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{{Infobox company
  
{{Infobox company
 
|company_name = Vonage Holdings Corp.
  
|company_name = Vonage Holdings Corp.
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[[Image:Vonage logo until 2006.png|thumb|alt=Vonage -The Broadband Phone Company logo until 2006, orange block font over white|Vonage logo until 2006]]
  
[[Image:Vonage logo until 2006.png|thumb|alt=Vonage -The Broadband Phone Company logo until 2006, orange block font over white|Vonage logo until 2006]]
   
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'''Vonage''' {{NYSE|VG}} ({{IPAc-en|icon|ˈ|v|ɑː|n|ɪ|dʒ}}) is one of the largest VoIP providers and an industry pioneer. The company's name is a play on their motto "Voice-Over-Net-AGE".{{citation needed|date=March 2010}} <!-- NOT from the "Min-X" article. A book or magazine, please -->
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'''Vonage''' {{NYSE|VG}} ({{IPAc-en|icon|ˈ|v|ɑː|n|ɪ|dʒ}}) is one of the largest VoIP providers and an industry pioneer. The publicly held company is a provider of low-cost communications services connecting individuals through broadband devices worldwide. Its name is a play on their motto "Voice-Over-Net-AGE."<ref>[http://tarr.uspto.gov/servlet/tarr?regser=serial&entry=78213936 USPTO Latest Status Info] U.S Patent and Trademark Office, Trademark Applications and Registrations Retrieval, January 13, 2004.</ref>
   
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The company promotes itself as "Vonage the Broadband Phone Company"<ref>[http://tarr.uspto.gov/servlet/tarr?regser=serial&entry=78213936 USPTO Latest Status Info] U.S Patent and Trademark Office, ''Trademark Applications and Registrations Retrieval'', January 13, 2004. Retrieved 2010-03-31.</ref> in the U.S. <!-- and as "Leading the Internet Phone Revolution." This is not trademarked or unique. It's used by MANY companies --Lexein --> Founded in [[Edison, New Jersey|Edison]], [[New Jersey]], Vonage is now located in [[Holmdel Township, New Jersey]].<ref name="vmove">{{cite web |url=http://www.vonage.com/corporate/press_news.php?PR=2005_05_12_0 |title=Vonage moves corporate headquarters |archiveurl=http://web.archive.org/web/20060408005213/http://www.vonage.com/corporate/press_news.php?PR=2005_05_12_0 |archivedate=2005-05-12| first=Joanne |last= Colella |date=2005-05-12 |publisher=Vonage.com}}</ref><!-- cited to answer a previous "citation needed"--> The company first offered subscription service throughout the [[United States]], then expanded into [[Canada]] in 2004 and the [[United Kingdom]] in 2005. As of March 2010, Vonage held nearly 2.4 million subscriber lines.<ref>[http://ir.vonage.com/faq.cfm?faqid=2 Vonage Investor Relations FAQs]. Vonage.com.</ref>
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Founded in [[Edison, New Jersey|Edison]], [[New Jersey]], Vonage is now located in [[Holmdel Township, New Jersey]].<ref name="vmove">{{cite web |url=http://www.vonage.com/corporate/press_news.php?PR=2005_05_12_0 |title=Vonage moves corporate headquarters |archiveurl=http://web.archive.org/web/20060408005213/http://www.vonage.com/corporate/press_news.php?PR=2005_05_12_0 |archivedate=2005-05-12| first=Joanne |last= Colella |date=2005-05-12 |publisher=Vonage.com}}</ref><!-- cited to answer a previous "citation needed"--> The company first offered subscription service throughout the [[United States]], then expanded into [[Canada]] in 2004 and the [[United Kingdom]] in 2005. As of July 2011, Vonage held nearly 2.4 million subscriber lines <ref>[http://ir.vonage.com/faq.cfm?faqid=2 Vonage Investor Relations FAQs]. Vonage.com.</ref> and now offers mobile applications globally.
   
