VoIP Service Provider

Vonage

Doug Mohney — Thu, 13 Nov 2008 10:13:47 -0500

Founded: 2001

Status: Suffering a death of a thousand cuts

What does it do: Independent VoIP service provider

VoIP trivia fans know that Vonage origins have a link to Jeff Pulver's "Min-X.com" voice minutes futures exchange. Pulver apparently sought out Jeff Citron as an investor and, instead, ended up investing in Vonage at the start-up stage when the smoke cleared.

Now that we've gotten that out of the way, where do we begin to document the turbulent pot-hole-filled road Vonage has been on? The company's appetite for capital has been ginormous, sucking down $658 million in VC money and private debt before going public. Its IPO raised around $531 million with an offering price of $17 a share, but the company fumbled the way it sold shares to its own customers, resulting in a lawsuit.

Speaking of lawsuits, Vonage has been successfully sued for patent violation by Verizon ($120 million), Sprint ($80 million), and AT&T ($39 million). (Nortel also sued on patent violations, but lost; draw your own conclusions).

In its latest adventures in finance, the company managed to work out a deal to refinance $253 million in debt with Silver Point Finance after four tries. This wasn't enough to get the stock price above a buck, so the NYSE sent over a notice of delisting if the price doesn't come back up within six months.

However, Vonage has yet to escape its three chronic diseases - financial losses quarter after quarter, a churn rate stuck at 3 percent per month, and Captain Insano marketing expenses of $272.24 per subscriber. If a typical customer is paying you $24.99 per month and you have to knock out $10 per month for operational expenses (like providing the service and billing him), that gives you a payback of Way Too Long.

Broadcom announces high-density VoIP DSP

Pete Wylie — Wed, 01 Oct 2008 16:50:01 -0400

At Broadband World Forum, Broadcom announced a new high-speed VoIP digital signal processor.The new processor, called the BCM6515, targets next-gen OEM designs of multi-service access nodes (MSANs), IP digital subscriber line access multiplexers (IPDSLAMs) and deep fiber multi-dwelling units (MDU).

The BCM6515 is designed to enable low-cost, hiqh-quality VoIP for easy bundling with high speed internet, IPTV and converged wireless services. Its features include high-speed voice coding, voice compression, IP processing, and embedded adaptive jitter buffering with direct uplink network connectivity, according to Broadcom's release. A high-density design enables encoding of up to 72 complex voice streams.

As is typical, Broadcom has also announced a reference design for OEMs. The BCM96515 reference design is a joint collaboration between Broadcom and Zarlink and includes VoIP DSP processing, a Broadcom Gigabit Ethernet transceiver chip, and Zarlinks VoiceEdge next generation carrier chip set to provide audio line processing with integrated testing, SLIC circuits, and a multi-port voice control processor to provide real-time call control functions.

For more:
- see the Broadcom release here

More Q2 Successes for VoIP

Pete Wylie — Fri, 15 Aug 2008 16:22:55 -0400

Two more VoIP companies posted solid second quarter results Friday, following the recent trend of growth in the industry. Cordia Corp., a service provider offering a mix of CLEC and VoIP services, and i2Telecom, a manufacturer of VoIP products, both posted significant gains from the same quarter last year.

Although Cordia is still operating at a loss, it increased revenue by more than $5 million from the same quarter last year. Also boding well for future prospects, the company reported a 280 percent increase in its VoIP business.

i2Telecom reported income of nearly $3 million for the quarter, compared with a $2.1 million loss it took the same quarter in 2007. The company credited the successful sale of a patent and a new partnership with Green Sky Solutions Inc. for the positive ledger this quarter.

For more:
- See the Cordia press release
- See the i2Telecom press release

XO's latest financials

Doug Mohney — Tue, 12 Aug 2008 14:31:01 -0400

XO reported strong second quarter results, despite a weakening economy and industry consolidation. Revenues continue to move from legacy to IP.

