Vonage ready to go public, Verizon launches price war

by Darren

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

VOIP, which is an already cheap service, is about to get even cheaper as Verizon announces price cuts clearly aimed at hurting Vonage’s profitability. Vonage has been a marketing powerhouse, signing up customers at a rapid clip, but obviously, lower prciing.

Voip has been killing telcos for two years. Verizon should know

LOSING SHARE. Vonage and other VoIP providers, including cable-TV companies, have contributed to Verizon losing a whopping 9%, or 3 million, of its residential phone lines between March of 2005 and the same month of this year, according to the company’s first-quarter results, announced on May 2. In the first quarter of 2006, Vonage gained 325,000 subscribers, its best three-month period ever. There’s no way to know how many of these subscribers dropped Verizon’s residential service, but clearly Vonage is having an impact.

Verizon has been making a lot of right moves in the last few months, and it could be argued that Seidenberg’s vision is right on. Verizon bet big on broadband, and they have network capacity that is truly enviable.

Vonage, is also well worth a look at in their IPO. The stock won’t be cheap, but the company has a sizzling growth rate, which should keep investors interested. VOIP is replacing the old Baby Bell system rapidly, but there’s still plenty of time to play the sector.

If you enjoyed this post, Grab the free Superior Investor Blog full RSS feed!.