10 thoughts on “Vonage, Shaken & Stirred, Again”

  1. I was one of the first 20k subscribers and I’m about ready to jump ship. the quality has PLUMMETED. It’s becoming a real problem…it’s like we’ve reverted 3 years.

  2. We have been with Vonage for at least a year now and we love it and haven’t noticed any recent problems. We have 2 numbers with them and hope they last forever.

  3. No surprise. The rush to convergence is squeezing everyone: cable companies, telecoms, and more pure play VoIP companies like Vonage, which doesn’t have as strong a brand or a deep customer base to mine.

  4. My local cable company has been pitching–no, bombarding–me an offer that’s double my current Vonage bill. The cable co offers unlimited US calls, but unimpressive overseas tariffs. Vonage service has been reliable here in the states and when I was using it while living in Europe. The cable offer just doesn’t compare, as far as my needs.
    I must admit, convergence/quad-play just escapes me. Getting one bill is no big deal. And no one seems to be integrating my messaging (not that I really need that) or wrapping up my media preferences into an “experience”. So, what’s really the point, anyway?

  5. News Flash for Vonage Executives – Competition is everywhere. The MSO’s and RBOC’s have the customer base, deeper pockets and patience. I’m afraid Vonage is going to suffer just like the CLEC’s did a few years back… OUCH!!
    Vonage introduces higher margin products into their business customer base. Here’s a fact. There are ten of thousands of Vonage lines being used as a call center application.
    * Acquire a hosted call center provider that offers ACD, IVR & Predictive Dialing
    * There are only a few hosted call center companies available (EchoPass, Cosmocom & Five 9… Oracle acquired Telephony@work in June ’06)
    * Hosted call center companies run their business as a service provider – same as Vonage
    * An acquisition would bring technology with barrier to entry, existing customers, expertise and huge profit margins
    * Analysts put this market at $1B by 2008
    * Monthly cost of a hosted call center offering is in the range of $130-$150 per user plus traffic
    * With Vonage’s termination (minutes) buying power they could make a nice healthy profit in this area as well

    If Vonage could convert 30,000 users into a call center offering the numbers would look quite impressive
    Current Model: 30,000/ users * $24.99/month * 12 month run rate= $2.2M includes traffic
    Call Center Model: 30,000/users * $140/month * 12 month run rate= $50.4M plus traffic

    Now that’s impressive!!! 25X

    Note: the model above is based on zero churn in order to simplify the point. You can make your own assumptions.

    Disclosure: I work in the hosted call center space and therefore can share some of my insights. We convert a great number of Vonage customers to our call center offering because of functionality. Many call centers starting out use Vonage because it meets their initial goals (low price and dial tone). However, once a call center reaches a certain level it must look for a call center offering in order to stay competitive and productive. Just last month we brought on two centers each with 25 seats, this month we brought on two smaller centers (8 & 14 seats) and a larger one with 46 seats. Do the math on revenue lost….

  6. Cable gaining ground on RBOC’s=======what a Novel concept!!!???? Time Warner signed up 187,000 Digital Phones last quarter just out…Charter 82,000, Comcast 311,000…do I DETECT a TREND here????

  7. The business model just seems to be long-term

    I think part of it is that any voip business that is based on minutely revenue has bad fundamentals. Think about it, the more customers you capture, and the faster the VoIP segment grows, the more quickly your revenue will plummet, as heavy users begin to benefit from free on-net calls, either through the VoIP provider or through Skype or someone else. At the same time, competitors costs are being driven down through the availability of cheaper ways of switching long-distance phone calls, and prices are being driven down by competitive pressure from VoIP and Skype.

    So Vonage’s market success could well be well be driving its financial failure.

  8. Just my two cents. I started with Sunrocket big big mistake. Unreliable service and lousy cuctomer service. Then did research and saw many many unhappy customers with Vonage customer service. Cablevision is just to much money but best rated reliablity so i tried Voicepulse a local company in NJ. 24.99 per month with all the features and it actually works. Any time you have a question a human being actually answers their phone and they speak english. I never looked back at getting rid of local Verizon or Sunrocket.

  9. I’ve actually noticed a great improvement in vonage call quality in the Boston area. I have much less service interruption and dropped calls have tapered off significantly.

    Comcast doesn’t have a comparable plan and I don’t know of any cable or phone company that offers VOIP with free calls to western Europe (well, free as in included in the monthly plan).

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