Why CallVantage is not taking off

When news broke that AT&T divulged to the SEC its embarrassing subscriber figures (53K) for its Internet phone service, CallVantage, bloggers took notice. Joseph Laszlo, an analyst at Jupiter Research thinks the biggest issue was how the company overplayed its "we're getting out of the residential phone business" card last year. "That story was picked up widely by the mainstream press, and could only have confused people who would've heard AT&T's stopping selling residential telphone sic service, and is starting selling a residential telephone service, nearly simultaneouly sic. There's no reason to subscribe to a service if you think the service provider is shortly going to pull the plug on it," he said in his blog.

Gartner warned about this trap last summer in a vendor rating report that downgraded AT&T's consumer marketing from "promising" to "strong negative." Gartner said: "Its exit announcement (along with its competitors taking advantage of the move) will confuse customers. This situation will be partly offset by its CallVantage VoIP service. AT&T needs to quickly articulate a clear new consumer position." Apparently the company did not take the advice closely. But there are other factors too.

Tom Keating notes in his VoIP blog the lesson that being first in a niche market is more important than being the best, pointing out Vonage's 568,000 subscribers.

Burton Group's Irwin Lazar argues thatproviders should be touting lowercost andnot the fact that it is VoIP. "The average household IMHO will not buy a VoIP service unless it looks, tastes, smells, and acts just like the phone they have today," he said.

And last, but certainly not least, technical problems also have something to do with the slow uptake, but that may be something out of AT&T's control.