Vonage phone service

cptdarel · 03-02-2007, 01:19 PM

My home communications phone bill was out of sight, avg $275.00 a month, 2 cells(family 2nd phone),2 home phone lines, computer line, (had dial up), and DSL service. wanted to drop one line as I had DSL.
So I did some changing and shopping, Vonage advertised phone service for $29.95 a Month, call anywhere, anytime and no time charge. Called them up and bought the plan.
NIGHTMARE!!!!!!!!!!!, they took my dial tone and now belongs to them, sent me a box in the mail, when it came I called and asked what this was, they said the phone hooks up to your computer via motem, they advised it will not work with DSL, (at the time), anyway it went back and forth, push comes to shove I canceled the Vonage and went back to ATT as they had the same plan, 20 bucks more, BUT vonage had my dial tone and would not release it as I had a year contract. I must have made at least 15-20 phone calls to no speak English to unwind this mess. Now the dust is settled and without a home phone for 3 week. I learned a hard lesson. But I got my bill cut less than �.

Small Fry · 03-02-2007, 01:30 PM

I don't think they can legallykeep your ported number. Did you offer the call the PUC.

Moldy45 · 03-02-2007, 01:33 PM

I have had Vonage well over a year with nothing but great results!

you really need a cable internet connection to take advantage of Vonage just as you do comcast VOIP

cptdarel · 03-02-2007, 01:36 PM

Quote:

Originally Posted by Small Fry

I don't think they can legallykeep your ported number. Did you offer the call the PUC.

no I did not, according to ATT, they said the would get it back, but vonage likes to hold them.

tmees · 03-02-2007, 05:19 PM

I had vonage for awhile and the service was sub par. Switched to sunrocket and am saving another $10 a month for a superior product.

joemomma · 03-02-2007, 05:25 PM

Thanks big time for the report!

Cool Texan · 03-03-2007, 07:24 AM

Did you get the SunRocket 2 years for $199 deal? $8 a month is not a bad deal....if you got it.

cougfan · 03-03-2007, 07:42 AM

Vonage is going down. They'll be sold or be gone within a year. I have a decent article at work I'll post here on Monday. Essentially their customer acquisition costs and churn are way out of wack for them to sustain at current rate. I do thank them for bringing VOiP into the mainstream.

cougfan · 03-05-2007, 10:56 AM

In case any of you care..........

Vonage tumbles 5% to $5 and change down from the IPO price of $16 in May.
The business ate $30 million in cash in the quarter. If you watch anything re VG, watch cash. The other figures in their financials like "operating income before marketing" are absurd.

The GAAP loss from operations was $67 million.

Customer acquisition costs (SAC) were said to average averaged $306 per new line [Vonage has never considered the equipment subsidy part of this cost, which is deeply wrong]

CPE subsidy $21.72

Churn 2.3 percent a month down from 2.6 the previous quarter.... "A portion of the improvement was related to a decision to extend the grace period for nonpayment of bills in an attempt to prevent the loss of such customers." [Ohh please... that is an improvement? Non paying customers are NOT customers]

ARPU up $27.41, up $1.41 from a year ago, driven by $1.24 in new fees Vonage began collecting in October to recover the cost of providing 911 emergency service and required Universal Service Fund contributions to subsidize phone service in rural and low-income areas. So 27.41-1.41 = $26.16

In the fourth quarter of 2006, the cost of providing phone service increased to $52 million, up from $30 million a year earlier. But on a per line basis, those costs fell to $8.13, including the new USF fees of $1.24, down from $8.50 a year earlier.
Marketing costs grew to $96 million in the fourth quarter, from $67 million in the year-ago period.

For all of 2006, Vonage lost $286 million, or $3.04 per share, on revenue of $607 million

Destroy value with each customer added

INPUTS

CPGA (one time expense)
$328.00

ARPU (per month)
$26.16

Churn (per month)
2.3%

Gross Margin
60%

Annual Discount Rate
30.00%

COGS (per month)
$10.46

Monthly Discount Rate
2.50%

Terminal value multiplier (months)
21.35

NPV
-$1.00

Rising churn from cable competition will kill them but the lack of cash will determine the date of death.

INPUTS
CPGA (one time expense) $328.00
ARPU (per month) $26.16
Churn (per month) 3.0%
Gross Margin 60%
Annual Discount Rate 30.00%
COGS (per month) $10.46
Monthly Discount Rate 2.50%
Terminal value multiplier (months) 18.64
NPV -$42.62