 
==History==
  
==History==
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===Early: 1999-2000===
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[[Jeff Pulver]], noted VoIP proponent and owner of the successful VON conferences, incubated Vonage, then called Min-X.com, at his offices in [[Melville, New York|Melville]], [[New York]] between December 1999 and December 2000. Based on his experience at [[Cantor Fitzgerald]], Pulver developed a market where IP Telephony minutes and capacity could be traded in both spot and futures contracts. By the summer of 2000, Min-X.com had about six employees who were either technologists or former bond or stock traders.
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Jeffrey Citron, former CEO and majority shareholder at Datek Online, was the first major investor in Min-X/Vonage. In October 2000, Citron made an initial investment of $1 million.<ref name=" nytimes ">{{cite web |url=http://query.nytimes.com/gst/fullpage.html?res=990CE1DB1731F930A35755C0A9609C8B63&sec=technology&spon=&pagewanted=all | title=Is Vonage Sinking Or Coming Up for Air?; Stock's Dive at Debut Is Among the Deepest Seen in Recent Years|author= |date= June 3, 2006|work= |publisher=New York Times |accessdate=}}</ref>
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In December 2000, Citron and Carlos Bhola, an investment banker, unveiled a new name for entity; "Vonage.” The name borrows Pulver's "VON" acronym for "Voice on the Net" and the temporal meaning of the word "age," combining to form "Vonage,” heralding the start of a new era for consumer communications services (the age of VON). In January 2001, the newly incorporated Vonage moved to Edison, NJ.<ref>Vittore, Vince (November 17, 2003) [http://telephonyonline.com/switching/print/telecom_fantastic_vonage/ Fantastic Voyage]. Retrieved 2010-03-30.</ref>
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The 30 person start-up team worked out of an old testing facility building located in an industrial part of Edison developing ways to shake up the calling industry. With card tables and folding chairs as office furniture, Vonage became one of the first companies to bring VoIP to consumers. In 2002, the management team elected to enter the direct to residential and business phone service markets under Vonage Direct. Growing at an exponential rate in late 2002 and into 2003, Vonage literally knocked down wall after wall of its office space to expand. Throughout its expansion, the team celebrated each sale by ringing a bell, something the Company still does today.
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===Initial public offering===
  
===Initial public offering===
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In operation since 2001, Vonage went public on May 24, 2006 at a price of $17.00 per share, and dropped 23.5% to close at $13.00 the next day.<ref>[http://ir.vonage.com/stockquote.cfm Investor Relations Stock Quote]. Vonage.com</ref>
  
   
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In operation since 2001, Vonage went public on May 24, 2006 at a price of $17.00 per share, and dropped 23.5% to close at $13.00 the next day.<ref>[http://ir.vonage.com/stockquote.cfm Vonage Investor Relations FAQs]. Vonage.com</ref>
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In the period before the [[initial public offering]] (IPO), Vonage solicited its existing customer base via automated phone call announcements and e-mails with an offer to buy shares of the IPO (usually only large institutional investors such as banks are able to buy shares of an IPO).<ref>[http://www.investorguide.com/igu-article-821-stock-basics-initial-public-offerings.html Initial Public Offerings]. Investorguide.com]</ref> The price fell 12.7% in one day to close at $14.85 on the New York Stock Exchange, the worst trading day for any IPO in 2006 up to that point. The IPO raised $531 million for the company. Vonage's post-IPO handling of individual pre-IPO investors resulted in a class-action lawsuit.<ref>Reardon, Marguerite (June 4, 2006) [http://news.com.com/2100-1036_3-6079765.html Investors sue Vonage over IPO]. CNET.com.</ref> As of 2009, Vonage announced that an agreement in principle had been reached to settle with IPO investors.<ref>Vonage.com (June 17, 2009) [http://pr.vonage.com/releasedetail.cfm?releaseid=390447 Vonage Holdings Corp. Announces Agreement in Principle to Settle IPO Litigation]. Vonage.com Investor Relations. Press Release.</ref> The firms underwriting the IPO, [[Citigroup]], [[UBS]], and [[Deutsche Bank]], were fined and ordered to reimburse customers for "failure to adequately supervise communications" with investors.<ref>{{cite web |url=http://online.wsj.com/article/SB125363508003831103.html |title=Citi, UBS, Deutsche Fined Over Vonage IPO |date=September 24, 2009 |first=Kathy |last=Shwiff |publisher=Wall Street Journal}}</ref> [[NYSE]] regulators went so far as to investigate possible short-selling.<ref>{{cite web |url=http://news.cnet.com/Short-selling-implicated-in-poor-performing-Vonage-IPO/2100-1014_3-6082157.html?tag=mncol;txt |title=Short Selling Implicated in poor performing Vonage IPO |first=Marguerite |last=Reardon |date=June 9, 2009 |publisher=CNET.com |accessdate=2010-03-12}}</ref><!-- Followup needed -->
  
