Vonage

Vonage Holdings Corp.
Vonage
Public
Traded as NYSE: VG
Industry Communications services
Founded January 2001 (2001-01)
Edison, New Jersey, U.S.
Founders Carlos Bhola
Jeff Pulver
Jeffrey Citron
Headquarters Holmdel, New Jersey, United States
Area served
 Worldwide
Key people
  • Alan Masarek (CEO)
  • David Pearson (CFO)
  • Joe Redling (COO
Products Phone over Internet (VOIP) adapter and service subscription
Services Vonage - Home, Business, & Enterprise VoIP Phone Service Provider
Revenue Increase$221.8 million (2015)
Decrease$16.58 million (2015)
Profit Decrease$8.34 million (2015)
Total assets Increase$691.15 million (2015)
Members 2.5 million subscribers (2014)
Number of employees
 1,400 (2014)
Slogan The Business of Better.[1]
Website www.vonage.com

Vonage /ˈvɑːnɪdʒ/ is a publicly held Internet telephony service provider, providing commercial telecommunication services based on voice over Internet Protocol (VoIP). The company was founded in 2001. It maintains headquarters in Holmdel Township, New Jersey and has regional offices in Atlanta, Denver, Chicago, Scottsdale, Arizona, the United Kingdom and Israel.[2][3][4][5][6]

The company first offered subscription service in the United States, then Canada in 2004 and the United Kingdom in 2005. As of 2014, Vonage claims approximately 2.5 million subscriber lines,[7] in conjunction with their services provided through mobile applications.

History

Jeffrey Citron, former CEO and majority shareholder at Datek Online, was the first major investor in the early development stages. In October 2000, Citron invested $1 million as seed capital.[8]

Initial public offering

Vonage -The Broadband Phone Company logo until 2006, orange block font over white
Vonage logo until 2006

In operation since 2001, Vonage made its initial public offering on May 24, 2006 at a price of $17.00 per share, and dropped 23.5% to close at $13.00 the next day.[9]

In the period before the initial public offering (IPO), Vonage solicited its existing customer base with an offer to buy shares of the IPO.[10] Usually only large institutional investors such as banks are able to buy shares of an IPO.[11] The price fell 12.7% in one day to close at $14.85 on the New York Stock Exchange, the worst trading day for any IPO in 2006 up to that point.

Following this, Reuters reported: "by the time customers learned that they had gotten shares, Vonage's share price had fallen" and they "were required to pay the higher $17 per share IPO price, and suffered losses when they later sold the shares."[12]

The IPO raised $531 million for the company, but Vonage's post-IPO handling of individual pre-IPO investors resulted in a class-action lawsuit.[13] The IPO and its immediate aftermath also earned Vonage a Business 2.0 Magazine award as 14th of 101 Dumbest Moments in Business for 2006.[14]

As of 2009, Vonage announced that an agreement had been reached to settle with IPO investors. The amount of the settlement was to be covered by an insurance policy covering the directors and officers of the company.[15]

The firms underwriting the IPO, Citigroup, UBS, and Deutsche Bank, were fined and ordered to reimburse customers for "failure to adequately supervise communications" with investors.[16] NYSE regulators went so far as to investigate possible short-selling.[17]

According to Reuters, "Citigroup was fined $175,000 and ordered to pay up to $250,000 in restitution to 284 potentially eligible customers. UBS was fined $150,000 and ordered to pay up to $118,000 to 126 potential customers. Deutsche Bank was fined $100,000 and ordered to pay up to $52,000 to 59 potential customers."[12]

Restructuring efforts

In 2006, in preparation for Vonage's IPO, Michael Snyder, former president of ADT Security Services replaced Vonage co-founder Jeffrey A. Citron as CEO.[18] In 2007, in an apparent restructuring effort to reduce ongoing net losses in the face of double-digit stock price slips and patent infringement issues, Snyder resigned, and Citron returned as Interim CEO.[19] The company announced plans for 10% (180) layoffs, as it secured $215 million in financing.[20]

