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PostPosted: Thu Jan 19, 2006 10:34 am    Post subject: International poll - a different take Reply with quote Back to top

A few days ago there was a poll about whether people were interested in having Vonage include international calls in their standard plan for no extra charge. While the yes votes had a greater percentage, I found the reason behind many of the no votes interesting: they objected to subsidizing international calls for others (the rejoinder was that Vonage is listening to market demand).

While I understand and appreciate the no vote, it may not be correct. It seems doubtful to me that Vonage would siphon off money from a profit making center to create a money losing or money diluting center. It seems more reasonable that Vonage sees a profit in allowing calls to international land lines to be included in standard plans. How could it be?

My guess is that if a person is making international calls, they will be making calls to cell phones, too, since there are more and more of them. But overseas mobile phones are always billed separately at very high rates (around 27 cents per minute for Europe). This differs from the US/Canada where the caller doesn't know by price whether s/he calls a landline or cell phone. Perhaps Vonage is figuring that the revenue from calls to international mobile phones will offset the revenue lost to international land lines.

I don't make the claim that it is so, but it seems a credible standpoint to me.

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PostPosted: Thu Jan 19, 2006 3:51 pm    Post subject: Reply with quote Back to top

European cell phones are expensive to call because the caller is paying for the air time. You can get a prepaid phone in Europe and never put any money into it because the calls you receive will keep the service active and pay for the provider's facilities. In North America, the cell phone owner pays for the airtime whether the calls are going out or coming in. That's why they're rated the same as landline calls; they cost the same for the phone service provider to route.

Calls to Europe from North America can be made free if Vonage can acquire cheap enough gateways to the public phone network there. If the Internet is transporting the call across the ocean, the only cost to Vonage is the final connection to the public network. If it costs Vonage the same to route a call to Salisbury as to Saskatoon or Sacramento, Vonage could easily make calls to England part of its package without increasing the cost to customers.

Vonage includes Canadian calling for US subscribers because Canada costs the same to service as the US. No subsidy is required. Vonage doesn't care if you call Massachusetts or Manitoba; the cost to route the call is the same. Make that true for Manchester and I'm sure we'll have our free UK calling soon.
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PostPosted: Thu Jan 19, 2006 9:39 pm    Post subject: Reply with quote Back to top

Thanks for the nice fleshing out of the topic. I'd just add that calls to landlines in Hungary, Austria, and Germany from other landlines do cost (though not nearly so much as mobile to anything or as much as landline to mobile), representing an expense to Vonage. That is why I rather use my (included international calls) service to make local landline calls in Vienna!

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PostPosted: Fri Jan 20, 2006 7:10 am    Post subject: Reply with quote Back to top

Not always true. Skype has the same rate on mobile and landline calls to, e.g. China. Is there a difference in routing calls for Skype and Vonage? They are both Voip valls right? Skype is the cheapest way to make international calls from your computer to landlines or mobile phones.
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