Ooma public launch imminent…

August 9, 2007 by Garrett Smith

Michael Arrington over at TechCrunch reports that much hyped silicon valley VoIP startup Ooma is currently taking customer orders for their $399 “hub”, which enables free VoIP calling via their proprietary peer-to-peer mechanism.

For complete details on Ooma’s service and features, peep their website here. Their strategy seems to be to create a peer network of Ooma hubs, deployed with residential users across north america. Ooma beta users and first adopters are encouraged to maintain an analog POTS line from their traditional provider (AT&T, Verizon, etc), and go ahead and plug said analog line right into their Ooma device.

Ooma is banking on leveraging these PSTN connections to terminate user phone calls from their peer-to-peer IP network onto the PSTN. In the meantime, until their network is “seeded” with PSTN connected peer devices, they’ll have to terminate those users calls the old (new-old) fashioned way, by using a commercial VoIP termination provider.

I came across Walt Mossberg’s article on Ooma back in mid-July, and the title of his piece “Ooma Puts Out a Call to Ditch Landlines for Web-Based Service”, seems a bit ironic…. as Ooma will, in reality, rely upon those very same landlines for free call termination in order to sustain their business model and bring their CPE devices down to a realistic price for mass consumption.

However, their product packaging and mini-PR machine have taken some queues from Apple by creating a bit of mystique around the product. The $399 cost (reportedly jumping to $599 at the end of 2007) of the Ooma device will go a ways toward offsetting their termination costs until their network is fully built out with sufficient PSTN connected users that the majority of user calls can be terminated within their peer group.

That’s the gameplan at least. Finding consumers willing to pony up $399 up front in the wake of recent high profile industry flame-outs like SunRocket, may prove challenging.

TalkCrunch has a podcast interview with founders Andrew Frame and Ashton Kutcher (yes that Ashton Kutcher)

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