Vonage, Wimax Provider Team Up

Vonage, Wimax Provider Team Up

August 2, 2005

By Ben Charny

TowerStream, a provider of high-speed Internet services using cutting-edge WiMax technology, has teamed with Internet telephony giant Vonage in one of the first co-marketing agreements of its kind.

Starting today, TowerStream, of Middletown, R.I., is selling New Jersey-based Vonage's Internet telephony plans as part of its regular lineup of services. It will be one of the first such partnerships between a major Internet telephony provider and an Internet service using WiMax, a wireless method for distributing high-speed Internet access that rivals wired Net services from telephone and cable operators.

WiMax, another name for the 802.16 standard for wireless broadband, has a range of up to 30 miles and can deliver broadband at a theoretical maximum of 75 megabits per second, which is more than 20 times the speed of the fastest wired broadband available commercially. WiMax serves as a partial successor to the popular Wi-Fi wireless protocol, which works over far shorter distances--measured in feet rather than miles.

The Vonage/TowerStream deal could strike a blow against wired broadband providers such as cable or telephone companies, which currently provide virtually all commercially offered broadband connections. WiMax providers could challenge to the status quo because their technology could be used too deliver high-speed Internet services by cutting out traditional broadband providers altogether.

With almost 800,000 subscribers, Vonage is among the leading providers of Internet telephony, also known as voice over Internet Protocol, or VoIP, which is a method to digitize phone calls, then route them over the Internet. Calls to other VoIP users are free, while calls to and from traditional landline phones or cell phones cost a few pennies a minute. Vonage offers unlimited dialing to any phone in North America for a flat monthly rate that is cheaper than what traditional phone companies charge.

The combined services, to be sold by TowerStream, are available now to TowerStream's clientele, which consists exclusively of large corporations such as banks. TowerStream typically charges about $600 a month for a 1.5mbps connection. The services are available to businesses in New York, Los Angeles, Chicago, Boston and San Francisco, and will be extended to more cities in the near future, according to a spokeswoman for TowerStream.