Revenues for the quarter were $367.4 million, with adjusted EBITDA of $26.1 million. XO had a net loss of $29.7 million, $13.2 million lower than the first quarter of 2008. More importantly, XO continued to see revenues move from legacy TDM services to Data and IP. On a year over year basis, data and IP revenues grew more than 32 percent; XO offers a mix of services including collocation, dedicated Internet access, Ethernet, MPLS, private line, VPN, carrier VoIP and commercial VoIP services.

XO's Flex IP services continued to perform well, with second quarter sales exceeding all previous quarters. High bandwidth requirements comprise the majority of sales for Flex, according to the company. MPLS, launched one year ago, is already among XO's top five selling products.

For more:
- XO 2Q08 financials

Related articles
XO Hosting Mobile UC
XO expands wholesale IP play

U-verse gets Voice

Doug Mohney — Mon, 04 Aug 2008 16:30:20 -0400

AT&T has launched a massive trial of its new U-verse voice service, making it available to all current U-verse IPTV customers in the San Antonio area.

The bundled offering now gives AT&T a "triple play" of voice, IPTV, and broadband. U-verse voice calls will be routed over the company's U-verse network rather than the "public" Internet.

New features to the U-verse voice services include the ability to combine VoIP service with AT&T wireless voice mail, an online management portal to manage call preferences and voice mail from a web browser, a click-to-call feature within a call history feature, and a "Locate Me" simultaneous ring on up to four phone numbers.

An unlimited voice plan (Canada and the U.S.) will cost $40 a month, while the Voice 1000 plan will cost $30 a month and include 1,000 calling minutes to anywhere in the U.S. Customers can add a second line to U-verse voice service for $20 a month.

AT&T estimates that U-verse currently has around 549,000 subscribers around the country; a relative drop in the bucket when compared to cable company subs or Verizon's 2 million FiOS customers.

For more:
- Network World reports on AT&T launching voice for U-verse

Related articles:
AT&T to bundle U-verse, VoIP
AT&T CallVantage: Dead or Rebranded?

SPOTLIGHT: Cablevision Tops 2M VoIP Lines

Doug Mohney — Sat, 02 Aug 2008 17:16:34 -0400

Cablevision has announced that its Optimum Voice VoIP service has gone over 2 million in-service phone lines.

In a press release, the New York-based cable company points out that the product has attracted more than a third of its "homes passed" by its fiber optic network, as well as a growing base of business customers. Not only that, but the company's VoIP service has been named by PC Magazine readers as the top service for four years running.

For more:
- Cablevision announces over 2 million VoIP lines

Related articles:
Cablevision adds 81,000 voice customers
Cable Raids Independent VoIP Companies, Telcos

SPOTLIGHT: Consolidation in Poland

Doug Mohney — Tue, 15 Jul 2008 10:14:41 -0400

At least one player in the Poland VoIP scene expects the domestic market to consolidate through buyouts and that additional services will emerge. FreecoNet believes the trend is inevitable based on what is already happening outside of the country, with smaller VoIP operators being snapped up by bigger ones.

Future growth lies in the implementation of FMC and the integration of VoIP and GSM. With the appearance of "free" calling within a network, creating and selling value-added services is the only way to regain lost revenues.

For more:
- Polishmarket.com VoIP market consolidation

Related articles:
Europe VoIP to reach 88 million
Jajah Opens Up Eastern European Service

Skype's international unlimited plan

Thu, 24 Apr 2008 06:59:58 -0400

Need an unlimited international calling plan? Or just to get people talking about something other than being sold out of eBay? Skype has announced "unlimited" (yes, there is fine print) calling to more than a third of the world's population, with a monthly flat rate international calling plan to landline customers in 34 countries.

Skype's three new subscription plans require no long-term contract and have no limitations on time of day or day of week. Unlimited calls to landlines in the European country of your choice starts at $4.69 per month. Unlimited landline calls to 20 European countries costs $10.97 per month. Unlimited landline calls to 34 countries worldwide is $14.23 per month. An additional 33 percent discount is available by signing up before June 1 with a three- or 12-month plan.

And the fine print? Callers are limited up to 10,000 minutes per month--over five hours a day. Only the U.S. and Canada plan includes unlimited calls to cell phones and landlines; you can get a bundle of 200 minutes to landlines and cell phones in Asia for $9.46 per month. And to explain the Brazil rates would require another paragraph.

