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Salt Lake City: impressions after several months
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Review: My First Day With Vonage, Excellent!
Review: My First Day With Vonage, Excellent!



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Great Price, No Complaints



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You need some common sense.



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




Vonage Reviews

Vonage CFO Sees Profits Ahead


Vonage In Print News

October 1, 2003
By Ray Le Maistre

SIP service provider Vonage Holdings Corp. is set to hit profitability by "the second quarter of next year," according to its CFO, John Rego.

Vonage has been racking up the milestones in recent months, signing up its 50,000th customer just last week (see Vonage Hits 50K Voip Lines) and closing September with 54,000 customers, Rego tells Boardwatch. Its service is currently available in 90 U.S. markets in 30 states, and that will become 91 (and 31 states) this Friday or next Monday when Vermont's broadband subscriber can start using the firm's services.


The company's rapid growth has brought it recognition as a pioneer in the latest edition of Boardwatch Insider, Boardwatch's subscription research service (see Boardwatch Insider Surveys SIP).

The report -- entitled "The SIP Revolution: Winners and Losers" -- gives Vonage the top rating among the competitive SIP service providers. It says its flat rate pricing is attracting customers by undercutting local call packages. And it praises Vonage for providing the adapter that hooks up a standard fixed phone to the customer's broadband connection, so that users can make SIP calls using their existing handsets, for free.

Vonage says that marketing efforts of other North American players have helped it succeed. Campaigns by the likes of MCI (Nasdaq: WCOEQ, MCWEQ) and Verizon Communications Inc. (NYSE: VZ) have raised general awareness of IP telephony, and a lot of broadband users have then gone on to discover Vonage (see Vonage Reports Soaring Voip Volumes).

It also helps that the number of broadband users is growing at a fierce pace: 1.125 million customers signed up for DSL services in the U.S. in the first six months of this year, taking the total to 7.576 million, according to research house Point Topic Ltd. (see DSL Growth Explodes in 2003).

Vonage is on a growth spurt itself. It ended 2002 with 7,500 subscribers, hit 30,000 active lines in June, and by August 4 it reached 40,000 lines. The 50,000 mark was unveiled on September 23. On August 19 last year the company had completed 1 million SIP calls, and hit the 50 million mark a year later (see Vonage Hits 50M SIP Calls). Rego says the company is now completing 3 million SIP calls a week.

So what's the big appeal? The tariff packages are certainly enticing, with consumers able to make unlimited local and long-distance calls within the U.S. and Canada for $34.99, and small business able to do the same for $49.99, while many international calls are charged at 5 cents or 6 cents a minute.

Rego says the growth is set to continue. He says Vonage is on course to have 100,000 customers by the end of 2003, or very early next January, and to close 2004 with 250,000 users, by which time its service will be available in 200 U.S. markets. He claims the company is on course for 500,000 customers by the end of 2005.

Rego adds that while the majority of sales to date have been direct, the company now has sales channel deals in place with the likes of Amazon.com and Radioshack, as well as two cable companies, and that the proportion of direct sales will decrease as those channels ramp up sales.

Vonage is privately held and has raised $50 million to date, according to the CFO, with all the funding coming from private sources and angel funds.



 
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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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