Vonage VoIP Forum Digest

May 8, 2008

By Daniel Connor

Welcome to the Vonage VoIP Forum Digest

Today, we have some bad news to report for all VoIP service providers. Tom Keating gave a heads-up about South Korea wanting to ban VoIP back in 2006, including U.S. military bases and military personnel serving in South Korea and expressed his outrage over this idea. Russel Shaw (Rest in Peace) another VoIP blogger also expressed outrage over the VoIP blocking plan. Well, it appears South Korea has pulled the trigger killing U.S. servicemen's and servicewomen's ability to make inexpensive VoIP calls back to the U.S. I was just reading a Vonage Form thread about this, started by Dahak, a member of the U.S. Air Force whose Vonage service just stopped working. Some suggestions are provided, including setting up a VPN or using other inexpensive phone services. But none of these are great solutions. I'd expect this kind of VoIP blocking shananigans from totalitarian states, not a strong democracy like South Korea, which also has a very tech-savvy culture. Maybe South Korea will show some lovin' this Mother's Day and unblock VoIP just for the holiday to allow U.S. military personnel to call their moms. Wishful thinking I suppose.

In The News
Today, Vonage reported a first-quarter net loss of $9 million, or 6 cents a share. This compares with the mean estimate of three analysts polled by Thomson Reuters for a profit of 7 cents a share. Vonage reported a narrower first-quarter loss after cutting marketing spending, but customer growth slowed as a result. Vonage said it added 30,000 net subscriber lines in the quarter. The previous quarter was 56,000 and Vonage added a whopping 166,000 in the year-ago quarter. It's monthly customer churn, or cancellations, rose to 3.3 percent from 3.0 percent in the previous quarter.

The good news is that revenue rose 15% to $224.6 million. The three analysts polled were, on average, looking for revenue of $223.2 million. In last year's quarter, Vonage posted a loss of $72 million, or 47 cents a share, on revenue of $195.9 million.

Vonage also said it was in a strategic relationship with Covad Communication Co. to use Covad's DSL network, creating a new broadband service. This should be interesting to find out how Covad will be bundling Vonage. Financial terms of the agreement weren't disclosed. Vonage said it would offer the new service by the end of the year.

Shares of Vonage closed Wednesday at $1.88.

Vonage VoIP Forum Digest - May 8, 2008