Vonage Finds New Allies, Opportunities

Vonage Holdings Corp. continues to go great guns, continuing to add new markets and lines at a rapid clip; striking comarketing arrangements with several broadband cable operators; unveiling a new basic calling plan; raising new financing; and partnering with Motorola Inc.

With more than 2,500 lines being added to its network every week, Vonage’s base has surpassed 75,000 active lines — logging more than three million calls per week. The company, which offers best-effort voice over IP service to residential and small business subscribers, has whipped up a frenzy around VoIP in recent months, having created what looks like a resurgence for this fallen-star technology.

“Vonage came along and essentially made the market real,” says Tom Valovic, program director for IP telephony at research firm IDC. “The big buzz about Vonage is it fulfilled the promise that has been talked about in the industry for many, many years – the potential to essentially disintermediate the telcos – cut them out of the loop.”

“In response to Vonage, now large carriers are talking about a response,” he adds. “I know AT&T is.”

Vonage, which just raised $35 million in new financing, today announced that through a partnership with Mid-Hudson Cablevision it will deploy broadband telephony service to customers passed by the cableco’s networks in the New York state counties of Columbia and Greene. Vonage will offer unlimited local and long distance calling throughout the United States and Canada for $34.99 a month to Mid-Hudson Cable’s broadband Internet subscriber base.

“Mid-Hudson Cablevision can now offer its customers the triple play of services: voice, video, and data. The Vonage solution is the perfect value-add service for MSOs; it is a value-added service for additional revenue and a retention tool to keep customers happy and reduce churn,” says Dan Elwell, national account manager, MSO/cable and major markets. “This partnership is a win-win situation for everyone. Most importantly, Mid-Hudson customers now have the power to select an enhanced digital telephony service and enjoy Vonage’s high-quality, low cost, feature rich service.”

Vonage earlier this month announced a similar deal with NuVision, New York City cable company, and CableAmerica, which sells services in Arizona, California, Michigan and Missouri.

Also this month, Vonage announced its new Residential Basic Plan, which offers 500 minutes of local, toll and long-distance calling throughout the United States and Canada for $14.99 a month. It is part of a tiered family of rate plans offered by Vonage for residential and small business customers interested in taking advantage of the Motorola-Vonage telephony solution.

Vonage announced today that Motorola Inc. Broadband Communications Sector, the leading provider of cable modems purchased at retail, will serve as its exclusive provider for voice terminal adapters. The Motorola VT1000v initiates calls using session initiation protocol (SIP) and supports multiple codecs to optimize performance.

It supports up to two telephone lines and contains two Ethernet ports, one to connect to the subscriber’s broadband modem (cable or DSL) and another to connect to a home computer. The product supports all basic call features and fax as well as a wide range of advanced features including three-way calling, caller ID, call forwarding, and voicemail messaging.

“Motorola’s leadership in creating broadband-enabled home electronics products, strong retail presence, and brand recognition position the company as an ideal partner for Vonage as we expand our service,” says Jeffrey Citron, chairman and CEO of Vonage. “This partnership enables us to offer Motorola’s consumer-friendly, feature-rich voice terminal technologies — a simple way for consumers to benefit from Vonage’s attractively priced, tiered calling plans.”

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