By Robin Gareiss, Nemertes Executive Vice President & Senior Founding Partner

January 18th, 2004

Last week’s decision by Comcast (NASDAQ: CMCSA) to offer voice-over-IP services is welcome, but let’s be frank: It’s long overdue and the proposed monthly rates are too high to entice businesses to change from traditional phone services.

Comcast will gear the bulk of its marketing efforts toward consumers initially, but there are millions of telecommuters, retail stores, and small offices that also could take advantage of such an offering if Comcast responds to their needs. It’s taken the first step by offering a VOIP service over a privately run IP network, rather than the public Internet, and by providing battery backup.

But error No. 1 is that Comcast hasn’t priced its service aggressively enough compared with other VOIP providers or traditional telecom providers. Comcast plans to charge $40 a month to current cable customers; $54 to non-customers, compared with Vonage’s $25 and AT&T’s $35. Customers need reason to go through the hassle of switching phone service, and the primary motivator is cold, hard cash. Comcast’s pricing structure doesn’t recognize that.

The complete Impact Analysis is available to Nemertes clients. For more information, please contact Chris Zimmerman at christine@nemertes.com