Is revenge going to be sweet? Everybody's used to telecom companies offering Internet service, but now Internet service provider EarthLink (NASDAQ:ELNK) said today it's going to play around a little bit with voice. The company plans to offer a device with voice, email, and Internet capabilities, and USA Today reported that it will offer these via the BlackBerry. It's an interesting move considering ISPs have had a few new tricks up their sleeves lately.
In case you don't know what a BlackBerry is, it's a personal digital assistant provided by Research In Motion (NASDAQ:RIMM) -- similar to those made by palmOne (NASDAQ:PLMO) and Handspring (NASDAQ:HAND). The BlackBerry offers its users useful information on the go, including calendars, address books, and in some models, wireless email capabilities. Now, EarthLink said that demand has led to its decision to offer a service that bundles data and voice for that kind of a device.
It's no secret that ISPs are scrambling to offer more interesting and compelling services to their customers, in light of the need to attract and even simply retain subscribers, seeing how competition's getting increasingly cutthroat. Recently, Yahoo! (NASDAQ:YHOO) said it would offer voice chat over its Yahoo! Messenger service. And Time Warner's (NYSE:TWX) AOL said it would offer a bill-paying service to its subscribers.
Not only does this up the ante in the competition between ISPs, but now EarthLink's poking into the kingdom of cellular providers.
Will EarthLink succeed where others, so far, have failed? After all, convergence of both voice and data via cell phones has not quite taken off here in the U.S. yet. Voice is still it. Not too many people walk around surfing the Web on their cells. Not yet, anyway.
However, maybe it will be more successful in reverse. The BlackBerry -- which, of course, is a popular device with a devoted following -- already has wireless email capabilities. EarthLink said that it was customer demand that drove it to add voice for such devices.
According to USA Today, EarthLink won't own its own cellular network, but instead will buy the capacity wholesale. (Investors might wonder from whom, and for how much.) Reuters reported EarthLink will charge $40 to $75 per month for voice, and $20 to $50 for data. Will those longing to ditch their cells to chat on their "CrackBerries" (as the devices are jokingly called for their addictive qualities) be willing to pour that kind of cash into their PDAs?
Without a doubt, the move's an interesting strategy, but there are a few too many unknowns for my taste to make it any more than that. The service should launch in May, and bears some watching going forward.
Do you think this is a wise move on EarthLink's part? Talk about the issues at the EarthLink discussion board.
Alyce Lomax does not own shares of any of the companies mentioned.