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In the period before the [[initial public offering]] (IPO), Vonage solicited its existing customer base with an offer to buy shares of the IPO.<ref>[http://ir.vonage.com/stockquote.cfm Investor Relations Stock Quote. Vonage.com]</ref> The price fell 12.7% in one day to close at $14.85 on the New York Stock Exchange, the worst trading day for any IPO in 2006 up to that point.
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As a result, by the time customers learned that they had gotten shares, Vonage's share price had fallen. FINRA said the customers were required to pay the higher $17 per share IPO price, and suffered losses when they later sold the shares.<ref name="reuters.com">[http://www.reuters.com/article/2009/09/22/finra-vonage-fines-idUSN2233495620090922 Citi, UBS, Deutsche Bank fined over Vonage IPO] Reuters.com</ref>
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The IPO raised $531 million for the company. Vonage's post-IPO handling of individual pre-IPO investors resulted in a class-action lawsuit.<ref>[http://www.investorguide.com/igu-article-821-stock-basics-initial-public-offerings.html Initial Public Offerings.] Investorguide.com</ref>
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As of 2009, Vonage announced that an agreement had been reached to settle with IPO investors.<ref>Reardon, Marguerite (June 4, 2006) [http://news.com.com/2100-1036_3-6079765.html Investors sue Vonage over IPO]. CNET.com.</ref> The settlement included a release and dismissal of all stockholder claims against Vonage and its individual directors and officers who were named as defendants. As a result, the company did not incur additional litigation settlement costs other than nominal administrative fees and expenses.<ref name="pr.vonage.com">Vonage.com (June 17, 2009) [http://pr.vonage.com/releasedetail.cfm?releaseid=390447 Vonage Holdings Corp. Announces Agreement in Principle to Settle IPO]</ref>
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The firms underwriting the IPO, [[Citigroup]], [[UBS]] and [[Deutsche Bank]], were fined and ordered to reimburse customers for "failure to adequately supervise communications" with investors.<ref name="pr.vonage.com"/> [[NYSE]] regulators went so far as to investigate possible short-selling.<ref>Shwiff, Kathy (September 24, 2009). [http://online.wsj.com/article/SB125363508003831103.html Citi, UBS, Deutsche Fined Over Vonage IPO] Wall Street Journal.</ref>
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Citigroup was fined $175,000 and ordered to pay up to $250,000 in restitution to 284 potentially eligible customers. UBS was fined $150,000and ordered to pay up to $118,000 to 126 potential customers. Deutsche Bank was fined $100,000 and ordered to pay up to $52,000 to 59 potential customers.<ref name="reuters.com"/>
   
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In the second quarter of 2010, with a change in management and improved sales, the Company’s stock price increased in the second quarter of 2010.,<ref>[http://pr.vonage.com/releasedetail.cfm?ReleaseID=496279 Vonage Holdings Corp. Reports Second Quarter 2010 Results] Vonage.com</ref> and in June 2010, Vonage made a comeback, topping the [http://online.wsj.com/mdc/public/page/2_3021-gainnyse-gainer.html?mod=mdc_leaderlist Biggest Percentage Price Gainers] list of stocks on the NYSE.<ref>[http://online.wsj.com/article/SB10001424052748704009804575309100852977396.html Vonage Holdings, Energy Recovery: Biggest Price Gainers (VG, ERII)] Wall Street Journal.</ref> In 2011, the Company reported record high net income of $22 million, among other positive financial reports.<ref>[http://ir.vonage.com/releasedetail.cfm?ReleaseID=596334 Vonage Holdings Corp. Reports Second Quarter 2011 Results] Vonage.com</ref>
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The IPO and its aftermath earned Vonage a [[Business 2.0]] Magazine award as 14th of ''101 Dumbest Moments in Business for 2006.''<ref>Horowitz,A.; Jacobson, D.; McNichol, T.;, Thomas, O. (March 7, 2007) [http://money.cnn.com/magazines/business2/business2_archive/2007/02/01/8398990/index.htm 101 Dumbest Moments in Business #14: Lose all your money at the low, low rate of 2 cents per minute]. CNN.com, ''Business 2.0''. Retrieved 2009-04-11.</ref>
  
