Vonage

Patent ruling due in Verizon lawsuit against Cox

Dan O'Shea — Mon, 06 Oct 2008 09:08:30 -0400

Verizon Communications is awaiting a jury decision in its VoIP patent lawsuit against Cox Communications, and that ruling could come as soon as today, according to The Wall Street Journal. Verizon sued Cox over the alleged violation of six VoIP-related patents, and the action is just one of a series of similar accusations Verizon has leveled, including patent violation claims against VoIP service provider Vonage and cable TV firm Charter Communications.

The Vonage case was settled with an agreement that Vonage would pay Verizon $117.5 million. The lawsuit against Charter is pending. Verizon is seeking damages of $404 million from Cox. The WSJ reports that Verizon previously struck a deal with Comcast under which the two companies agreed not to sue one another for at least five years, if Comcast agreed to buy Verizon Wireless service for its employees. As cable TV companies continue to win over telephony subscribers, Verizon is looking to get its piece of the action one way or another.

For more:
- read this report at The Wall Street Journal

Vonage sub growth, churn slow

Dan O'Shea — Sun, 10 Aug 2008 12:45:29 -0400

Vonage has a new CEO, and if its second quarter earnings results are any indication, it may be starting a whole new era that departs from a traditional quarter-to-quarter performance characterized by high marketing costs, high subscriber growth and high subscriber churn. In the Q2 report, there was evidence that numbers in all three areas are trending lower, which is exactly what new CEO Marc Lefar, a telco wireless veteran, has in mind.

For the quarter, Vonage added only about 2,000 customers, well below the 56,691 it added during the same quarter in 2007. The low figure reflects Vonage's ongoing effort to cut marketing costs by cutting advertising that once seemed ubiquitous. Subscriber additions headed sharply downward, but the company managed to reduce churn from 3.3 percent to about 3 percent. Meanwhile, revenue was up 11 percent to $227.5 million and revenue per line for the company's 2.6 million lines was up slightly. Vonage also saw its quarterly loss shrink to $6.9 million from $23.2 million in the second quarter last year.

For more:
- see this story at The Wall Street Journal

Related articles:
Vonage named Lefar CEO late last month. Vonage report
Vonage and Comcast reached an understanding about traffic management. Vonage report

Telecom vet Lefar takes over at Vonage

Dan O'Shea — Wed, 30 Jul 2008 19:12:43 -0400

Telecom industry veteran Marc Lefar, who has worked primarily in the wireless market for both Verizon Wireless and AT&T, among others, has been named CEO of VoIP service provider Vonage, replacing Jeffrey Citron. Lefar was the chief marketing officer of AT&T's Cingular Wireless when that company successfully reduced customer churn, and as Light Reading points out, that is experience much in need at Vonage, which has churn of more than 3 percent.

Vonage needs to press hard from a marketing perspective to get customers to think of it as a multi-play service provider (the company now has a deal to resell Covad Communications DSL service). The VoIP business also continues to be challenging as cable TV companies like Comcast continue to make progress with their own voice services, and telcos push themselves in the direction of Web 2.0-related voice applications and mash-ups.

For more:
- read this story at Light Reading

Related articles:
Vonage announced in May it will re-sell DSL from Covad. Vonage report
Vonage has faced scrutiny over its ability to pay down debt. Vonage report

Comcast, Vonage reach traffic management understanding

Dan O'Shea — Wed, 09 Jul 2008 22:42:25 -0400

Cable TV provider Comcast and VoIP service provider Vonage, who compete on the VoIP front, have reached an agreement under which Comcast has pledged that its traffic management practices will not interfere with Vonage VoIP traffic traveling over Comcast's network facilities. According to a story at Light Reading's Cable Digital News, that does not mean Vonage traffic will get preferential treatment. The extent of what it does mean is not exactly clear because the companies are not talking about the specific points or practices covered by the agreement.

The timing of the agreement is interesting because Comcast has indeed been testing and working on new traffic management solutions since being cited for traffic-shaping practices that delayed peer-to-peer traffic. Could such agreements become more frequent as service providers riding over other carriers' networks seek a degree of reassurance that their traffic will not be slowed in the name of network management?

For more:
- read this report at Light Reading's Cable Digital News

Related articles:
Comcast and BitTorrent have worked on traffic management solutions Comcast report
Vuse complained about Comcast traffic throttling Comcast report

CallVantage: Last call or higher calling?

Dan O'Shea — Mon, 07 Jul 2008 11:11:34 -0400

The blogosphere is alive with speculation that AT&T is pulling back on its CallVantage VoIP service. The company reportedly is halting marketing of the service through its affiliate partners as of today, which is driving some observers to believe that CallVantage will bite the dust completely.