In the second quarter of 2010, with a change in management and improved sales, the company’s stock price increased,[21] and on June 15, 2010, Vonage rose 17.06 percent, $0.36 to $2.47.[22]

As part of its restructuring effort in 2010, Vonage paid off $41 million of its debt at par, negotiated the release of more than $40 million in cash from vendors and announced a comprehensive refinancing. This resulted in a $200 million, pre-payable term loan with interest rates at 9.75%. Vonage planned to get better terms by paying down debt ahead of schedule, and by achieving sustained financial performance. Between March and June 2011, Vonage prepaid $70 million, reducing the balance to $130 million, the year-end 2011 target.[23]

Recent acquisitions

Beginning in 2013, Vonage acquired several companies, including:

Patent infringement law suits

On June 19, 2006, Verizon filed a lawsuit charging that Vonage infringed on five of Verizon's patents related to its VoIP service.[30] The patents describe technology for completing phone calls between VoIP users and people using phones on the traditional public switched network, authenticating VoIP callers, validating VoIP callers' accounts, fraud protection, providing enhanced features, using Wi-Fi handsets with VoIP services, and monitoring VoIP caller usage.

In 2007, Vonage launched a viral marketing campaign and website freetocompete.com, which garnered press coverage about Vonage, its campaign, the lawsuits, and issues of competition with established telecom corporations.[31][32][33][34]

On March 8, 2007 a jury found Vonage guilty of infringing three patents held by Verizon, and not guilty of infringing two other patents. The jury ordered Vonage to pay US$58 million, and a royalty rate of 5.5% of every sale to a Vonage customer, back to Verizon. Subsequent to this jury award, there were a series of appeals and intermediate stays on payment. Vonage was punitively ordered by the court to stop signing up new customers;[35] this was reversed on appeal three weeks later.[36] On November 19, 2007 Vonage agreed to pay ~$120 million in damages[37] to Verizon.

In other patent lawsuits, by December 2007, Vonage was ordered to pay $80 million to Sprint Nextel[38] and $39 million to AT&T Inc.[39] Another lawsuit with Nortel resulted in no monetary damages.[40]

2009 customer service settlement

In November 2009, Vonage agreed to an Assurance of voluntary compliance (AVC) with 32 states.[41] The settlement followed an investigation into complaints about the marketing of Vonage services, including confusion about availability and cost, along with advertisements involving "free" services, money back guarantees and trial periods. The consumer protection agreement also addressed complaints that some consumers were prevented from canceling the Vonage service. In the settlement, Vonage agreed to pay the seven investigating states $3 million for costs, issue refunds to complainants dating back to January 2004, and change several business practices in regards to advertising and customer retention.

Services

Vonage offers domestic, international and business calling plans for small and medium-sized businesses, mid-market businesses, and enterprises. The plans include features such as voicemail retrievable by VOIP, web, or email; 411 calling; caller ID; call waiting; do not disturb; and call forwarding, which functions when Internet connectivity is lost.[42]

In 2009, Vonage introduced a calling plan with unlimited international calling to more than 60 countries for a flat monthly rate, called Vonage World.[43] Vonage began offering smartphone applications in 2009. Its initial app provided international calling via Wi-Fi and cellular networks, and was available for Android, BlackBerry, and iOS.[44]

Vonage introduced an app for the Facebook platform in 2010, which permitted convenient calling between Facebook users on their mobile phones.[45]

In April 2011, Vonage expanded its calling plan from 60 to 80 countries, including unlimited calling to mobiles in 42 countries.[46]

Vonage expanded its service to include one extension phone line, which can be either a mobile line or a land line. A second extension initially incurred a monthly fee.[47] Vonage introduced a new mobile app, Vonage Extensions, for iPhone and Android devices,[48] and the Time to Call mobile app, offering 15-minute calls to more than 190 countries starting at a fixed fee per call, for iOS devices.[49] Superseded by Vonage Mobile (2012).

In February 2012, Vonage launched the Vonage Mobile iPhone/Android app, which superseded the Time to Call app, the Vonage Mobile app for Facebook and Vonage Mobile Classic. It allows talk and text worldwide for free with anyone else using the app.[50] When calling those without the app, users can add prepaid calling credits in fixed increments with their existing iTunes/Android Market account.