   
 
===Restructuring efforts===
  
===Restructuring efforts===
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In 2006, in preparation for Vonage's IPO, Michael Snyder, former president of ADT Security Services replaced Vonage co-founder [[Jeffrey A. Citron]] as CEO.<ref>Citron could not preside over the public stock offering, because he was "barred from association with any broker or dealer" of stocks by [http://www.sec.gov/litigation/admin/34-47323.htm ''SEC Administrative Proceeding File No. 3-11031, In the Matter of Jeffrey A. Citron, Respondent.''] in 2003.</ref><ref>{{cite web |url=http://news.cnet.com/Vonage-shuffles-management/2110-7352_3-6090072.html |title=Vonage Shuffles Management |first=Marguerite |last=Reardon |date=June 30, 2006 |publisher=CNET.com}}</ref> In 2007, in a restructuring effort to reduce ongoing net losses in the face of double-digit stock price slips and patent infringement issues, Snyder resigned, and Citron returned as Interim CEO.<ref>Weiss, Todd (April 12, 2007). [http://www.computerworld.com/s/article/9016340/Vonage_CEO_resigns_Company_moves_to_cut_costs_?taxonomyId=16&taxonomyName=networking_and_internet Vonage CEO resigns, Company Moves to Cut Costs]. ComputerWorld.com.</ref> The company announced plans for 10% (180) layoffs, as it secured $215 million in financing.<ref>Gardner, W. David (April 12, 2007). [http://www.informationweek.com/hardware/showArticle.jhtml?articleID=199000539&subSection=Telecom Vonage Prepares To Cut Workforce 10%]. Information Week.</ref>
  
In 2006, in preparation for Vonage's IPO, Michael Snyder, former president of ADT Security Services replaced Vonage co-founder [[Jeffrey A. Citron]] as CEO.<ref>Citron could not preside over the public stock offering, because he was "barred from association with any broker or dealer" of stocks by [http://www.sec.gov/litigation/admin/34-47323.htm ''SEC Administrative Proceeding File No. 3-11031, In the Matter of Jeffrey A. Citron, Respondent.''] in 2003.</ref><ref>{{cite web |url=http://news.cnet.com/Vonage-shuffles-management/2110-7352_3-6090072.html |title=Vonage Shuffles Management |first=Marguerite |last=Reardon |date=June 30, 2006 |publisher=CNET.com}}</ref> In 2007, in a restructuring effort to reduce ongoing net losses in the face of double-digit stock price slips and patent infringement issues, Snyder resigned, and Citron returned as Interim CEO.<ref>Weiss, Todd (April 12, 2007). [http://www.computerworld.com/s/article/9016340/Vonage_CEO_resigns_Company_moves_to_cut_costs_?taxonomyId=16&taxonomyName=networking_and_internet Vonage CEO resigns, Company Moves to Cut Costs]. ComputerWorld.com.</ref> The company announced plans for 10% (180) layoffs, as it secured $215 million in financing.<ref>Gardner, W. David (April 12, 2007). [http://www.informationweek.com/hardware/showArticle.jhtml?articleID=199000539&subSection=Telecom Vonage Prepares To Cut Workforce 10%]. Information Week.</ref>
   
