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Vonage Holdings Corp. Reports Fourth Quarter and Full Year 2013 Results

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Boost Net Calling


Vonage In Print News

Store Sales Could Help Boost Net Calling

September 13, 2004

By Keith Reed

Internet phone service, a burgeoning technology that allows people to make cheap calls to almost anywhere over broadband connections, is getting a boost from retailers.

The technology, also known as voice over Internet protocol (VOIP), has gotten heavy publicity, but so far the equipment needed to send telephone calls over the Internet has been available only from service providers like Vonage and Packet 8. That has kept consumers from having an opportunity to see Internet-phone products in their favorite stores and has limited the growth of VOIP.

But manufacturers are now offering Internet phone products, and mainstream retailers are giving them shelf space.
Linksys,which makes home computer networking products, introduced two routers and an adapter with Internet phone capability last month. All three let you plug a regular telephone into an Internet connection, and, with a subscription to one of Vonage's monthly calling plans, call anywhere in the United States or Canada with no long-distance charges. The boxes sell for $59 to $89 each and are available at Staples and Office Depot, while Best Buy will start selling them this month.

Packet 8, one of Vonage's top competitors, started selling Voip adapters for $69 each and an Internet-enabled videophones for $499 each in July. The company sells unlimited local and long-distance phone service for $19 monthly, and unlimited videophone service for $29 a month. The gadgets are sold mainly through two stores: J&R Music and Computer World in New York City and Fry's Electronics on the West Coast. But a Packet 8 executive said he thinks retail, rather than direct sales, will quickly become the top way to get people hooked.

"Most people want to be able to drive down to their electronics store and maybe ask someone some questions," said Bryan Martin, the company's chief executive. "It's just reflective of the fact that voice over IP is just beginning to move into the mainstream."

Martin said Packet 8 had 17,000 subscribers at the end of June, up from 11,000 three months earlier.

Selling Internet phone equipment in stores is a departure from the strategies that companies have used to spread other technologies, including broadband Internet service. Retailers like Best Buy and Circuit City sell cable and DSL modems that pipe high-speed Internet service into homes and offices, but most of that equipment is still sold or even given away by telephone and cable companies when consumers sign up for the service.

Executives at consumer electronics firms jumping into the market think things will be different for voice-over-Internet phones. Big companies like Verizon and Comcast, which sell high-speed Internet service, don't need retailers to introduce their services, they said.

And until now, high-speed Internet service was good for Web surfing and downloading music, but not much else. The hope is that once consumers realize they can breeze into a store and leave with cheaper telephone service, they'll be sold instantly.



 
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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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