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Vonage What do you estimate Vonage's cost of service per customer ultimately is? Or at



What do you estimate Vonage's cost of service per customer ultimately is? Or at least what they need to charge to be making a profit? It was reported last year that they could have chosen to stop advertising and they would be making a profit so it can't be that far off.

Verizon isn't going to be able to match some of the features of Vonage in the near term and can't force the price issue too much anyway. There is no way the FIOS group is going to let VoiceWing erode their revenue that quickly when there is so much infrastructure being built out. If you think about it, it is probably cheaper for Verizon to offer regular phone service with FIOS rather than having FIOS customers use VoiceWing anyway.

Phone service will no more be free than email is free. That is, the majority of free email is advertiser supported. If you choose to run your own email servers there is still a cost to that, it just may be measured in labor rather than dollars.

It's funny that you are using broadband as an example of pricing. The cable and phone companies are in battle to capture customers since their businesses are starting to overlap, but if you look in any market without competition prices are still in the $40+ range. Vonage will be protected from extreme price pressure until the cable/telephone wars settle down a bit because the phone company needs the phone revenue and the cable companies are only going to pressure the phone companies enough to steal customers.

As Vonage grows in international markets it extends the reach of the places where free calls can be placed. With Vonage Networks now having a dedicated president we will probably see a lot more growth focused on that arena.

Vonage would also, surprisingly, benefit from more competition in the Voip space, if they establish peering agreements. That would allow more non-PSTN calls and that may very well reduce per customer cost.

Finally, it may be unrealistic to continue offering unlimited service for $20-$25/month. But Vonage can easily just upgrade high volume callers to business plans by saying that the customer's calling patterns are non-residential. Some customers will leave but many will still see that Vonage is a good deal for them. Vonage has, in the past, enforced the TOS to that effect.



Read The Full Thread:

Quiet PERIOD over July 2nd!


http://www.ipohome.com/marketwatch/quiet.asp I hope to see some positive
Vonage's problems do not come from the lack of subcriber growth. I am short but

scerruti posted "What do you estimate Vonage's cost of service per customer ultimately is? Or at" on 06/30/2006

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†AK and HI residents pay $29.95 shipping. ††Limited time offer. Valid for residents of the United States (&DC), 18 years or older, who open new accounts. Offer good while supplies last and only on new account activations. One kit per account/household. Offer cannot be combined with any other discounts, promotions or plans and is not applicable to past purchases. Good while supplies last. Allow up to 2 weeks for shipping. Other restrictions may apply.

1Unlimited calling and other services for all residential plans are based on normal residential, personal, non-commercial use. A combination of factors is used to determine abnormal use, including but not limited to: the number of unique numbers called, calls forwarded, minutes used and other factors. Subject to our Reasonable Use Policy and Terms of Service.

2Shipping and activation fees waived with 1-year agreement. An Early Termination Fee (with periodic pro-rated reductions) applies if service is terminated before the end of the first 12 months. Additional restrictions may apply. See Terms of Service for details.

HIGH SPEED INTERNET REQUIRED. †VALID FOR NEW LINES ONLY. RATES EXCLUDE INTERNET SERVICE, SURCHARGES, FEES AND TAXES. DEVICE MAY BE REFURBISHED. If you subscribe to plans with monthly minutes allotments, all call minutes placed from both from your home and registered ExtensionsTM phones will count toward your monthly minutes allotment. ExtensionsTM calls made from mobiles use airtime and may incur surcharges, depending on your mobile plan. Alarms, TTY and other systems may not be compatible. Vonage 911 service operates differently than traditional 911. See www.vonage.com/911 for details.

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