Service requirements

Vonage customers must have a broadband Internet connection, such as cable Internet service or DSL, through an Internet service provider (ISP). To initiate subscription a customer must provide a billing and shipping address in the country of service. Vonage supplies an analog telephone adapter which connects a customer supplied standard analog telephone to the Internet and the Vonage service.[51]

Residents of the U.S., Canada, and the UK may subscribe to Vonage by credit card from their respective country, but the Vonage adapter can be connected to the Internet anywhere.

Usage is generally referred to as "unlimited", though Vonage has different national "fair use" policies limiting Vonage-to-phone calls to a few thousand minutes per month in the UK,[52] Canada,[53] and U.S.[54] Evidence suggests that calls are limited to a length of 3 hours and 56 minutes.

Telephone number availability

Subscribers may choose a number in the country of the service they subscribe to for their primary line, in an area code of their choice. Subscribers can obtain additional "virtual numbers" for a monthly fee. Vonage also offers virtual numbers in Mexico, Canada and Europe. While the company supports porting a U.S. telephone number via the FCC's local number portability (LNP), not every phone number is available in every area code. Additionally, customers can transfer an existing number to Vonage, which can take up to 7 to 10 business days from the time the customer completes the Number Transfer Authorization (NTA).[55]

Emergency calls

Vonage offered 911 service on a VoIP platform for the first time in 2003.[56] For 911 location services to work, subscribers must activate the 911 calling feature by registering their full address with the company. Customers are responsible for maintaining their 911 location information at all times.[57]

If a customer dials 911 before the 911 verification is completed, the call will usually be routed to a national 911 call center where basic information must be given (name, location, nature of emergency, etc.), after which the call is transferred to a local public service answering point, like a local Police Department.[58][59]

Service cancellation

See section Customer Service settlement

To cancel service, Vonage requires that customers call a toll-free number, as service cancellation is not available on-line. Customer complaints about difficulties with the cancellation process were noted in 2006[60] and subsequently, and were addressed in the 2009 voluntary settlement with 32 U.S. states.

Quality of service and equipment compatibility

VoIP service relies upon consistent broadband-ISP uptime and VoIP-equipment compatibility with the ISP's modem. Although VoIP was initially optimized for voice, some fax equipment can be operated over VoIP,[61][62][63] but compatibility of monitored alarm systems and other devices is less certain.[64] Vonage offers "specially commissioned" Fax Line service.[65] Vonage recommends customers keep a basic traditional landline dedicated to their home alarm system and use Vonage for the rest of their calling needs.[66]

Vonage implements Voice over IP sending audio via RTP and signaling via SIP.[67]