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In 2008, with Vonage stock at $1.42, Citron stepped aside as Marc Lefar, former CMO of Cingular Wireless, became CEO based on his performance in multiplying customer base and reducing [[churn rate]]. Citron continued as board Chairman.<ref>Carew, Sinead; Berlowitz, Phil (July 29, 2008). [http://uk.reuters.com/article/idUKN2937425020080729 Vonage names Marc Lefar as CEO, replacing Citron]. UK Reuters.com. Retrieved 2010-04-09.</ref>
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In 2008, with Vonage stock at $1.42, Citron stepped aside as Marc Lefar, former CMO of Cingular Wireless, became CEO. Lefar was chosen based on his performance in multiplying customer base and reducing [[churn rate]]. Citron continued as board Chairman.<ref>Carew, Sinead; Berlowitz, Phil (July 29, 2008). [http://uk.reuters.com/article/idUKN2937425020080729 Vonage names Marc Lefar as CEO, replacing Citron]. UK Reuters.com. Retrieved 2010-04-09.</ref>
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On July 9, 2009, Vonage stock dipped to $0.31, but an August price surge associated with announcements for a dialing plan and a portable phone [[application software|app]]<ref>Karpinski, Rich (August 27, 2009). [http://blog.connectedplanetonline.com/unfiltered/2009/08/27/why-is-vonage-stock-suddenly-going-bananas/ Why is Vonage stock suddenly going bananas?]. [[Connected Planet Online]], ''Unfiltered.'' Retrieved 2010-04-09.</ref> raised the stock to between $1 and $2 (April 2010.)<ref>[http://www.nyse.com/about/listed/lcddata.html?ticker=vg Vonage Data]. [[New York Stock Exchange]] ''NYSE.com Listings Directory.'' Retrieved 2010-03-11.</ref>
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On July 9, 2009, Vonage stock dipped to $0.31, but an August price surge associated with announcements of the Vonage World plan and a portable phone [[application software|app]]<ref>Karpinski, Rich (August 27, 2009). [http://blog.connectedplanetonline.com/unfiltered/2009/08/27/why-is-vonage-stock-suddenly-going-bananas/ Why is Vonage stock suddenly going bananas?]. [[Connected Planet Online]], ''Unfiltered.'' Retrieved 2010-04-09.</ref> raised the stock to between $1 and $2 (April 2010.)<ref>[http://www.nyse.com/about/listed/lcddata.html?ticker=vg Vonage Data]. [[New York Stock Exchange]] ''NYSE.com Listings Directory.'' Retrieved 2010-03-11.</ref>
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As part of its restructuring effort in 2010, Vonage paid off $41 million of its debt at par, negotiated the release of more than $40 million in cash from vendors and announced a comprehensive refinancing. The refinancing resulted in a $200 million, pre-payable term loan with interest rates at 9.75%. While this was an enormous improvement, Vonage committed to driving further interest rate savings through a two-part strategy of paying down the existing debt ahead of schedule and seeking improved financing terms based on sustained financial performance.
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In March 2011, Vonage began aggressively prepaying the $200 million loan and by June 2011 had prepaid $70 million, reducing its term loan balance to $130 million, the level Vonage had targeted to achieve by year-end 2011.<ref>[http://seekingalpha.com/article/284299-vonage-holdings-ceo-discusses-q2-2011-results-earnings-call-transcript Vonage Holdings CEO Discusses Q2 2011 Results - Earnings Call Transcript]</ref>
   
 
===Patent infringement===
  
===Patent infringement===
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On March 8, 2007 a jury found Vonage guilty of infringing three patents held by Verizon, and not guilty of infringing two other patents. The jury ordered Vonage to pay US$58 million, and a royalty rate of 5.5% of every sale to a Vonage customer, back to Verizon. Subsequent to this jury award, there were a series of appeals and intermediate stays on payment. Vonage was punitively ordered by the court to stop signing up new customers;<ref>Barakat, Matthew (AP) (April 7, 2007). [http://www.post-gazette.com/pg/07097/775909-28.stm#ixzz0oE6sXgAP Ruling bans Vonage from signing up new customers]. [[Pittsburgh Post-Gazette]].com. Retrieved May 17, 2010.</ref> this was reversed on appeal three weeks later.<ref>Kharif, Olga (April 25, 2007). [http://www.businessweek.com/technology/content/apr2007/tc20070425_346272.htm?chan=top+news_top+news+index_technology Vonage: Away from the Edge, for Now]. [[Bloomberg Businessweek]]. Retrieved May 16, 2010.</ref> On November 19, 2007 Vonage agreed to pay ~$120 million in damages<ref>Thomson, Iain (November 19, 2007). [http://www.vnunet.com/vnunet/news/2203710/vonage-owes-120-million-court Vonage owes $120m after court failure]. VNUnet.com.</ref> to Verizon.
  
