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Vonage Reports Soaring VOIP Volumes


Vonage In Print News 

May 30, 2003

By Jo Maitland, senior editor

Voip service provider Vonage Holdings Corp. today announced a massive increase in the amount of traffic it’s handling. In its first two years of business, it notched up 10 million calls, but in the past 90 days, the total has soared to 25 million (see Vonage Hits 25M Calls).



With about 25,000 customers, 10,000 of which are in the New York area, Vonage is now completing about 1.5 million Voip calls per week.

One of the reasons for this big boost in traffic appears to stem from the marketing efforts of the likes of MCI (Nasdaq: MCIT) and Verizon Communications Inc. (NYSE: VZ) who’ve recently launched their own Voip services (see Verizon Offers Voip à la Cisco).

"The incumbents are starting to offer Voip now which is helping educate the market," says Lou Holder, executive VP of product development at Vonage. The ILECs are doing a lot of the leg work in explaining the benefits of VOIP, such as unlimited calling and the elimination of the barrier between local and long distance calls.

Vonage is benefitting from this, because it raises general awareness of Voip and also because Vonage often has lower prices than the incumbents, according to Holder.

For $26.77 per month, Vonage provides unlimited local calling and 500 regional/national Canadian minutes to any phone using any carrier. Users can keep their existing phone number or get a new one from Vonage's database of 135 U.S. area codes in 30 states. Additional time is charged at 3.9 cents a minute, with varying international rates for only 3 cents more. Start-up costs (tax, shipping and a router so you can surf the Internet total $122.03) and the service includes all the calling features like call waiting, voice mail, call forwarding among others.

But before you get on the blower to cancel Verizon, however, two caveats: If your Internet service goes down or "rolling blackouts" cut off New York this summer, your phone service will go dead. Even more alarming, Vonage offers a less direct form of 911 than you get with a traditional provider: Users must activate the service first to have any emergency calling ability. After that the customer is only linked to the general numbers of the local emergency services. Those lines can be busy, and cannot detect your location should you become incapacitated during the call. On second thoughts…



 
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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.

** Certain call types excluded.

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