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Vonage While I don't disagree with your subject, some of what follows is not correct or
While I don't disagree with your subject, some of what follows is not correct or logical.
But Vonage has not ever claimed to be interested in turning a profit at this point.
You are asserting that Vonage's existing customer base is made up of tech savvy early adopters? Nonsense. Most customers get the service working without additional help. Vonage will only need to scale their customer service at the rate at which they grow the customer base, perhaps less.
This could actually be a help to Vonage in fending off the price competition from below. Vonage is in a much better position to collect these fees than some of the smaller players. The ILECs can't afford to reduce prices from the top because they are funding their fiber roll outs. Yes, Vonage is going to be squeezed, but the USF won't make the difference.
In fact, the USF may provide an additional source of revenue for Vonage if they can figure out a way to tap into it.
Vonage is not attempting to turn the corner on a short term profit. If they did, they would die. The only way Vonage can be successful in the long term is to become large and multinational.
That gives them the advantage of being able to subsidize markets under intense competition with other markets experiencing less competition (see our discussion in the Canadian forum on pricing). And to offer packages that other providers can't match (see our discussion on how the free calling to Europe countries match up with virtual number availability.)
So, as long as Vonage needs to grow they are going to need to advertise. Those advertisement dollars are the real drain on the company but they are critical to Vonage's long term survival.
If Vonage turns its back on its expansion plans in favor of short term profits, that is the time to get out of the game.
Now, as far as your $48 figure. Vonage could still be successful at that price point. There are many people who are paying more than that currently for local service alone. It would not have been a large enough difference to get people to abandon traditional companies but Vonage could, if necessary, increase prices to the level that cable companies are using for their very similar services. It just wouldn't make sense to do so during a time where Vonage is trying to actively lure customers away from traditional phone companies.
BigTime, you are not the first person to come to the boards are try to push a path to short term profitability. We were discussing this issue long before the IPO and it has never been Citron's game plan.
I hesitate to say at this point that Vonage will be successful in the long term. I do not have a good enough feeling about that to be betting my own money. However, any move to short term profitability to soothe share holders is a death knell for Vonage.
Read The Full Thread: The folly of "Vonage service is great, so the stock is
• My wife uses Vonage for her home business and we both use it and like it. Several
• To put a cost of $45 per subscriber line is intellectually incorrect.
Vonages's
• What on earth do you base this statement on?
No, just that the average
• Now that I've gotten up off the floor, that was the best laugh I've had all week.
• [quote="ShelChgo"]
Are you trying to argue that airlines don't try to fill
• No. Just trying to explain that there are additional costs and the sale of a seat
• Specifically BigTime, but others as well, please attribute your quotes by using
• For these two features ALONE:
1. Virtual Phone Numbers
2. Portability
scerruti posted "While I don't disagree with your subject, some of what follows is not correct or" on 06/20/2006 |
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