See also

References

  1. ↑ Oster, Erik (June 18, 2015). "FCB Garfinkel Touts 'The Business of Better' for Vonage". AdWeek.
  2. ↑ Colella, Joanne (2005-05-12). "Vonage moves corporate headquarters". Vonage.com. Archived from the original on 2005-05-12.
  3. ↑ Kiefer, Eric (November 24, 2015). "Holmdel-Based Vonage Appoints New HR Chief". Patch.
  4. 1 2 Chuang, Tamara (April 1, 2015). "Vonage buys Denver's SimpleSignal in move to dominate business VoIP". Denver Post.
  5. ↑ Galth, Craig (January 2016). "Vonage: UCaaS Market a Huge Opportunity". Channel Partners.
  6. ↑ "Vonage to Wildwood". BisNow. July 2, 2014.
  7. ↑ Vonage Investor Relations FAQs. Vonage.com.
  8. ↑ "Is Vonage Sinking Or Coming Up for Air?; Stock's Dive at Debut Is Among the Deepest Seen in Recent Years". New York Times. June 3, 2006.
  9. ↑ Vonage Investor Relations FAQs. Vonage.com
  10. ↑ "Vonage | Investor Relations | Stock Information | Stock Quote & Chart". ir.vonage.com. Retrieved 2016-04-26.
  11. ↑ "Initial Public Offerings." Investorguide.com
  12. 1 2 "Citi, UBS, Deutsche Bank fined over Vonage IPO". Reuters.com. September 22, 2009.
  13. ↑ Reardon, Marguerite (2006-06-04). "Investors sue Vonage over IPO - CNET News". CNET News. Archived from the original on 2012-02-04. Retrieved 2016-04-21.
  14. ↑ Horowitz,A.; Jacobson, D.; McNichol, T.;, Thomas, O. (March 7, 2007) "101 Dumbest Moments in Business #14: Lose all your money at the low, low rate of 2 cents per minute". CNN.com, Business 2.0. Retrieved 2009-04-11.
  15. ↑ "Vonage To Settle Shareholder Suit Over IPO". TheStreet. Retrieved 2016-04-26.
  16. ↑ Shwiff, Kathy (September 24, 2009). Citi, UBS, Deutsche Fined Over Vonage IPO Wall Street Journal.
  17. ↑ Reardon, Marguerite (June 9, 2009). "Short Selling Implicated in poor performing Vonage IPO". CNET.com. Retrieved 2010-03-12.
  18. ↑ "Vonage shuffles management". CNET. Retrieved 2016-04-26.
  19. ↑ Weiss, Todd (April 12, 2007). Vonage CEO resigns, Company Moves to Cut Costs. ComputerWorld.com.
  20. ↑ Gardner, W. David (April 12, 2007). Vonage Prepares To Cut Workforce 10%. Information Week.
  21. ↑ "Vonage Holdings Corp. Reports Second Quarter 2010 Results". Vonage.com. Press release. August 4, 2010.
  22. ↑ "Vonage Holdings, Energy Recovery: Biggest Price Gainers (VG, ERII)". Wall Street Journal. June 15, 2010. Retrieved 2012-10-09.
  23. ↑ "Vonage Holdings CEO Discusses Q2 2011 Results - Earnings Call Transcript". SeekingAlpha.com. August 3, 2011. Retrieved 2012-10-09.
  24. ↑ Karkaria, Urvaksh (October 10, 2013). "Vonage picks up Atlanta's Vocalocity for $130M". Atlanta Business Chronicle.
  25. ↑ Ringle, Hayley (November 7, 2014). "Vonage acquiring Scottsdale's Telesphere for $114 million". Phoenix Business Journal.
  26. ↑ Koblalka, Dan (March 16, 2015). "Vonage Buys SimpleSignal for $25.25 Million". Talkin’ Cloud.
  27. ↑ La Monica, Paul (June 1, 2015). "Woo Hoo Hoo! Former Google exec wants to turn around Vonage". CNN Money.
  28. ↑ Buckley, Sean (August 20, 2015). "Vonage acquires iCore Networks for $92M, enhances UC strategy". Fierce Telecom.
  29. ↑ Galbraith, Craig (November 4, 2015). "Business Services, Acquisitions Drive Vonage Revenue Up". Channel Partners.
  30. ↑ Reardon, Marguerite (June 19, 2006). "Verizon sues Vonage for VoIP patent infringement". CNET News. Retrieved 2010-03-13.
  31. ↑ Mohr, Jakki J.; Sengupta, Sanjit; Slater, Stanley F. (2009). Marketing of High-Technology Products and Innovations (3 ed.). Prentice-Hall. p. 393. ISBN 978-0-13-604996-8. Retrieved October 9, 2012.
  32. ↑ "Vonage throws oranges at Verizon". telecoms.com. April 27, 2007.
