Vonage's (NYSE: VG) new World Premium Unlimited calling plan plays into the idea that anyone that wants to call family living abroad shouldn't be limited by calling time or be slapped with expensive fees.
Building on its existing World plan and overall company focus on the international calling markets, Vonage's new World Premium Unlimited calling plan expands the number of countries for unlimited calling from 60 to 80, including unlimited calling to mobile phones in 42 countries.
One of the trends that Vonage is seeing with its World service is that more subscribers are calling relatives on their wireless phones. However, whenever domestic callers call their relatives on mobile phones in international countries such as Colombia, the Dominican Republic, Mexico, and the UK, they are paying very high per-minute rates.
The World Premium plan offers unlimited calling to either landline or mobile callers in 42 countries including Brazil, Costa Rica, Japan, Australia, France, Spain and the UK for one flat price of $54.99 a month.
Mike Tempora, senior vice president of product management for Vonage, said that customers who use World Premium Unlimited as little as one hour a week to mobile phones in Latin America (Colombia, Dominican Republic, and Mexico) and Europe (Spain and the UK) "will save over $400 a year versus the best pay per minute rates" they have to pay to traditional wireline or wireless operators.
"The great learning for us has been that more and more of the outbound calling volume is going to mobile phones in these destinations, which I think that's a reality for most people," he said. "When they make a phone call they want to and reach a person so World Premium gives people the ability to call friends and family wherever they are at home or on their mobile, particularly in these key Hispanic markets including Mexico, Dominican Republic, Colombia and Brazil."
Outside of Latin America, Vonage continues to expand its offerings in both Europe, particularly in the UK and Spain, and Australia. Like the Hispanic market, customers calling European countries will also save up to $400 a year and $300 when calling to Australia.
What Vonage is banking on with the new offering is driving flexibility. "It appeals to people's needs to have the freedom and ability to contact those individuals they want to talk to without having to schedule appointments," Tempora said, adding that their international customers "can call them any time of day" on their mobile phone.
Vonage's bet on the international drive continues to pay off, with Vonage World and the new unlimited offering becoming a built-in churn reducer.
"Our international callers on Vonage World have a higher lifetime value, meaning they stay longer and their churn is much lower," Tempora said. "This particular product appeals to people's needs to call mobiles as well as landline so we think it will have the same effect as Vonage World in terms of making customers stickier and improving our churn for international callers."
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