"You touch the telephone network, you die," analyst says of VoIP woes

FORTUNE Magazine's Stephanie Mehta was wondering what exactly it is that places independent VoIP providers like (Rest In Pieces) SunRocket, Vonage, and others at such risk.No big secret.

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FORTUNE Magazine's Stephanie Mehta was wondering what exactly it is that places independent VoIP providers like (Rest In Pieces) SunRocket, Vonage, and others at such risk.

No big secret. They don't own and control their networks, and are thus prone to routing issues as well as the health- or lack of health- of their contractors.

And don't let me forget the pure-play VoIP providers have to fight against service bundles from broadband providers.

As to this post's title, it comes from telecom analyst Daniel Berninger.  Daniel tells Mehta that for an upstart, "you touch the telephone network, and you die."

(Pix? That's Dan. Unlike some of the VoIPs he covers, Dan is certainly NOT lost at sea)

But then maybe this big picture is kind of Darwinian.

"As bankruptcies and closures proliferate there's going to be a flight to quality," Mehta quotes Rich Nespola, chairman and CEO of telecommunications consulting firm The Management Network Group as saying."That's going to favor the larger players."

Mehta adds that Nespola a;sp "says the stand-alone players in the consumer space, an even bigger challenge than high wholesale costs or lack of network control is the fact that they are flying solo. He contends consumers want bundles of service: broadband, home phone, mobile phone and even television. And they want to buy it from one provider."

"'The bundle is taking hold," he says. And that, too, favors the biggest operators.' "

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