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.
- see this story at The Wall Street Journal