AT&T has made no official announcement thus far, but changes in the CallVantage strategy, branding or service would not be surprising at this point since such changes were implied last fall when AT&T said it would begin packaging VoIP with its U-verse broadband service. CallVantage has been around since before U-verse, and it even pre-dated the SBC acquisition of AT&T that created the new AT&T. It was in fact one of the first VoIP services offered by a major landline telco.

If AT&T eventually calls it a day for CallVantage, the move should not be seen as a failure by a major telco to compete in the VoIP business. I'll admit to having thought at CallVantage's launch that pure-play VoIP providers like Vonage and Skype would be doomed by AT&T's offering. Yet, the biggest VoIP players have survived outages, legal hassles and corporate strife, and seem to have emerged from all that in decent enough health. Vonage even is pushing further onto telco turf with a plan to re-sell DSL.

However, AT&T is evolving, too. Its U-verse service is maturing and expanding, and this fact plus ongoing VoIP competition and ongoing landline voice decline, means it is time for the telco offer a truly integrated broadband and VoIP family. It may not go by the name CallVantage in the future, but that does not mean AT&T is giving up on VoIP.

-Dan

For more:
- see this post at GigaOm

Related articles:
AT&T announced last fall it was bundling U-verse and VoIP AT&T report
Vonage plans to sell DSL via Covad Communications Vonage report

Report: Huawei edging ahead of Alca-Lu in DSL ports

Dan O'Shea — Mon, 16 Jun 2008 09:12:19 -0400

Alcatel-Lucent has long been the dominant DSL port vendor in the world, making economic sense of the market when it only vexed other vendors, and holding the top spot in DSL ports shipped worldwide quarter after quarter for several years. Now, according to at least one research firm, Alca-Lu is losing its grip on the market to China's Huawei Technologies.

Broadbandtrends reports that Huawei has taken the lead in this market with 31% share. However, another research firm, Dittberner Associates, said Alcate-Lucent is still ahead, with a 30.1% share to Huawei's 29.2%. Broadbandtrends and still another research firm, Infonetics Research, show that Huawei has moved ahead is the specific segment of IP DSL port shipments, significant because IP-based ports eventually will completely replace ATM-based ports.

For more:
- read this report at Light Reading Europe

Related articles:
Vonage last month said it will re-sell Covad DSL Vonage report
Verizon just announced a faster DSL service plan Verizon report

Jangl dangles as Jajah picks up execs, assets

Mon, 12 May 2008 06:59:55 -0400

Integrating VoIP capabilities with social networking applications was one of the most hotly hyped opportunities of the past couple years, and no one looked to be more in the thick of the action than Jangl, which was among the first to partner up with social network giant Facebook, as well as Bebo. Yet, exposure to social network users didn't translate to enough revenue. According to Jangl's CEO, some Jangl executives and assets have been acquired by fellow, similar-sounding VoIP service provider Jajah. Jajah seems to be in a better position after landing a key relationship to support VoIP for Yahoo! instant message users. Even as other companies like Vonage and Skype start to show new life and growth, weaker players and business models continue to get weeded out of the VoIP service provider landscape.

For more:
- check out this coverage at FierceVoIP
- read this article at Telephony

Related article:
Jangl rolls out ad-based VoIP widget Jangl report

Vonage lowers loss, will sell DSL via Covad

Thu, 08 May 2008 06:59:56 -0400

VoIP service provider Vonage reported first-quarter earnings today that were marked by higher revenue, a lower net loss and moderating growth in customer additions, but the real news today regarding the company was buried deep in the earnings announcement. Vonage is expanding its reach into the broadband market through a partnership with Covad Communications under which Vonage will offer 3 Mbps and 6 Mbps DSL service packages under the Vonage Broadband brand. Covad is a nationwide DSL wholesaler, allowing Vonage to immediately jump into the ranks of national broadband service providers. Vonage will launch Vonage Broadband by the end of the year. The implications for the broadband market at large remain to be seen, but this is shaping up as a bold move by a company that seemed to be knocked against the ropes last year by several VoIP patent lawsuits from established telcos. Pure-play VoIP players may still have limited future options, but things could get interesting if Vonage is able to re-cast itself as a full broadband service provider.

Now for the first quarter numbers: Vonage's net loss was way down from $72 million in the first quarter of 2007 to only about $9 million this year. Revenue was up 15 percent to $224.6 million, and the company added 30,000 subscribers.

For more:
- check out this coverage at Forbes
- see this press release from Vonage and Covad

Related articles:
- Vonage recently saw its chief legal officer depart. Vonage report
- Vonage settled four patent lawsuits within the last year. Vonage's lawsuits

Vonage lands $215 million in debt financing

Mon, 28 Apr 2008 06:59:54 -0400

VoIP service provider Vonage said it has lined up $215 million in debt financing from a private third party which will help the company refinance much of its current debt of more than $253 million. Further details are still unclear, such as who the private funding party is and what the terms of the financing agreement are. The arrangement comes after a year in which Vonage settled several patent lawsuits but continued to show strong customer growth and movement toward profitability.