For more:
- Skype unlimited international calling announcement

Related articles:
Skype's vision for next 10 years
Skype looking strong with Q1 revenue jump

The ultimate E911 compliance test: Dial

Mon, 21 Apr 2008 06:59:56 -0400

One of the ongoing concerns with VoIP has been the ability of service providers to effectively deliver a 911 call to the appropriate authorities. In an ideal world a VoIP-transported 911 call should go directly to the closest public safety access point (PSAP) and display both the phone number you are using as well as the location of the phone.

Public safety officials in Lee County, Fla. have come up with a quick and easy way for VoIP subscribers to verify their 911 service should work as defined: Call them. Specifically, Lee County Public Safety is asking people with VoIP service to set up an appointment to test their service to see if 911 works as advertised. Users have to call the County 911 program manager on his (non-911) phone line to schedule a time for a trial call, then call 911 at the specified time to verify both caller ID information and address associated with the phone number.

Testing has been going on for a few weeks, but so far only a few test calls a day have taken place. Officials would prefer "thousands" of test calls, since anywhere from 2 percent to 20 percent of VoIP services may either not have 911 functioning correctly or may have the wrong address with the registered phone number. Neither Vonage nor Comcast will tell officials how many customers they have; public safety officials estimate the two providers have 3,000 or more subscribers in Lee County.

For more:
- Lee County News-press Com 911 Testing article

Related articles:
e911 bill provides VoIP liability protection
House gives nod to VoIP E911
FCC clarifies e911 accuracy requirements

Global Crossing Grows Latin America

Mon, 14 Apr 2008 06:59:57 -0400

Global Crossing has made two announcements in the past 30 days touting their upgrades in Latin America. (If that isn't enough of a clue the IP business is hot in the Southern hemisphere, there's also translations of GC's website in Portuguese and Spanish). In its latest announcement, the self-styled "IP solutions provider" said it has put "Supercore" routing platforms into Buenos Aries, San Tiago, and San Paulo. The company had previously installed Supercore routers in St. Croix, USVI and Fort Amador, Panama.

The announced upgrades effectively triple the company's previous core capacity in the region and enables OC-192/10 Gbps SONET connections on its 12,000 route miles South American Crossing (SAC) undersea fiber-optic cable system; last month, Global Crossing announced it expanded SAC by 100 Gbps of transport capacity. The company cites the need to handle rising demand for 10 Gbps Ethernet services and the need to future-proof for services faster than 10 GBps without the delays caused by forklift upgrades.

IDC is projecting the Latin American market for enterprise IP services to grow from $2.94 billion in 2008 to $4.3 billion in 2011, at an annualized rate of 10.1 percent.

For more:
- Global Crossing's Extension to Latin America press release.
- Last month's announcement of Global Crossing's 100 Gbps Latin America Upgrade.

Related articles:
Global Crossing Expands VoIP Local Service to 16 Mexico Markets
Global Crossing in Hong Kong, Rome, Milan

TruPhone Buys SIM4travel

Mon, 14 Apr 2008 06:59:56 -0400

VoIP operator TruPhone has bought roaming operator SIM4travel, planning to combine operations and provide travelers with low cost phone calls over cellular. TruPhone is paying around $2.64 million in cash and $2.56 million in stock to get SIM4travel's travel SIM capability and its' Mobile Virtual Network Enabler (MVNE) platform. Other assets in the deal include SIM4travel's infrastructure, customer base, distribution, and staff in Portugal and London.

TruPhone has been providing free and local calls through the Internet and WiFi, supported through a VoIP client on Nokia N and E-Series phones. The deal now gives the company the ability to provide global mobile operator services. It also provides a consumer channel since SIM4travel sells SIM cards through Tesco, WHSmith, Carphone Warehouse and other stores.

From a regulatory standpoint, the purchase might make it easier for Truphone to claim to be a mobile operator and get mobile termination fees. T-Mobile and Truphone are in court, T-Mobile arguing that it doesn't have to pay such fees since a Truphone call routed over the Internet costs nothing to deliver.

