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Hard Wiring - Installation
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Retail Trials for Vonage; New Router Coming Soon


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Retail Trials for Vonage; New Router Coming Soon

October 23, 2003
By W. David Gardner

Voip provider Vonage Holdings is broadening its reach in retailing as it promotes trials in Radio Shack and Best Buy stores. And, the Web phoning company is awaiting a new router that it believes will kick up its sales considerably.

The company said a trial in a “limited number of Radio Shack stores in the Philadelphia area” has been underway for a few months while another trial is ongoing at some Best Buy stores in California and Florida. “It's pretty early to tell,” said Matt Deatrick, Vonage's Vice President of retail channel sales. “Typically we're finding what we find on line. People will leave the store and will consider it for one or two weeks” before buying.

The boom in broadband is driving Voip adoption, Deatrick said. He pointed to a convergence of features including the increasing robustness and spread of broadband, improved voice compression techniques and the low cost of Web phoning as all contributing to the growth in sales.

Deatrick pointed to the imminent arrival of a VT (Voice Terminal) 1000 from Motorola as representing a future push for the product. The VT 1000 is a single port router that will enable a user to talk on the telephone and work on the Internet at the same time. Most of the vanguard Voip products limit users to one function at a time.

Users are also signing up for Vonage service because of some special Voip features including the ability of users to purchase a virtual phone number for $4.99 a month. Under this provision, users can purchase a phone number in an area code in an area other than the one the actual phone is located in. For instance, parents living in San Francisco can purchase a phone number in the Boston area code so they can make local calls to their children in school in Boston. Users, said Deatrick, also like the idea that they can transport their existing phone numbers to another area code and avoid a service charge in the process.

In another development, Deatrick said the company has a marketing campaign underway in Canada and is targeting the European market for mid-2004. Noting that Vonage's most successful sales techniques are its own online work over the Web, Deatrick said the company has also had longtime sales agreements with Amazon.com and an airlines sales catalog.

Based in Edison, NJ., the private company's seed financing came from private sources led by its Chairman and CEO Jeffrey Citron, a pioneer in the financial services business. Citron previously founded online brokerage Datek Online Holdings Corp. Founded in January 2001, the Voip firm has 200 employees.

Although the VT 1000 is likely to appeal to more business users, Vonage plans to stay focused on the consumer market, said Deatrick. Cisco Systems recently moved down the Voip business food chain with a version of its CallManager Express, which has a $750 price tag in its lowest iteration. Vonage does not see the Cisco product as competition, although it gets about 15 percent of its sales from business customers. Vonage claims the most number of consumer subscribers -- 60,000.

Another Voip company, i2 Telecom International has been selling its InternetTalker in a trial in seven Staples Business Expo locations in New York State and Pennsylvania.



 
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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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