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Sprint seeks $103 million from Vonage
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Sprint wants $103 million in damages from Vonage for patent violations, according to reports emerging from the Kansas City federal court where a jury trial got under way Tuesday. Sprint's attorney told the jury that it was entitled to a 7 percent royalty, which came to around $103 million based on Vonage revenues of $1.3 billion. Vonage is contesting Sprint's patent claims in the 10th U.S. District Court in the Midwestern city.
Vonage lost a similar battle in March, when a federal court in Virginia ordered the Holmdel, N.J. standalone VoIP provider to fork over $58 million to Verizon. The decision is pending appeal. Vonage chief Jeff Citron will address investors Monday, Sept. 10 via webcast of a presentation at the Jefferies 5th Annual Communications Conference at the Mandarin Hotel in New York starting at 1:50 PM.
The question now is how long Vonage remains a standalone. The litigation has slowed down subscriber uptake and cost the company more than $16 million this year. VoIP industry veteran Rich Tehrani tells FierceVoIP that rumors of buyouts have circulated, with the emphasis on "rumors." One theory is that Vonage would give Comcast a larger VoIP footprint. Another is that it may be an attractive acquisition for an international like Deutshe Telekom. Whatever the outcome, Vonage still has some rough water to navigate.
For More:
- The ZDNet report is here
- The Jefferies conference announcement is here
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Comments
Posted by Adam Brown | September 7, 2007 - 3:38pm
Sprint is just trying it's best to destroy any competition, or to buy it, simply because it knows that the newer smaller VoIP companies don't just have a better product, they have better management.
I would be surprised if Sprint has a strong future due to some basic business practices of theirs. Like many of the other huge wireless corporations, Sprint insists on locking people into long contracts. If Sprint was confident in their offerings they wouldn't try to lock people into staying with them.
My company is in Austin, TX and Sprint insisted that they have excellent coverage and could provide us the GPS tracking that we needed. We got over a dozen phones and two high-speed data cards. Since we started service, we have had terrible coverage, text messages take up to 12 hours to reach the recipients, and the high-speed data cards have never worked. The GPS tracking was a joke and NOT what they showed to us.
We have talked to the sales people, tech support, corporate, and have never gotten a response. Recently they have raised the text messaging rates even though we were under contract.
What is the purpose of a contract if the company can change the rates but won't let the consumer out of the contract?
People are starting to wise up about Sprints deceptive practices and how cellphone contracts do not benefit the consumer, only the vendor. All they do is lock you into service that doesn't work.
Adam Brown
Longhorn Services - longhorn-services.com
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