For more:
- Truphone blog announcing acquisition of SIM4 Travel
- Register write-up of Truephone SIM4 Travel deal

Mobile Enterprise VoIP: Has its time finally come? Maybe, maybe not

Mon, 24 Mar 2008 07:59:57 -0400

Mobile VoIP in Europe just can't get any respect..at least not at the moment. While mobile enterprise is seeing a boom--to the tune of increased spending in the 21 percent range year over year--it hasn't yet filtered down to VoIP, says Forrester Research analyst Phil Sayer. "I don't think enterprise mobile VoIP is going anywhere at the moment."

While VoIP is elbowing its way into enterprise as legacy systems grow old and die, it's struggling, despite being pushed along by start-ups and the odd telcos. At the moment, it's a matter of economics--and a perceived lack of user friendliness. Mobile operators aren't putting packages of VoIP minutes together, Sayer says, "they're positively trying to make it go away. So there is no immediate benefit for the business user or purchasing folks to adopt it." Because VoIP generally needs a smartphone, the market is further restricted.

But mobile enterprise VoIP has potential, lots of it, especially as employees become less tied to their offices. VoIP operator Truphone--which recently hooked up with conference-calling specialist Iotum--says more than half of its subscribers in 149 countries use VoIP for enterprise.

Says Forrester's Sayer about the potential for growth: "Sooner or later the dam will burst."

For more:
- See the complete article in the Financial Times

Related articles:
Vodafone gets behind VoIP Report
T-Mobile CEO says wVoIP won't connect Report

Australian operator says VoIP won't work on WiMAX

Mon, 24 Mar 2008 07:59:56 -0400

VoIP providers may be eagerly anticipating Clearwire and Sprint's next dance onto the nationwide WiMAX network floor, but at least one early adopter, Australian Garth Freeman, CEO of Hervey Bay's Buzz Broadband, labeled the technology a "miserable failure." Freeman, who operated--and closed--Australia's inaugural WiMAX network, told a pro-WiMAX audience at a Bangkok conference last week that the technology was rife with bugs that made it unacceptable for use with VoIP and other Internet apps. Specifically jitter and latency rates as high as 1MS, and "non-existent" line of sight performance beyond 1.8 miles. Add poor indoor performance outside a quarter mile, and WiMAX-supported VoIP installations begin to look a little pie-in-the sky.

Buzz isn't alone in decrying WiMAX penetration issues. At an IEEE conference in 2007, India's VSNL said it was recording loss of signal just two football field's away from base stations.

Freeman went on to lambaste the "opportunistic hype" surrounding WiMAX, concluding with a warning to the gathering that "WiMAX may not work." A year ago, just months after launching WiMAX, Freeman said Buzz had signed 10 percent of its target WiMAX market, using VoIP value as a come on.

For more:
- Read about Garth Freeman's tirade in CommsDay

Related articles:
HelloSoft launches VoIP for Soc Report
Clearwire launches VoIP over WiMAX network Report

Just how bad can things get at Vonage?

Mon, 24 Mar 2008 07:59:55 -0400

The Wall Street Journal reports that Vonage auditor BDO Seidman says there is "substantial doubt" the Internet telephony pioneer can continue as a going concern. Vonage last week said its fourth quarter losses were $13.8 million, 24 percent higher than the $11.1 million in losses it reported in a February press release, and said it ended the year with a $217 million working capital deficit.

Vonage wants to alter the terms of a $253 million debt payable in December, telling the SEC earlier this month that a cash outlay that large would threaten its ability to operate. Vonage says it may up the interest rate to make the notes more appealing as longer-term investments, and might be able to pay some of the issue with cash or equity-type securities.

Vonage interim CEO Jeffrey Citron last month told analysts the resolution of the $253 million debt was the company's major priority.

