&T's standard long-distance services? 

Yahoo! doesn't think so. But I am not so certain of that.

First, let's look at the rates. Yahoo's new IM with Voice enables calls within the U.S. and to more than 30 other countries to be made for 2 cents a minute or less, according to Yahoo.

yahoomessengerrates.jpg
 

And American consumers pay $2.99 a month or $29.90 a year for the use the Phone In feature, which enables calls to your PC from traditional landline and cell numbers.

That's certainly cannibalistic with AT&T's $29.95 a month CallVantage service, which costs five cents more a month than Yahoo! Messenger with Voice costs a year.

On a rate comparison basis with AT&T standard lines, that's no comparison. Judge for yourself here:

attrates.jpg
 

Yahoo! doesn't see it that way, though.

"No, Yahoo! and AT&T don't see this as 'cannibalization,' "a Yahoo! spokesman told me yesterday. "This service is not intended to replace traditional phones services, it’s a feature of broadband service. If this were to be a primary lines replacement, like the Vonages of the world, Yahoo! would have to start adhering to federal mandates like 911 calling etc..."

That argument doesn't quite cinch the deal for me. I am sure that as actively as the Yahoo! phone service is being marketed, there will be those AT&T subscribers who might pause before that international or even regional call, do the math, and then opt to go the Yahoo! route.

The real factor that could even things out is how much AT&T is getting from Yahoo! for call termination and switching services. That could probably even out the math.

Until I see a strong case for backend call services bridging the gap between the Yahoo! Messenger with Voice and AT&Ts regular phone services, I'm not totally unconvinced that cannibalization is somewhat in play here. 

Newsletters

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
See All
See All