Advice for the Vonage company's direction as a business

Posts: 2 · New Forum Member Joined: Jun 22, 2006 Posts: 2

Personally, the reason I can't switch to Vonage is because I get a deal from Cox by combining my phone, internet, and TV services into a package. I would end up paying more overall if I switched to the surely less-expensive Vonage service.

I do, however, wish that Vonage would gain hold on their sect of the economy, as I see them to be a very good company. The major thing separating them from real success against Cox and Verizon are the lack of high-speed internet and TV services. If they expanded into these areas and kept their current trend of "If you switch to us, nothing will change except your bill being lower", they would no doubt dominate the areas.

It's too bad the bigger companies hold such sway with the economy that a decent company like Vonage can't thrive like it should.

Posts: 409

Maynard wrote:

Personally, the reason I can't switch to Vonage is because I get a deal from Cox by combining my phone, internet, and TV services into a package. I would end up paying more overall if I switched to the surely less-expensive Vonage service.

I do, however, wish that Vonage would gain hold on their sect of the economy, as I see them to be a very good company. The major thing separating them from real success against Cox and Verizon are the lack of high-speed internet and TV services. If they expanded into these areas and kept their current trend of "If you switch to us, nothing will change except your bill being lower", they would no doubt dominate the areas.

It's too bad the bigger companies hold such sway with the economy that a decent company like Vonage can't thrive like it should.

I for one am glad there was an alternative devised to combat the horrible expenses of landline.

I will have that option very soon to go with my cable companies phone service as its almost in my aera.

Its priced very high though and only New customers can sign up for the reduced rate bundle package.

I don't feel comfortable relying on one source for all three things either. Its like buying a tv - vcr - dvd combo.... if one messes up your screwed out of all three while one is being worked on. Make sense?

Also I like Vonage's portability.

I think Vonage should keep concentrating on their Voip aera for now as they have some battles with it alone ahead. I'm curious as to Vonages final outcome in the telecommunications Industry. They still have a chance to thrive.

Posts: 1424 · Posted: Fri Jun 23, 2006 9:33 am Post subject:

Maynard,

The significant difference between Vonage and Cox or Verizon is not television, it's last mile.

If Vonage wants to compete in last mile it is going to have to invest 10 times the money it has now, or partner with someone who has that money (not an actual estimate, just a figure of speech). This partnership was suggested in a news story posted on the forum recently.

The key is not to have more players in the last mile segment, although that would be nice, it is to force the current last mile players to separate pipes from services and provide equal access to the pipes. This is opposite of the trend that has been going on in Washington for the last several years.

Posts: 2 · New Forum Member Joined: Jun 22, 2006 Posts: 2

I can't imagine the recent bills in congress enhancing the power of big companies would do the pipeline any good.

Posts: 66 · Full Forum Member Joined: May 25, 2006 Posts: 66

Ultimately it's that last-mile problem that was Vonage's downfall.

The problem is they can't compete because they can't offer anything other than phone services.

Vonage tried to be a telco, but without the infrastructure required to pull that off it was never going to happen.

What they're now left with is trying to sell a service that in the not too distant future the copper and cable owning companies are likely to be giving away for free as a value-add to internet and TV access on a single cable.

I think that Vonage could recover the situation that they're in, but to do that they need to be bought out by a cable or copper owning entity. And fast.

Posts: 94 · Vonage Forum Senior Joined: Jun 17, 2006 Posts: 94

Not owning the last mile shouldn't be important to Vonage. In fact, I'm sure that they'll be excited about the upcoming rollout of fiber to the home that is occurring as we speak. The bigger the pipe into the home, the easier and faster Vonage can deliver phone and other services to its customers. As long as customers have access to the internet, customers can freely choose the phone provider that they feel comfortable with.

That is why the "pipe providers" are fighting to charge for traffic that go over their networks (and not just access). They recognize that providing bigger pipes into the home doesn't guarantee that customers will choose them for services. I don't see them winning those type of decisions in Washington

Posts: 11 · Vonage Forum Associate Joined: Sep 25, 2005 Posts: 11

One thing Vonage can do is tie a knot with Comcast. I know comcast provide VOIP service but if they managed to do this it will be really good not for voange but also for comcast and u will see voange stock once agian @ 13 to 15 range.

Voange has to come with other service or they will die sooner or later.

Posts: 66 · Full Forum Member Joined: May 25, 2006 Posts: 66

I'm really pleased that Vonage have announced this "USB Phone" gizmo that lets you plug into any PC anywhere with an internet connection and use your Vonage account.

That's exactly the type of product that Vonage need to create in order to become a VoIP (or Voice 2.0) company. That's the type of value-add that says "OK, now we got something, it's not just a cut-price phone service".

It needs more of that. But it's a small step in the right direction that hasn't come a moment too soon....

Posts: 111 · Vonage Forum Senior Joined: Jun 15, 2006 Posts: 111

Akola, sorry man, but you money has been lost, and you will never make it back if you continue to own this stock. You will lose more and more money until you sell. If you hold on for too long you will lose it all when Vonage goes bankrupt. Look at my post on why Vonage will not be taken over:

Quote:

A takeover simply is not going to happen. Here are 5 reasons why:

1. Cost - Right now Vonage is trading at about $1000 per customer. Cable Co's can get those customers at a much cheaper price themselves, especially since they can run commercials on cable for free, are allowed to telemarket to their own customers (exception to the do not call list), and can run inserts in the bills they send out.

Tivo is a great example of this principle. Everyone bought that money-burning loser thinking that a Cable Co would buy it out. It never happened. They just set up their own versions of Tivo.

Tivo stock dropped 85%. A great warning to you longs: this was another company that captured the imagination of many consumers and was the first player to the market. And they got squashed like a bug by the Cable Companies.

2. Branding - Customer service nightmares and the heavy news coverage of the botched IPO, the worst in at least three years, is not something these companies want to be associated with. They want to increase the value of their own brand, not buy someone else's damaged goods.

3. Location - Cable Cos do not want customers outside of their territories. It increases their costs dramatically, and people expect Cable Cos to send someone out in person when something goes wrong. If Comcast currently has no customers in Iowa, why on earth would they want Vonage's (unprofitable) operation in that state?

4. Litigation - You buy Vonage, you get all 15+ lawsuits that come with it.

Furthermore, any company already in the phone business would expose itself to antitrust actions by private parties and/or the federal government and/or state attorney generals.

5. Poison Pills - Anti-takeover provisions in Vonage private placements Vonage disclosed in its prospectus, without going into any detail, that provisions of its pre-IPO private placements make a takeover unlikely.