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

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As Promised, A Good Internet Phone

March 2, 2003

By Daniel Greenberg

Vonage Digital VoiceTM, however, delivers the goods, using a fast Internet connection to channel voice phone service all but indistinguishable from a land line. It works over most cable, DSL or WiFi (but not satellite) connections, regardless of operating system.

Edison, N.J.-based Vonage (www.vonage.com) offers two levels of residential service. A $39.99 monthly plan provides unlimited local, regional and long-distance calls to all 50 states and Canada, and a $25.99 plan includes unlimited local calling and 500 minutes of long-distance (3.9 cents a minute thereafter). Vonage just signed a deal with EarthLink to market its service, but no details were announced.

Both plans substantially undercut any comparable alternative except for some unusually generous cell-phone plans. There is a 3 percent federal excise tax, but no other fees or taxes apply.

Is the sound terrible? Do you have to use a tinny headphone plugged into your PC? No and no, in our testing.

The Vonage phone sounds as good as a conventional telephone and better than the best cell phone we've heard. To tell the difference between a Vonage line and a land line, we had to switch back and forth on a two-line phone and listen closely to detect a quiet background buzz on the Vonage phone.

You place and receive calls on a telephone of your choice, corded or cordless, plugged into Vonage's phone adapter, which then plugs into your broadband connection via a conventional router. The computer doesn't even need to be on. You pick up the phone, you hear a normal dial tone, and you dial long-distance numbers normally. You do have to dial area codes on local calls, but people already have to do that in many places.

Even transatlantic calls sound good and cost less than many state-to-state calls. London costs 5 cents a minute, Hong Kong and Moscow 6 cents, South Africa 28 cents, and Iraq 50 cents.

The Vonage service includes a package of extras, including caller ID, call waiting, call forwarding and voice mail. For $5 more a month, you can keep your existing phone number or add a number with a different area code, allowing people who live afar to make free local calls to you.

You can review incoming and outgoing calls and manage your features and account on Vonage's Web site. (Web access to your voice mail, however, is a Windows-only feature.)

Can you then get rid of your conventional telephone line? Maybe not.

Vonage phones can't call 911, although the company says it's working on that. If the electricity or your Internet connection goes out, so does your phone. But if you own a cell phone, especially one that supports upgraded E-911 service, you may not care.

Since your phone must stay plugged into the Vonage adapter, you can't use household phone jacks and you'll need to buy a cordless phone with its own extensions to add phones in your home. A Vonage phone also can't work as an intercom for an apartment building. And, because there's no standard phone-company billing, you can't call 900 numbers.

If you already have a home network with a router, setup is about as easy as hardware can get. The instructions are simple enough to be printed on a sticker pasted on the phone adapter. It worked so well and so quickly, it almost felt like cheating.

If you don't have a home network, Vonage will sell you a router for $40; that setup is more involved, but no worse than average for broadband Internet. Or you can skip the router if you don't want to use the phone while you surf the Web.

Either way, the service works. Local phone monopolies should be afraid.



 
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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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