30 Mar 2012Vonage VoIP

Vonage is a provider of Session Initiation Protocol (SIP) based Voice over Internet Protocol (VoIP) communication services to both residential and business customers. The company was established in 2001, pioneering a model of ISP-independent VoIP provision. Vonage offers standalone Internet telephony services to broadband users across the US, Mexico, Canada and United Kingdom. In May 2006, the operator was named as the ‘Best VoIP Operator’ by PC World for the year 2006.

As mainstream telcos began to offer their own VoIP services, Vonage no longer had the IP voice market to itself. By Q2 2008, its quarterly growth had dropped to just over 2000 (Q2 2006 saw over 250,000 additions), with overall subscriber numbers during 2008 stabilising at around 2.6 million. By the end of 2010, Vonage had just over 2.4 million subscribers, with subscriber numbers remaining stable as of September 2011. To meet the changing market demands, on 8 May 2008, Vonage entered into a strategic relationship with Covad, launching “Vonage Broadband” service. It offers Covad’s broadband to Vonage’s VoIP customers. With this deal, Vonage aims to strengthen its market positioning by offering a bundle to its customers.

During 2007, Vonage was involved in several ongoing patent disputes concerning the VoIP technology, involving Nextel and AT&T amongst others. These disputes were generally resolved, but at some cost. Vonage was ordered to pay USD 120 million and USD 80 million to Verizon and Nextel respectively, with a further USD 40 million paid to AT&T.