For more:
- Check out the Wall Street Journal article

Related articles:
Vonage hopes to negotiate debt terms Report
Vonage scrambles as debt looms Report
Vonage Q4 still shows problems Report

VoIP wins exemption from USF in Nebraska

Mon, 24 Mar 2008 07:59:54 -0400

It looks like there's finally a silver lining to Vonage's recent woes; the U.S. District Court in Lincoln has ruled the troubled company isn't required to pay universal service fees to the Nebraska Public Service Commission. The VoIP provider has maintained that it's exempt from paying the fee because it's an information service, not a telecom. Carriers are charged by states to help subsidize service in poor and rural areas and to schools and community organizations. Telcos want Vonage and other VoIP providers to play by the same rules they're required to abide by, and to pay the same fees.

Vonage won a similar suit against the Public Service Commission in Minnesota. The Nebraska ruling also means other VoIP providers offering service in Nebraska will no longer be required to pay service fees. The NPSC has until April 2 to appeal the ruling.

For more:
- Read the Associated Press story

Related articles:
Top VoIP regulatory trends for 2008 Report
FCC levies service fees on VoIP operators Report

Twenty percent annual growth for VoIP

Tom Burton — Mon, 25 Feb 2008 06:59:58 -0500

The U.S. residential VoIP market is predicted to grow at a compound annual rate of 20 percent over the next four years according to the Telecom Industry Association's 2008 Market Review & Forecast. The study found the U.S. VoIP residential market has trebled over the last two years to 15.9 million connections and predicted there would be 32.3 million subscribers by 2011. Revenues are expected to grow at a similar pace, up 19.2 percent CAGR over the period 2008-2011. Revenue is expected to double over the next four years, reaching $10 billion by 2011.

The bullish forecasts have once again been put together by Wilkofsky Gruen Associates. The firm has been producing forecasts for the TIA for 12 years. Speaking at the release, Arthur Gruen said telecoms were not immune to the current downturn. But, he said, unlike the 2001 dot com crash, telecoms were not at the heart of this downturn. Gruen said demand was driving investment in contrast to the supply induced crash of early 2000: "We could see a bit of a pause in 2008 reflecting a downturn in the economy, particularly by enterprises who want to hold back or delay some of their investments. Nevertheless, the enterprises are focused on converting to IP, and a lot of the plans are already in place. We don't expect them to delay that."

The report said cable companies were expected to continue dominating VoIP take up, despite having higher prices than the pure-play VoIP companies like Vonage. Cable had 11.6 million subscribers at the end of 2007, 73 percent of the market, up from 6.5 million subscribers, equating to 61 percent of the market in 2006. "We expect the local phone companies to gain market share as they begin bundling VoIP with their new video services in addition to marketing VoIP outside their home territories to bolster their subscriber counts."

For more:
- TIA forecast

Related articles:
VoIP booms as telecoms struggle Report
Wholesale VoIP predicted to surge Report

VoIP Inc. claims $1.25 billion patent

Tom Burton — Thu, 14 Feb 2008 06:59:57 -0500

VoIP Inc. is at it again. Notorious for puffing its business with relentless press releases, it has issued another claiming its click-to-call patent is worth a staggering $1.25 billion. And it has retained a California law firm to take action against 100 companies--many of which are Fortune 500 companies.

VoIP Inc. share price is now below a penny after it was forced to close its VoIP business last week, and the firm has not been contactable since. But despite a gaggle of disgruntled creditors, customers and investors the company continues to issue press releases claiming it offers "turnkey Voice over Internet Protocol (VoIP) communications solutions for service providers, resellers and consumers worldwide."

The latest VoIP Inc. press release says that "based on information provided from some of the industry's leading technology experts and the fact that this (click-to-call) technology is being implemented at an ultra-hyper rate domestically and internationally, Byron T. Ball, attorney at BALL LAW FIRM, LLP, stated, "I believe the current value of the patent could exceed 1.25 billion dollars.""

"We have identified over 100 companies that have willfully infringed on our patents. We intend to stop the infringement and defend our technology and the patents behind it. These patents and the business they represent will be utilized to provide the shareholders with the value they deserve and have long awaited," stated CEO Anthony Cataldo.

Neither VoIP Inc. nor Ball returned calls to explain exactly how they determined the patent was worth $1.25 billion. The action follows a flock of successful and pending VoIP patent claims by various telcos and vendors. Vonage has clocked up $240 million in patent breaches.

