Have you ever seen those African wildlife specials where the dry season turns a watering hole into a puddle, leaving the last remaining denizens flopping around in increasingly thick mud waiting to be eaten? That's something like what VoIP services provider Deltathree (DDDC) faces right now. The company refinanced its lease to free up some restricted cash to stay wet, but if the rain doesn't come soon then it isn't going to matter.
Deltathree never made the big bets of a Vonage or even the mid-sized ones of 8x8, by living within their means they were profitable in VoIP early on. Tactically, they always operated well. Strategically they have chosen the wrong pond over and over, and they're paying for it. Early on, they tried to play wholesaler to companies like Verizon, and they even powered VoiceWing for a while. But this was selling replaceable services to a competitor, bearing the risks of both failure and also success since they just get replaced. They also sell the consumer-based iConnectHere service and now the joip services through Panasonic phones, but even 8x8 has sidelined consumer services in favor of SME VoIP. Their Q3 results showed again that they are retreating on all fronts, as if we needed further proof after viewing their stock chart:
For Deltathree, it has been 4 years since VoIP fever struck the markets. Nothing they have tried has worked, the pond is almost dry, and the vultures look hungry. The company is looking for strategic alternatives, i.e. to get bought. But at this point what do they have that anyone might want? Other than Vonage, which has plenty of its own problems and isn't in a position to buy anything, who else is left in the consumer VoIP space or wants to enter it? What they need are some legs and a map to better watering hole.
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