Q1: In what stages of the product life cycle is Internet telephony? Does the answer to this question vary across companies such as Vontage, Comcast, Time Warner and Cox? Q2: Why does bundling of services work so well for the cable companies? What are the advantages to both the consumer and the company?

Q1: In what stages of the product life cycle is Internet telephony? Does the answer to this question vary across companies such as Vontage, Comcast, Time Warner and Cox?

VOIP is at two different stages depending on what company one might be considering. For Comcast, Time Warner and Cox, the product is in the market introduction stage in that at this stage the product production costs are high for those companies and their sales volumes are low.

Vonage (this is the correct spelling), however has already entered the growth stage with VOIP as production costs are reduced for it because of economies of scale. Further, profits are rising for Vonage because sales volume are increasing significantly due to rising public awareness while prices still remain high. Moreover this is the stage at which competitors are entering the market as represented by Comcast, Time Warner and Cox.

Q2: Why does bundling of services work so well for the cable companies? What are the advantages to both the consumer and the company?

Increased competition in the telecommunications and cable industries has made it difficult for service providers in these industries to maintain their market shares. Cable and telecommunication companies therefore have turned to services bundling attempting to maintain or grow their market share by offering complete home and small business communications packages including internet service, television and land and/or cell telephone services.

Even though it has been necessary for cable companies to enter into partnerships with cell phone providers to enable them to begin offering expanded services, it is well worth it to keep customers from switching to competitors. This strategy enables the cable companies with bundled services to provide all-inclusive home and small business communications solutions while creating an opportunity to attract new customers to the company making their market share more stable, more diverse, and more competitive than before.
For customers, the benefits are that they get all the services they need in a bundle at a reduced price rather than purchasing each service separately at a higher cost and less convenience.