That BellSouth is buying Vonage is even a rumor, that’s just loco. Why in the name of god would they pay $4375 per subscriber (total $3.5 billion) when they very well know that Vonage customers bail much before the vital two year pay-off period is over. Why would they spend $3.5 billion to buy Vonage when for $6.7 billion they can buy Qwest which has a) 1.122 million DSL customers, you know the kind of technology you need for Vonage to work, and b) $13.809 billion in revenues. I am glad BLS is declining to dignify the rumor and declining to comment.
Andy adds, “The price of $3.5 billion seems almost excessive and for 800,000 customer or so, no real in house technology, a team that would largely go bye bye after acquisition, I don’t see the value.” On further thought, it is more like wishful thinking even though $3.5 billion is the price the Vonage investors would like to get for the company they has stuffed with dollars.
These are tough times for indie VoIP providers, especially with the cable guys getting their act together. Net2Phone is a cheaper option, and despite what people might think BellSouth still is a brand, and it is many times bigger than Vonage. And if…. and that’s a mighty big if, BellSouth does buy Vonage for that price, I will surely put this right up there with classic telecom disasters such as AT&T selling of cable broadband business (because analysts said so!) and MCI merging with WorldCom.