Friday, July 25, 2003

Past Vonage User

I used to use Vonage until I found Packet8. Vonage had a good idea with low cost VoIP telephony, but they totally screwed it up and Packet8 got it right. Vonage has horrible customer service and the Vonage DigitalVoice service is always having problems. Either the Vonage call quality is bad for days on end or randomly during the day on different calls, or the Vonage features either screw up or stop working all together at certain times. I am so happy I went with Packet8. They have more area codes and when they roll out and announce features they make sure they work. I made the switch from Vonage to Packet8 and I would recommend that you all do the same.

Vonage CEO's past leads to questions about Vonage's stability

Looks like Vonage is run by a pretty shady guy, check out the article below I copied from the NY Post. I guess I don't care if Vonage is run by a shady guy or not, but if they can't raise money because of his past I don't think Vonage will be around too much longer.


VONAGE DIALS UP JITTERY INVESTORS

By BEN SILVERMAN
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June 16, 2003 -- JEFFREY Citron has the telecommunications industry scared - which is a good thing for the founder and chief executive officer of telephony firm Vonage.
Unfortunately, Citron also has the investment community scared.

"Vonage is a hard sell because of Citron's involvement," said one investment banker who has taken a look at the company. "Everyone knows Citron can build a successful business, but you also know he has a big black spot on his resume."

Citron's black spot comes in the form of a $22.5 million fine, levied by the Securities and Exchange Commission earlier this year for making unlawful trades while heading brokerage firm Datek Online.

It was the largest fine ever against an individual. And although Citron admitted no wrongdoing, the publicity surrounding the fine is weighing down his current efforts.

But even so, Citron has the telecommunications industry taking notice.

Vonage has already garnered 25,000 customers for its cheap, unlimited long-distance service, which uses existing high-speed Internet connections and allows consumers to ditch their local telephone lines.

But getting investments for Vonage has, according to insiders, been difficult.

Because of Citron's background, fundraising is "near impossible" unless he becomes a minority shareholder and gives up his position as CEO, a source close to the company told The Post.

Vonage would not comment on any issues surrounding investment or its strategy.

Vonage announced deals with two small cable operators last week; it already has a pact with EarthLink, the nation's third-largest Internet service provider. During an industry briefing in May, Citron said the company was also conducting a trial with a major cable operator.

"The company is going to have to do more deals with broadband providers," said Joe Laszlo, an analyst at Jupitermedia. "That is going to be critical for Vonage to create a sustainable, long-term business."

While Vonage's $25.99 monthly rate blows away anything traditional telephone companies offer, the company has already been undercut by competitor Packet8 - which recently lowered its monthly rate to $19.99.

"Vonage can't cut its rates that low without losing money - and potential investors know both facts and are showing less interest in investing," said a source close to Vonage.

So if it's not Citron's past that is a problem for potential investors, is it the company's business plan?

"The telecommunications companies are doing battle over bundling - combining local, long distance and Internet access," said Dana Tardelli, senior analyst in Aberdeen Group communications services. "Vonage is sitting in the middle and will get squeezed by that."

An investment analyst who researched the company says Vonage's long-term strategy is most likely for the company to be acquired by a cable company.

"It looks like they want to come in, shake up the space, scare some people and then get out," the analyst said.

There's not doubt that Vonage is scaring people. But it remains to be seen if that's a good thing or a bad thing for the company.

* Please send e-mail to:

bsilverman@nypost.com

Wednesday, July 16, 2003

8x8 Sells French iPBX Division for $1.27 M

8x8 Sells French iPBX Division for $1.27 M

This is good news for the Packet8 broadband telephone service. 8x8 seems to be selling its others businesses to generate cash to put behind Packet8

They also seem to be cutting staff to trim their burn rate. Again, this seems to bolster their efforts for the Packet8 telephone service.

Is VOIP ready for prime time? | CNET News.com

Is VOIP ready for prime time? | CNET News.com

Vonage's CFO stated that he thinks Vonage is going to have a million customers by the end of 2004. I got to find out what he is smoking.

First, even if Packet8 did not exist, Vonage could not get to 1 million customers by the end of 2004. Let's see, Vonage launched its service in March 2002 and by July 2003 they have 34,000 customers. Do they think we are stupid? Do they really think that we are going to buy them getting 1 million customers by the end of 2004, at this rate, they are no where close to that.

Second, with Packet8 now priced at half of what Vonage costs and more features coming for the Packet8 service, Vonage will have trouble holding on to customers they already have. I was a Vonage customer, then I found Packet8 and dropped Vonage in a heart beat. I could not be happier with my decision. Not only is Packet8 cheaper, but their customer service is so much better than Vonage (that is not saying much because Vonage's customer service in notoriously horrible). But in actuality, Packet8 has the best customer service of any communications service provider I dealt with. Furthermore, the quality on Packet8 is much better than on Vonage.

Vonage must be feeling the heat. In the article their CFO also states the Vonage will have to lower their rates due to competition, aka Packet8.

Calling On the Internet (TechNews.com)

Calling On the Internet (TechNews.com)

Pretty good write up on Packet8 in the Washington Post. What I find really interesting is that Packet8 decided to keep its prices 50% lower than that of Vonage in order to get customers. But they are not putting much money into marketing as a result. I think this is a huge gamble but one that will pay off in the end for Packet8 http://www.packet8.net. It is going to take a while for Packet8 to catch on but once it does, through viral marketing, it will take off. Especially if they can continue to add features to the service. No one is ever going to beat them in price, at best someone could try to equal them, but I don't think the other VoIP service providers ever thought they would need to price so low to compete. I can't wait to see how this all pans out.

Launched the Packet8 Broadband Telephone blog

So I finally got around to launching this blog. Hopefully if you are reading this you have found the info posted useful.

You can email me at broadband_telephone@yahoo.com