Is Pure Play a Good Play For AT&T?

DSL Reports is reporting that AT&T will soon be releasing a new pure play VoIP product that allows customers to “Bring Your Own Broadband” that comes at a time when AT&T just announced that it was canceling its CallVantage service. This begs the question,

“Is pure play VoIP a good play for AT&T?”

It is quite obvious that the reason the CallVantage product was canned was the inability of AT&T to grow the subscriber base and or to make that subscriber base profitable. Couple this with the fact that AT&T’s bundled data/voice service U-Verse is failing to gain traction in available markets, leads one to believe that this is a desperate play to gain market share.

After all, what makes them think that a pure play offering will change this trend? If anything, a pure play offering hurts them more than it helps them. At least with U-Verse product there is QoS and with the CallVantage service they were growing revenues from existing AT&T customers by offering another service, but with this pure play offering they are relegated to the same fate of the Vonage’s of the world:

• No QoS
• No customer loyalty
• Low profitability
• High customer churn rates

With residential VoIP subscriber rates slowing, increased competition from cable companies and regional plays, expect this move by AT&T to be another flame out.