For more:
- read this story at Light Reading

Related articles:
Vonage touted some new offerings at this year's CES. Vonage report
Vonage renegotiating debt terms Vonage report

SPOTLIGHT: Ooma not nearly as big as Oprah

Thu, 24 Apr 2008 06:59:52 -0400

Ooma, the company that debuted on a wave of hype last summer over its $399 Hub product and an offer of free voice calling to consumers, has been hit hard by executive departures and so far failed to live up to its promise. GigaOM reports that a new CEO is working on reducing the price of the device and honing the argument for it. With a connection to "actor" Ashton Kutcher, who also was involved with an online video marketing campaign for the company, the company has looked to create an aura of cool around the most uncool of telecom services-voice. But free isn't cool enough-or free enough as it turns out. Other VoIP companies (SunRocket) have failed at the high-concept games sort of similar to the one Ooma has been trying to play in making its money upfront, and the VoIP market continues to be a dangerous place for turning a profit, even for the companies that are succeeding there to some degree, such as Skype and Vonage.

Still, has Ooma, or free calling in general, had some impact on the traditional telecom industry at large? If there has not been a direct competitive effect, has it helped shape the way carriers view the value of voice or the possibilities of consumer device packaging and marketing? I don't really think so. VoIP itself has had an obvious competitive and philosophical effect, but new high-concept VoIP confections do not seem to have changed voice pricing or voice marketing overall. What do you think?

For more:
- see this post at GigaOM

Related articles:
Ooma and Magicjack are among the recent crop of fresh VoIP attractions. Ooma report
Ooma's not the phone bill vanquisher it appeared Ooma report

Vonage improves, but debt may come due

Thu, 14 Feb 2008 06:59:57 -0500

Despite recording improving financial metrics in its fourth-quarter earnings report, Vonage is facing serious scrutiny over its potential ability to pay down debt that may come due by the end of this year. The company reported 56,000 new customer additions and 19.3% revenue growth, compared to the final quarter of 2006, while also posting a loss of $11.1 million that was far lower than the $117 million loss Vonage reported for Q4 2006.

However, churn of about 3% spooked some analysts who were also hoping for more new customers. Meanwhile, the company has $250 million in short-term debt that debt holders may require pay-back on by the end of 2008, and re-financing that debt could prove challenging. Some observers are calling it Vonage's very own credit crisis, though the broader credit crisis is as much at fault as Vonage's corporate financial problems, which according to its recent earnings reports, are improving by the quarter.

The company is coming off a year in which it settled several patent lawsuits, a year in which I previously thought we would saw Vonage's precipitous decline into bankruptcy or buyout. Yet, the fourth-quarter numbers and ongoing customer growth prove Vonage has something left.

For more:
- read this story in Forbes

Related articles:
- Vonage recently announced the departure of its chief legal officer

Verizon targets Charter with VoIP lawsuit

Mon, 11 Feb 2008 06:59:56 -0500

Verizon Communications has filed a lawsuit against cable TV company Charter Communications alleging infringement of eight VoIP-related patents. Charter is the second cable player Verizon has sued over VoIP patents, Cox Communications having been the first. So, who's next on the list?

After having successfully sued Vonage for patent infringement, it seems like Verizon is testing how far it can get sending its legal eagles on attack against the competition. The patents in question are starting to look like the secret weapon Verizon had in its back pocket the whole time VoIP providers were building their market presence.

For more:
- read this story at Multichannel News

Related articles:
- Verizon filed a patent lawsuit against Cox Communications late last month
- Cable VoIP under threat from Verizon Article

Vonage legal chief departs after busy year

Thu, 07 Feb 2008 06:59:56 -0500

Vonage chief legal officer and executive vice president Sharon O'Leary is leaving the company at the end of the first quarter, after having led the VoIP service provider through several patent lawsuits, all of which resulted in settlements. She has been with Vonage for only about two and a half years, but certainly was busy. Vonage also announced it was naming Mike Sears the senior vice president of global service delivery operations. The service provider's legal trouble may be over, and the area Sears will lead is where its focus needs to be now--on making customers happy and making sure Vonage can successfully expand globally.

For more:
- read this article at VoIP-News

Related articles:
- Vonage settled four patent infringement lawsuits within the last year

FCC opens USF reforms to comment

Wed, 30 Jan 2008 06:59:53 -0500

As expected, the Federal Communications Commission yesterday proposed three separate concepts for Universal Service Fund changes, and opened all three to public comment. One idea include the recommendation from the FCC's joint federal-state advisory board to overhaul the program into three separate funds for basic phone service, wireless and broadband.