On March 8, 2007 a jury found Vonage guilty of infringing three patents held by Verizon, and not guilty of infringing two other patents. The jury ordered Vonage to pay US$58 million, and a royalty rate of 5.5% of every sale to a Vonage customer, back to Verizon. Subsequent to this jury award, there were a series of appeals and intermediate stays on payment. Vonage was punitively ordered by the court to stop signing up new customers;<ref>Barakat, Matthew (AP) (April 7, 2007). [http://www.post-gazette.com/pg/07097/775909-28.stm#ixzz0oE6sXgAP Ruling bans Vonage from signing up new customers]. [[Pittsburgh Post-Gazette]].com. Retrieved May 17, 2010.</ref> this was reversed on appeal three weeks later.<ref>Kharif, Olga (April 25, 2007). [http://www.businessweek.com/technology/content/apr2007/tc20070425_346272.htm?chan=top+news_top+news+index_technology Vonage: Away from the Edge, for Now]. [[Bloomberg Businessweek]]. Retrieved May 16, 2010.</ref> On November 19, 2007 Vonage agreed to pay ~$120 million in damages<ref>Thomson, Iain (November 19, 2007). [http://www.vnunet.com/vnunet/news/2203710/vonage-owes-120-million-court Vonage owes $120m after court failure]. VNUnet.com.</ref> to Verizon.
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The Verizon patents brought to trial were the Voit<ref>Eric Voit, Bethesda MD</ref> patents: {{Cite patent|US|6430275}}, {{Cite patent|US|6137869}}, {{Cite patent|US|6104711}}, {{Cite patent|US|6282574}}, the Curry<ref>James Curry, Herndon VA</ref> patent {{Cite patent|US|6359880}}, and the Gardell<ref>Steve Gardell, Andover MA</ref> patents: {{Cite patent|US|6298062}}, {{Cite patent|US|6128304}}. The successful prosecution of Voit patents against Vonage led to their reuse by Verizon in another suit against [[Cox Communications]] initiated in January 2008,<ref>Teal, Kelly M. (January 18, 2008). [http://www.phoneplusmag.com/hotnews/81h18111359.html Verizon Sues Cox for IP Patent Infringement]. Phone+ Magazine.</ref> as well as one against [[Charter Communications]] in February 2008.<ref>Spangler, Todd (February 9, 2008). [http://www.multichannel.com/article/CA6530843.html?desc=topstory Verizon Sues Charter Over Voice Patents]. Multichannel News.com. Retrieved 2010-03-13.</ref>
  
   
 
The Verizon suit was the first but not the only patent lawsuit successfully prosecuted against Vonage. By December 26, 2007, Vonage was ordered to pay $80 million to [[Sprint Nextel]]<ref>Bangeman, Eric (October 8, 2007). [http://arstechnica.com/news.ars/post/20071008-vonage-sprint-settle-patent-dustup-for-80-million.html Vonage, Sprint settle patent dustup for $80 million]. [[Ars Technica]]. Retrieved 2010-03-13.</ref> and $39 million to [[AT&T]].<ref>Eddy, Nathan (December 26, 2007). [http://www.crn.com/networking/205203144 Vonage, AT&T Agree On Patent Lawsuit Settlement]. ChannelWeb.com. Retrieved 2010-03-13.</ref> Another lawsuit with [[Nortel]] resulted in no monetary damages.<ref>Gershberg, M. (NY) & Khandelwal, P. (Bangalore) (December 31, 2007). [http://www.reuters.com/article/idUSWNAS541520080101 Vonage, Nortel settle patent dispute]. [[Reuters]]. Retrieved 2010-05-14.</ref>
  
The Verizon suit was the first but not the only patent lawsuit successfully prosecuted against Vonage. By December 26, 2007, Vonage was ordered to pay $80 million to [[Sprint Nextel]]<ref>Bangeman, Eric (October 8, 2007). [http://arstechnica.com/news.ars/post/20071008-vonage-sprint-settle-patent-dustup-for-80-million.html Vonage, Sprint settle patent dustup for $80 million]. [[Ars Technica]]. Retrieved 2010-03-13.</ref> and $39 million to [[AT&T]].<ref>Eddy, Nathan (December 26, 2007). [http://www.crn.com/networking/205203144 Vonage, AT&T Agree On Patent Lawsuit Settlement]. ChannelWeb.com. Retrieved 2010-03-13.</ref> Another lawsuit with [[Nortel]] resulted in no monetary damages.<ref>Gershberg, M. (NY) & Khandelwal, P. (Bangalore) (December 31, 2007). [http://www.reuters.com/article/idUSWNAS541520080101 Vonage, Nortel settle patent dispute]. [[Reuters]]. Retrieved 2010-05-14.</ref>
   
