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Vonage Expands International Presence with Investments in Asia Pacific Region

Vonage to Present at the Oppenheimer 20th Annual Technology, Internet & Communications Conference


Vonage Customer Reviews
Salt Lake City: impressions after several months
Salt Lake City: impressions after several months

Review: My First Day With Vonage, Excellent!
Review: My First Day With Vonage, Excellent!

Great Price, No Complaints
Great Price, No Complaints

You need some common sense.
You need some common sense.

Vonage Customer Review: One month with Vonage, and...
Vonage Customer Review: One month with Vonage, and...

Vonage Reviews

VOIP is Getting Very Real

Vonage In Print News

Voip is Getting Very Real

September 15, 2003

By Carol Wilson

By now, everyone has caught on to the fact that the Bell companies are struggling to battle market and technology trends that are stacked against them. And the news is only getting worse.

The access line attrition that began with the disappearance of the second-line market and continued with wireless substitution for regular phones is now exacerbated by the potential coupling of two already worrisome competitors - Internet voice and the cable industry.

Enter Vonage

Vonage, the new voice over Internet Protocol player, has been offering service for less than a year, but had captured almost 45,000 customers by July. More dangerously, however, the company is wisely courting some heavyweight partners in the cable industry.

"We are actively talking to all the MSOs," says John Rego, Vonage CFO. "We are very interested in the partnership possibilities."

Vonage's business plan is straightforward. The company is taking advantage of the emerging Voip standard, SIP or session initiation protocol, and the growing deployment of broadband access lines. Anyone with a broadband connection, either cable or DSL, can use Vonage's local and long-distance voice service.

The company sends out an analog telephone adapter, which plugs into a computer and a phone, instantly transforming the broadband consumer into a Voip user. The adapter converts a human voice into packets, which are then conveyed through the PC and the broadband link. Vonage operates 20 regional data centers, at which it houses gateways between its Voip network and the PSTN.

Consumers will love the low cost - residences get unlimited local and long-distance service for $39.95 a month. Small businesses pay only $49.95 a month. And all the usual advanced voice features are available free.

Virtual Phone Numbers

But there is much more to the Vonage offering than cheap phone service. Using its Virtual Phone Number capability, a customer can have multiple phone numbers assigned to the same phone for $5 more per month. Couple that with the ability to use any area code and consumers can set themselves up to avoid many long-distance charges. For example, Rego set up his mother, who lives on the East Coast, with Vonage service using a Las Vegas area code, so that her brother can call her from his Vegas home anytime and not pay long-distance charges. Families with kids in college can give each child his or her own number, with a local area code, and let them call home for much less than the cost of a prepaid phone card.

Virtual Phone Numbers let broadband users avoid many long-distance charges.

The knee-jerk reaction to this phenomenon is to cry "No fair." This isn't what the North American Numbering Plan was set up to do. And indeed, protests have been lodged against what Vonage is doing. Those outcries could well become more intense when the company begins signing up cable partners, offering them the opportunity to deliver voice without the cost of voice switches.

There is only so long, however, that little lawsuit boy can stand with his finger in the dike. If companies such as Vonage are able to deliver Voip with true voice quality, then there is little to stop them from using the flexibility of this new technology to lure customers slowly but surely off the circuit-switched network.

Rego admits Vonage has thus far attracted typical early adopters. By looking for cable partners, however, Vonage is reaching out to the masses.

Beating Voip long-term will take flexibility and innovation, for which local phone companies have not been known. Joining the parade begins to look like the smartest tactic - and Rego isn't ruling out partnerships with local telcos.

"This is clearly the future," he says. Partner with us, and you don't have to spend a lot of capital on equipment. This could get very interesting."

It already has.

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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 for details.

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