RSSVonage Struggles in Wake of Verizon Suit
By Ed Oswald | Published August 9, 2007, 4:21 PM
Vonage is still solvent, although its continued fight with Verizon is hurting the company's bottom line.
During the past quarter, the company only managed to add 57,000 customers, far less than the 166,000 it added in the year ago quarter. Worse yet, Comcast has overtaken it as the nation's largest VOIP provider, and still appears to be growing quickly: it ended the quarter with 3 million subscribers.
Vonage has managed to find workarounds for two of the three main patents the courts have said it infringes on. The company gave no timeframe for the completion of the final workaround, although it expressed confidence in its business going forward.
Regardless of the legal problems, Vonage has still managed to cut its losses, posting a $34 million loss on $206 million in revenue, up from a $74 million loss on $144 million in revenue in the year ago quarter.
"We made significant strides this quarter in reducing costs and narrowing our losses. Despite the continued challenges associated with the Verizon litigation, the Company maintained its focus on achieving adjusted operating profitability," Vonage interim CEO Jeffrey Citron said in a statement.
Marketing expenditures decreased in the quarter, which may have also contributed to the falling subscriber additions. The company spent $68 million in advertising, down about a third from the previous quarter. However, the company plans to ramp up advertising again this quarter.
Citron told a conference call of analysts he also planned to work on Vonage's customer service problems, which he claims is causing as many as 7 in 10 customers who left the service to cancel. The quarterly churn rate was 2.5 percent, up slightly from the previous quarter.
I, for one, certainly hope that Vonage can pull a rabbit out of the hat. I have been a customer of theirs now for over a year and have never had the quality of service that I get from them from any landline based company. I recently checked out the offer that my cabel company, Time/Warner, offered for VOIP and was really shocked that it was no where even close to being as good as my Vonage package and cost $10 more per month.
As far as Customer Service goes... I don't see how Citron got those numbers. I've had nothing but good service from Vonage. 7 in 10 seems really high. I've never had a problem that was Vonages fault. I've had outages but that's due to my cable going down.
Vonage, you have my full support. Show the reborn Ma Bell that the government was right back in the 70's do split them up.
Score: 0
|If I were a Vonage customer, I'd find another carrier. Way too many red flags in that article, especially the customer service issue.
Score: 0
|I sure hope Vonage can get things worked out, I like competition when its dealing with utilities... now if only my electric company had some !
Hmmm an afterthought has occured to me, I wonder if any of the land line companies have much of a future ? or at least if they do it would have to be something like vonages model built up on net access. Almost everyone I know has switched from using land lines to cell phones.
Score: 0
|That illuminates the problem quite nicely. You don't know very many people.
Score: 0
|Nah, he just doesn't hang out at the old folks home. How's that classic rotary dial phone workin' out for you?
Score: 0
|Nah, it's called a "random sample," not "my friends" or "everybody I know."
Today's statistics lesson: http://www.surveyvalue.com/why_proper_sample.html
And, my rotary phone is working quite nicely. Haven't had a problem with it ever. Never needs batteries or to have them changed for a ridiculous fee. Even plays music if I call the right number. Never had to switch carriers or sign a contract for it. It's completely unlocked, and has been from its beginning in 1969. How's your iPhone doing?
Score: 0
|No stats lesson needed, since my comment addressed your attempt at being an jerk, not a statistician.
But hey, I guess I hit that right on the head. My voip and cell phone are doing great. Soon I'll combine them into one service. You should to try some newer tech yourself sometime.
Score: 0
|I prefer ol'skool. In fact, I'm still using VisiCalc and the 128Kb Apple II I bought back in 1981. Also still plugging along with the HP-12C financial calculator I bought the same year. Granted, I did sell my trusty Kaypro back in '85--but only with great remorse.
BTW, what's a voip?
Score: 0
|isn't it a Baseball Statistic? you know, ERA, RBI, AVG, VOIP,
Score: 0
|actualy the quote would be "Almost everyone I know" hehehe but then again I work in IT so perhaps the people I hang out with may be a bit more technical then your friends ? :) Why use a land line ? No batteries hmmm well at least there is one plus to it :) too many down sides to bother mentioning lol (also im sure most people do still use land lines but as I said most of the people I know dont, why would they ? they are never home....)
Edit: OMG I just realized how insensitive I was being... im sorry but I think ZenWarrior may still be using 56K *gasps!!!* hence the land line requirement (actualy since alot of america still cannot get anything but dial up this is probably the main reason land lines still have as many people as they do. I wonder how many of them actualy use the lines for anything other then net access ?)
Score: 0
|Yeah there is some new comercial on TV where this guy is talking about his VOIP home phone so it doesnt use his cell phone minutes up at home and how it switches to a regular cell phone when he leaves home. Thats what I want ! Besides my cell phone is dying I think *sobs* after 3 years its become almost like a friend to me almost never drops a call... weird now that I think of it the only calls it ever dropped where from my wife.... *sobs harder*
Edit:This survey is far more detailed then I needed but still interesting to know.
http://people-press.org/reports/display.php3?ReportID=276
Amazed to find out that less then 10% of peole use ONLY cell phones. Although where I work realy skews that number the other way.
Score: 0
|Actually, I completely eliminated my landline 2 years ago. Why pay $500/yr. for a phone number when one can now be had for $50/yr. or less?
Score: 0
|Damn what plan do you have ? (I pay for 3 cells in the house under one plan and pay nearly 100$ a month.... of course thats with unlimited everything but still lol)
Score: 0
|