The other proposals on the table include cost-based USF distribution for rural wireless carriers, and a reverse auction funding distribution system.

For more:
- check out this story from the Associated Press

Related articles:
- Vonage is suing to avoid USF obligations in Nebraska

Universal service reform on FCC's plate

Tue, 29 Jan 2008 06:59:55 -0500

The Federal Communications Commission reportedly is ready to open up several suggestions for Universal Service Fund reform to a public comment period, though these reports have been circulating for about the last week with no action yet. The agency's joint federal-state advisory board already proposed numerous changes that included $4.5 billion cap for the fund, which grew to $7 billion last year. There are also several ideas from various sectors about how distribution methods should be changed and whether or not broadband and wireless services should have separate universal service funding mechanisms.

One of the contentious issues is the fairly recent requirement that VoIP service providers contribute to the universal fund. VoIP carriers have argued they shouldn't have to on the grounds VoIP is an information service, and now Vonage is suing the Nebraska Public Service Commission to allow it to be released from the obligation of contributing to that state's fund.

For more:
- read this story about the awaited FCC action at The Wall Street Journal
- see this Associated Press story about the Vonage lawsuit at Forbes

Related articles:
- The FCC's own advisory board recommended changes late last year
- Vonage sues Nebraska PSC Article

Sprint files four more VoIP lawsuits

Mon, 28 Jan 2008 06:59:55 -0500

Emboldened by their success suing Vonage for patent infringement, traditional telcos are moving onto more lawsuit targets. Verizon Communications last week sued Cox Communications, alleging violation of eight patents, and now Sprint Nextel is suing four more companies--Paetec Holding, Nuvox, Broadvox Holdings and Big River Telephone Company--for infringing on multiple patents. Vonage settled lawsuits against it from Verizon, Sprint and AT&T, and Cox no doubt has the financial backing to fight a legal battle, but Sprint is going after relatively small competitive carriers. How will they handle the strain of fighting these lawsuits?

For more:
- read this story in Network World

Related articles:
- Vonage settled its patent case with Sprint last October

CES: Vonage, Skype step up efforts

Mon, 07 Jan 2008 06:59:53 -0500

While Microsoft, Comcast and others made a big splash at the International Consumer Electronics Show in Las Vegas, VoIP service providers Vonage and Skype were not to be out-done, despite what has been a difficult preceding year for both companies.

Vonage announced at the show its new V-Portal gadget, which is targeted at simplifying service activation and trouble-shooting for customers, functions that reflect Vonage's increased focus on customer service. Meanwhile, Skype announced functionality with Sony's PlayStation Portable, and other moves.

For more:
- see this piece about V-Portal in BusinessWeek
- read about Skype and PSP at Techtree

ALSO NOTED: Vonage settles patent suits; Seidenberg exercises shares; and much more...

Wed, 02 Jan 2008 06:59:51 -0500

> Vonage has settled patent lawsuits with separate plaintiffs Nortel and AT&T. Article

> Verizon CEO Ivan Seidenberg sells 85,690 shares of company stock at $44.95. Article

> Qwest Communications settles lawsuit over interactive voice patent. Article

> Software giant EMC acquires Document Sciences for $85 million. Article

> EchoStar operational split takes effect. Article

Vonage settles for survival

Mon, 17 Dec 2007 06:59:55 -0500

Vonage's first patent lawsuit loss came back in March and was something of a stunner. Verizon Communications had sued the VoIP juggernaut over alleged infringement on seven patents, and though only three of them were found to have been infringed upon, the die was cast for a year in which Vonage also was sued by and settle with Sprint and AT&T.

Some observers thought the lawsuits and settlements, coming at a time when the pure-play VoIP business model seemed more vulnerable than ever, could spell real doom for Vonage. Yet, so far, the company has responded with ongoing growth in its subscriber base. Generally speaking, the evolution of VoIP was a big story this year as Sunrocket sputtered and Skype saw a major service outage as well as an earnings charge for its owner eBay.

For more:
- Wait, Vonage got sued yet again. Read this breaking story in Light Reading
- Vonage has to pay Verizon alone $117.5 million

Vonage must pay Verizon $117.5 million

Mon, 19 Nov 2007 06:59:53 -0500

The U.S. Court of Appeals turned down Vonage's request for an appeal in its patent lawsuit from Verizon Communications, meaning Vonage must pay Verizon the full $117.5 million in damages that resulted from the initial district court ruling. Vonage and Verizon had earlier struck a deal under which Vonage would have paid Verizon only $80 million if the request to hear the appeal was accepted.

For more:
- read this report at VNUnet.com

Related articles:
- Vonage and Verizon settled late last month