If I'm Vonage, Cisco-Scientific Atlanta deal makes me reach for the Paxil

  On Friday, Cisco Systems announced it was purchasing TV set-top box manufacturer Scientific-Atlanta for $6.9 billion.

 

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On Friday, Cisco Systems announced it was purchasing TV set-top box manufacturer Scientific-Atlanta for $6.9 billion.

The companies say they will initially focus on solutions for cable operators who are planning upgrades best facilitated with cutting-edge set-top boxes, as well as telcos that want to enter the market. Just a bit further down the line, these boxes and accompanying Cisco hardware could let viewers do cool stuff like watch sporting events from different angles as well as participate in online chats with fellow viewers ("he looks like the logical murder suspect, but we're only 20 minutes into the show," defense was expecting a pass, so the quarterback should have called a draw play,"etc.) 

But these companies are not going to the market for the express goal of enabling their customers to show cool stuff. What it is all about for Cisco-Scientific Atlanta's cable operator and phone customers is even more enhanced service bundling, with more tiers than you can imagine.

Bundling? Sure. TV, Internet access, phone, cell (either direct or via alliances) and um, VoIP.

With Sci-Atl's set-top box expertise in house, the cable operators, especially, not only will be able to offer VoIP quadruple play but offer the type of enhanced television features I just mentioned. Maybe for another $9.99 a month.

So if I am a Vonage, or Packet 8 or VoiceGlo, I get real nervous right 'bout now. My cable competitors, especially, are coming after me with even more bundled services and cool extras than before, and will be able to market these at attractive bundled prices that when parsed, are lower than I can afford and still more than cover my subscriber acquisition costs.

At the same time, I might be just a bit wary that some of these same Internet access-providing cable operators might, want in their heart of hearts, to charge me carriage rights if I want my VoIP to be ported across their broadband networks. And are prepared to lobby to make it so.

And as I am pecked at from above by the full-service suite telecommunications giants, that generation of IM softphone providers is rapidly building PC to PSTN capability, and - as personified by today's debut of Skype in 3,000 Radio Shack stores - threatening me as well.

OK, now as a pure-play VoIP provider, maybe I am thinking, "do I need this?" Do I continue to go my own way, do I find smaller providers of related services I can partner with, or do I sell out?"

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