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Vonage In The News
Vonage Holdings Corp. Reports Fourth Quarter and Full Year 2013 Results

Carolyn Katz Elected to Board of Directors of Vonage Holdings Corp.

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Vonage Customer Reviews
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Vonage, a VT2142 and a RTP300, My Experiences - A Detailed Review
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Salt Lake City: impressions after several months
Salt Lake City: impressions after several months




Vonage Reviews

Vonage Pushes Into Canada: Internet Phone Service


Vonage In Print News


November 24, 2003
By Mark Evans

Armed with new financing, U.S. telecom pioneer Vonage Holdings Corp. plans to launch an aggressive international expansion strategy by offering its Internet-based voice service in Canada within the next month -- a move that could shake up the competitive landscape north of the border.

Jeffrey Citron, Vonage's chairman and chief executive, said that an announcement about a Canadian partner -- likely a cable company or a competitive local exchange carrier such as Allstream Inc. or Call-Net Enterprises Inc. -- will be made soon.

He said the private equity round, which came from a group of investors led by venture capital firm New Enterprise Associates, will help Vonage expand the business from its base in the U.S. to international markets. "Canada is the first place we are coming to," he said.

"We will launch in a couple different markets in Europe early next year."

It is expected that Vonage will offer its service, which uses Internet-based technology to handle voice traffic, in several large Canadian cities before year-end to residential and small business customers.

Vonage's financing and plans for Canada comes on the heels of a new joint venture between Microcell Communications Inc., Allstream and NR Communications LLC, to launch a new wireless network next year across Canada that will offer consumers high-speed Internet access and local telephony service using Internet-based technology.

Vonage has become the posterchild for Voice-over-Internet-Protocol, or VoIP, a technology that lets consumers make phone calls using high-speed Internet networks. In the past two years, the Edison, N.J.-based company has signed up 70,000 customers who pay US$24.99 to US$34.99 a month for unlimited local and local-distance calls, and other features.

Vonage's financing follows a US$58.5-million deal done by publicly-traded rival Net2Phone Inc., which plans to launch an aggressive cable telephony strategy. It is expected that a growing number of firms developing Voip technology will tap capital markets. This includes Mitel Networks Corp., which could make an initial public offering next year.

Mr. Citron said the company decided to take on institutional investors after "much pressure and much enthusiasm".

Perhaps more than any other company in the Voip market, Vonage has pushing the technology into the spotlight and shown that it is ready for mainstream usage. While the company's prospects are uncertain, it has brought attention to technology that had been regarded as unreliable and insecure.

Mr. Citron said the Voip market has become red-hot as the technology is rolled out to residential and business customers.

The market has been helped by Voip strategies from major carriers such as Telus Corp., Qwest Communications International Inc. and Time-Warner Inc. Denver-based Qwest will unveil a Voip pilot program in Minnesota next month, while Time-Warner is exploring its Voip plans after a successful trial with cable customers in Portland, Me. earlier this year.

Iain Grant, managing director with Seaboard Research, said he is puzzled why Canadian cable companies such as Rogers Cable Inc. and Shaw Communications Inc. have not jumped on the Voip bandwagon. While they are testing the technology, Rogers and Shaw are not expected to launch telephony service until at least 2005.

"VoIP is a no-brainer and a huge revenue stream," he said. "If you are Rogers and looking at two million cable customers, let's say the natural [adoption] is 15% to 20% in the first year. If you are looking at 400,000 to 500,000 customers paying you $30 to $40 a month, you can't sneeze at that kind of money."

While Canadian cable companies -- with the exception of Halifax-based Eastlink Communications Inc. -- sit on the sidelines, their U.S. counterparts have been more active. "The whole Voip sector is on fire," Mr. Citron said. "Vonage has carried the torch for the last year. Now, we are here witnessing the beginning of the transformation."

Mr. Citron's enthusiasm about Voip is grounded in his belief that Internet telephony has the potential be disruptive technology, and he has seized upon it as a fertile investment opportunity. This formula has worked already twice. In 1995, he co-founded Island ECN, an electronic trading network that was acquired by Instinet Group Inc. for US$503-million. He also founded online brokerage Datek Online Holdings Corp., which was acquired by Ameritrade Inc. for US$1.3-billion.



 
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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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