Ooma Comes To The Rescue Of POTS Castaways

There have been well-documented hiccups for all the advances that technology has brought the world, mainly when a technology is in a transition phase. Great examples would include the infamous Y2K event, which referred to a widespread computer programming shortcut that was expected to cause apocalyptic-like havoc as the year changed from 1999 to 2000 --- it didn’t. More recently, wireless carriers AT&T and Verizon duked it out with the FAA over its expansion of 5G service that could potentially interfere with the aircraft safety mechanisms. After much public squabbling that made all players look foolish, the FAA announced last week that it had reached an agreement with the carriers, who pledged to establish a “buffer zone” of two miles along some airport runaways that would mitigate potential interference.

Some companies show authentic leadership by trying to proactively head off problems that cause potentially cause technology transition angst for consumers. One compelling example is Ooma, the well-known telecommunications company whose services include Voice Over IP (VOIP) for businesses and mobile users. The company is especially well known with small and medium business customers. Its telecommunications products and services have a deserved reputation for ease of use with organizations lacking huge IT departments.

With more than 900 employees, the 18-year-old company has signed up more than 2 million users since being founded in 2004. Due to the nature of its solutions, the company had a cloud-based DNA before “cloud” became a recognizable part of the lexicon. The company has built its strategy around simplicity and ease of use, accentuated by a value proposition based on understanding its customers in a robust and personalized manner.

One of the areas that Ooma has identified as a critical opportunity is the “sunsetting” of legacy copper phone wires. Incumbent Local Exchange Carriers, otherwise known as ILECs, have local responsibility for managing the copper wire infrastructure in most areas across the United States. In the industry rush to embrace faster data connections such as fiber optics, ILECs have been de-investing and decommissioning the copper wire infrastructure as demand has continued to decline. The infrastructure neglect element of this phenomenon has resulted in rising quality issues for those customers still using “old school” copper wire phone lines.

The FCC and state public utility commissions have exacerbated this situation by removing decommission-related price gaps as regulatory barriers, resulting in a steady increase in PSTN (Public Switched Telephone Network) rates. Ooma reports that many customers are absorbing higher POTS (Plain Old Telephone System) rates in the $80 to $120 per month range (sometimes as high as $240 per month in some cases).

While many analog phone users have (or are planning to) move their POTS phone lines to VOIP-class technology, there are a considerable number of legacy devices that can’t effortlessly transition from analog to digital connections. These classes of devices typically fall in safety (e.g., fire alarms, panels, elevator phones, gas leak detectors, etc.), security and monitoring (e.g., burglar alarms, access control systems, etc.) and essential 24/7 phone lines (e.g., hospitals, pharmacies, etc.) categories. It is important to recognize that safety phones and devices have stringent regulatory requirements that prevent using standard VOIP services.

Ooma AirDial: a compelling POTS replacement solution

Last November, Ooma took the wraps of AirDial, an innovative communications platform for businesses and consumers. Designed with the same attention to detail around simplicity and ease of use that the Ooma brand has become known for, AirDial targets those customers with devices that have legacy analog phone service requirements. AirDial provides integrated phone service, a T-Mobile data connection and the necessary hardware in a single bundle that’s easy to manage and manage.

The solution itself is roughly the size of a typical modest-sized router and is not much larger than a small box with two small antennas. The unit supports up to 4 analog devices and is designed to support voice, fax and emergency signaling applications as outlined above. The device is compliant with safety regulations UL 864, NFPA 72, ASME A17.1. B that makes it ideal for replacing legacy analog devices that are POTS-based. The device also uses an emergency backup battery that is user-replaceable. Ooma provides remote management support for easy system updates via a Web portal that can also set up alerts and notifications.

AirDial achieves its connectivity via a cellular connection using the leading LTE networks. AirDial’s antenna placement is also optimized for indoor cellular signal reception, a critical requirement as most fire, alarm and elevator-related devices are installed within a home or business.

AirDial’s value proposition

An essential item that AirDial delivers on, beyond its functionality, is its affordability. The basic Ooma AirDial hardware (consisting of the “hub” itself) is $299, with a rental option of $10 per month (with a perpetual warranty). The AirDial monthly service, available in month to month, one-year and three-year contract increments, ranges from $29.95 to $39.95 per line. These service plans include unlimited PSTN calling for each line and the LTE data plan itself.

Some closing thoughts

Solutions like AirDial are ideal for customers with devices that have legacy POTS line requirements. The product, which will ship early this year, couldn’t arrive fast enough as the FCC shows that the number of POTS lines in the United States declined from 122 million in 2010 to 41 million in 2019. Many industry experts expect POTS lines to completely disappear within five years (if not sooner), depending on the ILEC. More alarmingly, while mobile phones rates have largely declined over the past ten years, the Bureau of Labor Statistics has noted a 36% increase in POTS rates during that same period.

Ooma should be applauded for bringing a solution to the market that solves a highly tangible problem and does it in a very cost-effective manner. Most customers with these legacy devices will require a solution that is plug and play and must be managed by individuals without extensive IT experience or personnel, a hallmark of the Ooma brand. The bottom line is that this type of proactiveness is likely to save businesses and homeowners money and anguish. Here’s hoping that customers will not wait until the last moment to address the POTS sunsetting dilemma in their homes or businesses. After all, peace of mind can be a very good thing.

Mark Vena is the CEO and Principal Analyst at SmartTech Research based in Silicon Valley. As a technology industry veteran for over 25 years, Mark covers many consumer tech topics, including PCs, smartphones, smart home, connected health, security, PC and console gaming, and streaming entertainment solutions. Mark has held senior marketing and business leadership positions at Compaq, Dell, Alienware, Synaptics, Sling Media and Neato Robotics. Mark has appeared on CNBC, NBC News, ABC News, Business Today, The Discovery Channel and other media outlets. Mark’s analysis and commentary have appeared on Forbes.com and other well-known business news and research sites. His comments about the consumer tech space have repeatedly appeared in The Wall Street Journal, The New York Times, USA Today, TechNewsWorld and other news publications.

SmartTech Research, like all research and tech industry analyst firms, provides or has provided paid services to technology companies. These services include research, analysis, advising, consulting, benchmarking, acquisition or speaking sponsorships. Companies mentioned in this article may have utilized these services.