Vonage is making news and noise about the patent workaround. In my view it is really 2Little2Late.
I espouse that simply because Vonage’s troubles are far greater than patent woes.
First, the last quarter their chrun was up, and new activations down. At the same time the cable MSO’s continue to report record signups for phone service, both SIP based VoIP and digital voice. Those services are like Vonage. Voice 1.0 replacements that offer a difference in billing and connectivity, but don’t try to change the phone habits, or capabilities for their customers. They just simply take the customer away from the Regional Bell Operating Company (RBOC).
Second Vonage has never innovated. With all the 2.0 technologies that have come onto the market Vonage has basically chosen to use 1.0 type solutions. For example, if you want a Softphone to take your Vonage on the road with you a second number is required. While this may help their “numbers” look better, it is a inconvenient truth that their users have to live with.
Third, the Vonage software on a USB device is hardly innovative. That solution was around for at least two years before Vonage brought it market from I2 Telecom.
Fourth, the Vonage “network” remains not much more than some Session Border Controllers, some Media Gateways and some kind of authentication processing. Calls out still occasionally show the outbound trunk line in some nearby CO, not the callers real ID. This is due to their likely not having any real softswitch in the network. Tom makes reference to Vonage currently routes calls in his post as well
Fifth, Louis Holder, long the only technical brain-trust that was close to Jeffrey Citron, reportedly departed officially last month, after being less visible than most CTO’s of high flying companies.
Sixth and maybe the most damaging is the fact the stock continues to be in the dumper and Vonage has not given any indication as to how they will ever reach profitability. Mobile and cable operators continue to take more and more users away from the RBOC’s and despite all the hype, unlike others in the VoIP space who are showing either roadmaps or market indicators of how they will grow (Packet8, Earthlink, Broadvoice, Skype, GizmoProject), Vonage just seems to try to “spin” their way through the morass they have found themselves in.
As I see it, the only real solution is an asset sale of the Vonage account base to some telco or mobile operator which wants the roughly two million customers and has a way of keeping them, not just billing them.