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

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Vonage, a VT2142 and a RTP300, My Experiences - A Detailed Review
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Salt Lake City: impressions after several months
Salt Lake City: impressions after several months




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Forget the '90s, This is when Fun Begins


Vonage In Print News
By Mark Evans

The way telecom consultant Iain Grant sees it, the distinction between cable and telephone networks will gradually disappear as new technology changes way we access and use different services.

In their place, a new super-network will emerge offering consumers voice, data and video services in new and innovative ways.

"The new network isn't a telephone network, a cable network, a wireless network - it is, simply, a network. Your particular access to the network may be through one or more gateways - but the particular gateway is no longer important. It is access itself that is key," he wrote in a recent report called "It's Not Your Parent's Phone".

If Mr. Grant's theory is correct, it means the line between telecom carriers and cable companies will soon start to blur.

"Communications services have long been defined by the underlying technology upon which services are delivered: i.e. cable television services over coaxial cable, telephone service over telephone wires, cellular/mobile services over wireless networks," he wrote.

"This categorization by delivery mechanism is no longer appropriate. Access can be provided by multiple players, indeed, it can be provided to individuals by a multitude of providers."

The moves being made by telcos Sasktel, Manitoba Tel Services Inc. and Telus Corp. and cable firm Eastlink Communications to move into new territory are signs that the network evolution has begun. Regardless of how voice, video and data traffic is delivered, the key will be who controls the "pipe" to access services. Whoever owns the pipe will have a big say on how much money consumers spend to access it.

In a two-part series that appeared earlier this week in the Financial Post, Barbara Shecter and I wrote about how the battle between the cable firms and phone carriers is poised to get messy as both sides launch new revenue-generating services. This has seen cable firms jump into the telephony business,and the carriers get into TV broadcasting. In Canada, Eastlink is already providing phone service, while Sasktel and Manitoba Tel have launched television programming over high-speed networks. Telus is expected to enter the TV game next year.

The cable firms and telcos are making huge bets that the move into new markets will work. The investment in new equipment will need to be supported by marketing campaigns, technical service and customer support. This means that tens of millions of dollars will be spent to get started.

The motivation behind the move is three-fold: revenue generation, customer loyalty and retention, and the ability to sell more value-added services. If a firm can be all things to all consumers, there is huge potential it will create a lucrative relationship at a time when revenue growth is tough.

The big unknown, however, is whether enough consumers are willing to try new service providers. As much as people like to gripe about Telus and Bell Canada, how many would leave if they could get phone service from a cable firm? The same argument goes for cable TV. We all love to hate Rogers Cable and Shaw Communications but will consumers go to Manitoba Tel, Sasktel or Telus for digital television service?

Consumers tend to be creatures of habit unless there is a compelling reason to switch. This could range from the desire for better service or, more often, better value or lower prices. This will probably mean that consumers will be big winners as the cable firms and carriers duke it out for market share. What better way to attract customers than by offering discounts on a service single or, better yet, a bundle?

Ted Rogers knows full well that this will be part his company's competitive future, given the complaint Rogers filed last month with the federal regulator asking that Bell be prevented from offering bundles that include local phone service.

Beyond price, one of the most intriguing issues will be how cablecos and carriers can differentiate themselves by offering new services. For all the talk about the dot-com boom and how it would change the way we worked, shopped and learned, the real impact of global networks is just starting to take hold.

For carriers and cable firms, there is a fertile opportunity to take advantage of Internet-based technology to offer a wide range of services to a variety of market segments -- even small niches. The firms that quickly capitalize on this window of opportunity will thrive. If Rogers, for example, is serious about getting into the telephone business, it will join forces with Vonage Holdings Inc. or develop its own technology to send voice traffic over the Internet.

The new world of networks is just beginning to unfold with new players and services. Forget the dot-com and telecom booms of the 1990s, this is when the fun begins.



 
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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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