Emerging telco Gotalk launched the second phase of its VoIP service yesterday, prompting what it believes will be the beginning of a "price war" in the Australian market.
"We think the market is ripe for some level of consolidation," said Steve Picton, CEO of Gotalk, who launched the carriers' "second phase" VoIP package.
Picton also took the time to attack VoIP market leader Engin, claiming the company was "particularly vulnerable at this time" due to a decision to scuttle its plans for a broadband ADSL service and staff cuts.
A statement released by the telco explicitly stated Gotalk's intention to lure customers away from its larger rival.
Engin shrugged off the attack, with Geoff Isaac, Engin marketing director, denying the company had cancelled plans for its ADSL broadband service. He said the service, which was due to be launched earlier this year, is merely "on hold".
Isaac said a price war was also unlikely -- because the service is already very cheap. "I don't think there's an opportunity to compete on price alone," he said.
Gotalk's Picton said VoIP has become a highly contested area due to its convergence with broadband access, and the fact that traditional landline services offer consumers very little choice.
"VoIP will become the standard form for voice telephony as the majority of Australians move to broadband," said Picton.
"The inclusion of broadband is a natural extension for any VoIP provider and I think it would be fair to say that single service providers are going to struggle as things head in this direction," he said.
Engin's Isaac argued: "that's just one view of the market, and Engin is by no means a single service provider". He went on to say that Engin will be launching Digital Video Recorder TiVo in conjunction with its part-owner, the Seven Network, in 2008.
Before its broadband plans had been put on hold the telco had spruiked its bundled services as a combined "triple play" offering voice, TiVo and Internet access across a high speed broadband connection. In a statement released in June, Engin said these "new arrangements will see the company lead the market".
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