  33. ↑ "Vonage Shakes Its Finger at Verizon" BusinessWeek. April 25, 2007.
  34. ↑ "Vonage, the WSJ, and the case of the missing ad copy". CNNMoney. May 3, 2007.
  35. ↑ Barakat, Matthew (AP) (April 7, 2007). "Ruling bans Vonage from signing up new customers". Pittsburgh Post-Gazette.com. Retrieved May 17, 2010.
  36. ↑ Kharif, Olga (April 25, 2007). "Vonage: Away from the Edge, for Now". Bloomberg Businessweek. Retrieved May 16, 2010.
  37. ↑ Thomson, Iain (November 19, 2007). "Vonage owes $120m after court failure". VNUnet.com.
  38. ↑ Bangeman, Eric (October 8, 2007). "Vonage, Sprint settle patent dustup for $80 million". Ars Technica. Retrieved 2010-03-13.
  39. ↑ Eddy, Nathan (December 26, 2007). "Vonage, AT&T Agree On Patent Lawsuit Settlement". ChannelWeb.com. Retrieved 2010-03-13.
  40. ↑ Gershberg, M. (NY) & Khandelwal, P. (Bangalore) (December 31, 2007). "Vonage, Nortel settle patent dispute". Reuters. Retrieved 2010-05-14.
  41. ↑ "Attorney General Corbett announces $3 million multi-state settlement with Vonage; consumers eligible for refunds". Press release. Pennsylvania Attorney General. November 16, 2009.
  42. ↑ "Vonage Standard Calling Features for VoIP Phone Service Plans". Vonage.com
  43. ↑ Woyke, Elizabeth (December 31, 2009). "Vonage's Second Calling". Forbes.com. Retrieved January 18, 2010.
  44. ↑ Wortham, Jenna (October 5, 2009). "Vonage releases calling apps for iPhone and Blackberry". Bits, NYTimes.com.
  45. ↑ Furchgott, Roy (August 5, 2010). "Vonage App calls Facebook Friends Free". Gadgetwise, NYTimes.com.
  46. ↑ "Vonage Launches New Plan With Unlimited Calling to Mobile Phones in More Than 40 Countries". Press release. Vonage.com
  47. ↑ "Vonage Extensions" Vonage.com
  48. ↑ "Vonage Adds Free Mobile Extensions". Press release. Vonage.com.
  49. ↑ "Vonage Announces Global Launch of Pay-Per-Call International App for iPhone with Direct Payment Through iTunes". Press release. Vonage.com
  50. ↑ "Vonage Launches New Mobile App Providing Free Calling and Texting to Other App Users Around the World". Press release. Vonage.com
  51. ↑ "What do I need to get service with Vonage?" Vonage.com
  52. ↑ "UK Fair Use Policy". Vonage.co.uk.
  53. ↑ "Fair usage policy". Vonage.ca.
  54. ↑ "Reasonable use policy". Vonage.com.
  55. ↑ Number Transfer – FAQs Vonage.com
  56. ↑ "Vonage Timeline". Vonage.com
  57. ↑ FCC Consumer Advisory: VoIP and 911 Federal Communications Commission
  58. ↑ "Vonage 9-1-1 dialing". Vonage.com, Features. Retrieved 2010-03-30.
  59. ↑ "Traditional 911 and Vonage 911 Dialing". Vonage.com Support.
  60. ↑ Young, Shawn and Yuan, Li (May 18, 2006) Vonage Faces User Complaints As IPO Looms Wall Street Journal.
  61. ↑ Faxing Issues and Other Devices. VoIPMechanic.com. Retrieved 2010-03-30.
  62. ↑ Hanes, David; Salgueiro, Gonzalo (2008). Fax, Modem, and Text for IP Telephony. Cisco Press. p. 130. ISBN 978-1-58705-269-9.
  63. ↑ Olejniczak, Stephen P. VoIP Deployment For Dummies. p. 170.
  64. ↑ Jones, Paul E.(Ed.); Salgueiro, Gonzalo(Ed.) et al. (November 17, 2009) SIP Forum - Fax Over IP Task Group Problem Statement. Internet Engineering Task Force IETF.org SIP Forum. Retrieved 2010-03-30.
  65. ↑ Vonage Fax Line provides the convenience of a dedicated fax number. Vonage.com
  66. ↑ Using an alarm system and Vonage. Vonage.com
  67. ↑ Vonalink (October 11, 2006). "Vonage Protocols". Vonage. Retrieved November 26, 2013.

External links

This article is issued from Wikipedia - version of the Wednesday, May 04, 2016. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.