Florida-based VoIP Inc. has had a colorful history, starting life as a tea trading company. Its founder Steve Ivester is a convicted felon and its former chief operating officer Shawn Lewis left after pleading guilty to drug charges. Lewis declared himself bankrupt as has the company's chief accounting officer Robert Staats. Staats was the media contact for this latest press release.

For more:
- VoIP Inc. Release
- VoIP Inc. may sue you Rich Tehrani Blog
- VoIP Inc. lawyering up for a massive click-to-call patent infringement suit Russel Shaw Blog
- Verizon's VoIP Patent Game Continues Gigaom Blog

Related Articles:
VoIP Inc. goes down owing Verizon $8 million Report
VoIP Inc. takes a $24M hit, closes network and loses staff Report

What's ailing Skype?

Thu, 03 Jan 2008 06:59:58 -0500

From a high-flying success story in 2005, Skype spent much of 2007 traveling down a fairly bumpy road.

What kind of bumps were showing up for the consumer-VoIP power? The most troubling was probably the four-day blackout that hit in August. Blamed originally on a Microsoft "Patch Tuesday" update, the final answer wasn't dramatically more reassuring for most customers. Then there was the decision (quickly reversed) to limit high quality video to three Logitech web cams and computers with Duo Core processors.

The occasional glitch is almost expected for software, but not for telephone service. Add to this a series of limitations in the consumer service arena and questions about new-parent eBay's long-term commitment to VoIP, and you have a set of problems that customers want to see fixed--sooner, rather than later.

For more:
- VoIP-News has the complete article here

Related:
Skype joins the IM war Report
Skype launches high quality video Report

Global IP carrier sales top $1B in Q3

Mon, 26 Nov 2007 06:59:58 -0500

Worldwide IP telephony carrier market quarterly revenues have exceed $1 billion for the first time in the third quarter of this year, according to market research by California based Dell'Oro Group.

The strong market results was driven by robust softswitch sales as carriers continue to convert their networks to IP. "The increase in softswitch sales this quarter was particularly encouraging due to the strong growth of POTS and T1/E1 subscriber license shipments, which more than doubled year-over-year," said Greg Collins, Vice President at Dell'Oro Group.

While $1 billion in quarterly IP carrier sales is a record, it suggests telcos are still reluctantly moving away from their POTs technologies. "The surge in these license shipments indicates that service providers are accelerating their slow transition away from circuit switches to IP-based solutions as they convert their legacy POTS lines to softswitches" Collins said.

The Dell'Oro report found Nortel and Nokia Siemens Networks each accounted for almost 50 percent of the increase in softswitch revenue for the quarter.

According to Dell'Oro all IP Telephony carrier market segments contributed to the third quarter's record revenue. "The emerging session border controller (SBC) and voice application server markets each grew in double-digits compared to the prior quarter, while media gateways, the largest market segment, showed modest sequential growth."

More Reports:
- Dell'Oro press release

Related articles:
- One trillion VOIP minutes Report
- Opportunity vs. risk: Fixed-Mobile Convergence Report

Lingo rated top of the pops for VoIP

Thu, 01 Nov 2007 07:59:55 -0400

Wired magazine has tested and compared eight VoIP services for their Winter 2008 Test issue with Lingo selected as "Editors' Pick." The test rated cost, features and quality and Lingo won over Packet8, AT&T, Comcast, SIPphone, Skype, Verizon.

Wired's verdict: "Looking for a bargain? Lingo's low monthly fee covers unlimited calling to the U.S., Canada, Puerto Rico, and more than 20 other countries, including Australia and most of western Europe. Although we initially encountered an annoying echo with overseas connections, after contacting the company for help, the problem went away. Domestic calls were superb, sound wise."

Lingo was of course happy: "We are delighted to be chosen as 'Editors' Pick' among VoIP service providers by a respected magazine such as Wired," said Srinath Narayan, vice president of consumer markets for Lingo. "Their selection of Lingo validates what we always knew we offered--a product with a wide range of features, high quality, and a very attractive price."

For More:
- Wired's Best VoIP services Report

Related Articles:
ISP-Planet says Vonage top VoIP carrier Report
VoIP quality on the upswing Report