Vonage Should Become A Wi-Fi Provider

Posts: 1424

From Vonage in the News, c|net columnist Russell Shaw suggests;

With New WiFi Phone Shipping, Vonage Should Become A Wi-Fi Provider, Too

This appears to me to be a stupid idea.

Vonage is looking to be acquired or do an IPO. Adding a major business unit at this point would be suspect.
The article mentions there are a number of WISPs for sale. There is a reason. Without commercial contracts the business is expensive. With commercial contracts come splash screens and terms of service, thereby causing problems with the WiFi phone.
Vonage should focus their energy on making their equipment work with more providers, not trying to change the landscape of WiFi access. Is Starbucks going to give up their relationship with T-Mobile because Vonage is offering free WiFi? Around my closest Starbucks is a Panera and Buffalo Wild Wings both offering free WiFi. There is also a MacDonalds and a Barnes & Noble offering WiFi access. The nearby hotels also offer WiFi access.
Vonage is already fighting phone companies on E911 access so they could fight them on the municipal WiFi access front as well. At what cost? How many simultaneous fights should Vonage be in?
If Vonage had a major network infrastructure to leverage, or if Vonage could buy a WISP and pick up a national network that would save them money then I could see a fit, but the author doesn't mention this point.
The author thinks the WiFi network could be supported off of Vonage's massive advertising budget. Vonage's real advertising drive is offering replacement phone service for the home. Advertising at wireless hot spots does not seem to be a match for the Vonage advertising campaign.

What do you think? Will you buy a WiFi phone expecting to use it on the road? Will you buy one for use in the home? Should Vonage become an ISP or should they remained focused on their current business?

Posts: 1123 · Vonage Forum **MVM** Joined: May 26, 2005 Posts: 1123

I voted no, or rather, not yet. I agree that battles on multiple fronts are a bad idea, unless you possess the resources to handle them. Same as in war is same for Vonage. Stick to doing what you do best, and get better at it first. Only then, branch out to other areas. I believe if they had 90% of residential users up and operational, with a minimal amount of issues/downtime, then started going full bore on WiFi, they would got LOTS of new customers, based upon their success with VoIP/customer service. I for one, would consider getting a WiFi phone before that, but I'm a geek, and need my new toy fix every few months. Very Happy

Posts: 2257

scerruti wrote:

...or if Vonage could buy a WISP and pick up a national network that would save them money then I could see a fit...

But Vonage isn't spending any money on WiFi today. They don't provide Internet connections or bandwidth, they use them.

A number of startup companies are starting WiFi in rural areas, and it can be insanely profitable, since rural customers limited to slow dialup or satellite are generally willing to shell out big bucks, $50-75 a month, for WiFi, and the ROI is pretty fast if you can get 10-15 customers on an access point, as long as you can build a mesh net and get a few access points up.

But that would be an entirely new business for Vonage. And they are already spread thin trying to keep up with their current business. Vertical integration can come later.

Posts: 31 · Vonage Forum Junior Joined: Jul 18, 2004 Posts: 31

They should worry about what people have been requesting for over a year before they would do something like this.

Posts: 1424

NateHoy wrote:

scerruti wrote:

...or if Vonage could buy a WISP and pick up a national network that would save them money then I could see a fit...

But Vonage isn't spending any money on WiFi today. They don't provide Internet connections or bandwidth, they use them.

Vonage does spend money on bandwidth. One of the beauties of the Internet is that both the sender and receiver get to pay for every bit of data that is transmitted. Having free access to an national ISP's backbone might provide cost advantages for Vonage.

I've posted previously about Stealth Networks Voice Peering Fabric which is solely intended to reduce Voip provider bandwidth costs by allowing direct connections for Voip to Voip calls from separate providers or large companies. Acquiring the right WISP might provide a similar financial advantage.

Having said that, I am still against the idea of Vonage acquiring a WISP at this time. I can't imagine that the cost savings would significantly offset the operational costs of the WISP and I have no idea what percentage of Vonage's operating costs derive from bandwidth costs.

Posts: 2257

scerruti wrote:

Vonage does spend money on bandwidth. One of the beauties of the Internet is that both the sender and receiver get to pay for every bit of data that is transmitted. Having free access to an national ISP's backbone might provide cost advantages for Vonage.

I've posted previously about Stealth Networks Voice Peering Fabric which is solely intended to reduce Voip provider bandwidth costs by allowing direct connections for Voip to Voip calls from separate providers or large companies. Acquiring the right WISP might provide a similar financial advantage.

OK, gotcha. I wasn't thinking about them using a WISP as a Voip to POTS gateway location, or vice versa I can see where owning a bunch of endpoints would allow them to hook up their VoIP<->POTS gateways to them.

In fact, maybe what they could do (to make a little dough on the side) is slap a WiFi gateway at each of their gateway locations and just use excess bandwidth at the site to support a few hundred WiFi users nearby, at $25 a month each. Hmmmm... The more I think about THAT scenario, the more it makes sense, as long as they set QoS on their voice traffic higher, they are selling off excess bandwidth. It wouldn't really interfere with their core business, they'd just be hiring some locals to run the WiFi bits at each gateway and run it as a side business at each endpoint.

Hmmmmm......

Posts: 30 · Posted: Wed Dec 14, 2005 4:21 pm Post subject:

They should try being a Voip provider first Rolling Eyes

-M@

Posts: 103 · Posted: Wed Dec 28, 2005 9:02 pm Post subject: focusing

It is not like I am an expert in strategic planning for business, but it seems stupid to me for a company to try to develop a vertical market in any business as complicated as the one about which we are speaking. Let Vonage focus on telephony and let other companies focus on providing internet services. I do feel Vonage should make deals so that barebones DSL becomes more available, and that they work to get telephony services to be unhindered for all internet access suppliers, but let them stay and develop their one major project and not get distracted or disappated with other areas of the internet biz.