Vonage Hopes New Services Will Improve Prospects
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Troubled voice-over-IP provider Vonage is rolling out new products and services in a bid to reverse its downward spiral.
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(InfoWorld) - Vonage Holdings lost less money in the fourth quarter of 2006 than a year earlier, but it didn't attract as many new subscribers to its VOIP (voice over Internet Protocol) service despite heavy marketing. The company, a pioneer in selling phone service that uses packet data networks instead of traditional circuits, now faces competition from cable operators and the established telecommunications carriers. The big players recognize the potential cost benefits of the technology as well as its flexibility, including the ability to give subscribers a browser-based portal for using voice mail and changing service preferences. But those big players are also bundling VOIP with other services, such as broadband Internet access and TV. Vonage ended the fourth quarter with a net gain of 166,267 subscriber lines, bringing its customer base to more than 2.2 million. But that was less than the 204,591 subscribers it gained the previous quarter as well as its gain in the fourth quarter of 2005, when it added 207,252 subscribers. Revenue soared to $181 million, up 91 percent from a year earlier, and the company's net loss narrowed. Vonage lost $65 million, or $0.42 per share, compared with a loss of $72 million in the fourth quarter of 2005. The company's margins also improved, according to a statement Thursday. But Vonage has built its business on being an early mover and drawing a big base of customers that can later drive profits. The company's marketing costs still amounted to 53 percent of revenue in the fourth quarter, although this was down from 71 percent a year earlier. Vonage still expects to reach its goal of making an operating profit, adjusted for certain factors, as early as the first quarter of 2008, the statement said. The company's stock (VG) dropped sharply after its initial public offering on the New York Stock Exchange last May at $17. Among other things, investors worried about the company's losses and growing competition. On Thursday afternoon local time, the share price was down $0.42 at $5.42. Though the future is cloudy for dedicated VOIP companies, VOIP itself is looming larger in major service providers' plans, according to IDC analyst Will Stofega. For example, mobile operators are looking at VOIP overÂ combined cell and Wi-Fi phonesÂ as a way to improve in-home coverage without the expense of beefing up the cellular network itself. However, it's too soon to count out Vonage. The company has started to focus on small and medium-size businesses, where it faces less competition from cable operators, Stofega said. Consumers may also see providers such as Vonage get into mobility themselves. Vonage could buy minutes from a cellular carrier and offer a service that lets subscribers hop on to Vonage via Wi-Fi at home, Stofega said. It has no traditional cellular minutes business to protect and could move early, jump-starting the trend, he added. The company could also team up with public hotspot providers or a municipal Wi-Fi operator such as EarthLink to provide mobile service over those networks, he added. But both of these are hard ways to make a profit, Stofega said.
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Vonage, the U.S. pioneer of low-cost  phone service over Internet broadband connections, on Tuesday  said it was working with a phone maker to offer a "Wi-Fi"  handset for subscribers to use at home or around town.
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Verizon will use Linksys phone adapters for its VoIP service, as the market for placing calls over the Net picks up momentum.
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PALM BEACH, Fla. - Every new technology has found its way to the American home, and it&#39;s the strategy that Vonage Inc. and AT&amp;T Corp.
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Time Warner is looking to offer cellphone service, expanding its services to include television, high speed Internet access, traditional phone service and wireless phone service.
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The wireless service provider seeks growth in emerging markets.
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Vonage, which helped popularize Internet telephone calling, faces brutal competitive pressure from bigger telecommunications players.
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For consumers, the benefit of VoIP has been found in the lower costs VoIP companies charge. Such service is usually cheaper because providers don&#39;t have to build huge networks of lines
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The Finnish phone vendor says its new service will decrease the time needed to pinpoint a phone's location, which should make location-based services more attractive.
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A new service promises cheaper mobile calls by exploiting VOIP, but it's not going to be easy. The big carriers must be considered, plus customers will have to punch lots of extra numbers. By Rachel Metz.
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Internet phone calling, which is already rocking the traditional phone business, is poised to take on the cell phone industry later this year. Vonage will unveil plans Tuesday to offer subscribers a wireless Wi-Fi phone that can make calls over the Internet at homes or at public Wi-Fi hot spots.
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As competition heats up, we may enjoy better rates and service.
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Broadband Internet telephony company Vonage raised $105 million in its latest round of funding, which will be used to expand its reach in the United States and internationally.
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Vonage didn't attract as many new subscribers to its Internet telephony service despite heavy marketing.
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VoIP service will be available using traditional handsets.
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Don't expect new IP phone services to be nearly as prevalent tho on PCs, says cellular service.