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==Service==
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===Early: 1999-2000===
  
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===Products===
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<!-- This section is almost entirely responsible for this article's categorization as "promotional". It is also based almost entirely on this one article: http://telephonyonline.com/switching/print/telecom_fantastic_vonage/ . Single sourcing is a BAD IDEA. -->
  
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<!--this Min-X section was reluctantly moved here to fit in the structure. It's written like a diary, and has very few verifiable sources. HELP. -- Lexein -->{{Multiple issues|section=y
  
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| original research = March 2010
  
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Vonage had its genesis in a company called Min-X.com ("The Minute Exchange"). [[Jeff Pulver]], noted VoIP proponent and owner of the successful VON conferences, incubated Min-X.com at his offices in [[Melville, New York|Melville, NY]] on Long Island between December 1999 and December 2000. Based on his experience at the bond trading giant, [[Cantor Fitzgerald]], Pulver knew that any commoditized product is easily traded in a market. The year was 1999 and [[Enron]] was at the zenith of its global trading business (Enron at this point even had a bandwidth trading exchange). There were a significant number of regional IP telephony companies spread across the globe with large amounts of gateway capacity that could be efficiently brokered for profit. Unlike Enron's bandwidth trading market, Pulver's market would be a market where IP Telephony minutes and capacity could be traded in both a spot and futures contracts. By summer of 2000, Min-X.com had about six employees who were either technologists or former bond or stock traders. There was a business plan and initial "trading platform" prototypes built on [[Cisco Systems|Cisco]], Clarent and [[VocalTec]] IP Telephony equipment.
  
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Jeffrey Citron, former CEO and majority shareholder at Datek Online and also with net worth of $750 million, was the first major investor in Min-X/Vonage. He had been barred from stock trading by the SEC for life, but was still seeking angel investor opportunities.<ref>{{cite news |last=Lewis |first=Mark |url=http://www.forbes.com/2001/06/04/0604citron.html |title=Citron Aims at New Target |publisher=Forbes |date=June 4, 2001 |accessdate=2010-03-30}}</ref>
  
   
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Vonage offers a variety of calling plans - domestic, international and small business plans - with more than 25 features, including visual voicemail, 411 calling, caller ID, call waiting, call forwarding, do not disturb, and many others.<ref>[http://www.vonage.com/features.php?refer_id=WEBHO0706010001W1&lid=main_nav_included_features Vonage Standard Calling Features for VoIP Phone Service Plans] vonage.com</ref>
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Daniel Berninger, noted VoIP pundit and analyst with Tier 1 Research, was working for Pulver in 2000, and was helping Pulver bootstrap various new businesses including Min-X, Arieta and Free World Dialup. Dan's wife, an executive recruiter with a deep book, knew of Citron's availability and placed the call to him. Citron's first meeting with Pulver on the topic of Min-X happened in August 2000. Citron was chauffeured to the meeting in Melville in his own helicopter. Pulver gave the pitch, while Citron, seeking new investment wins, was intrigued by the idea of starting a new and (more importantly) unregulated marketplace. Citron immediately brought in his trusted banker, [[Carlos Bhola]]. Bhola was one of Frank Quattrone's disciples from the Internet banking group at [[Credit Suisse First Boston|CSFB]] and by 2000, Bhola had formed his own boutique investment and advisory group. By October 2000, a deal was struck and Citron and Bhola made an initial investment of $1 million, in addition to 9 other $1 million dollar investments in several other early stage firms.<ref>{{cite news |last=Richtel |first=Matt |url=http://query.nytimes.com/gst/fullpage.html?res=990CE1DB1731F930A35755C0A9609C8B63&sec=technology&spon=&pagewanted=all |title=Is Vonage Sinking Or Coming Up for Air?; Stock's Dive at Debut Is Among the Deepest Seen in Recent Years
  
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|publisher=New York Times |date=June 3, 2006 |accessdate=2010-03-30}}</ref>
  
−
 
−
Bhola and his team quickly got to work building a better business plan and revenue model for Min-X to raise more money. Bhola's first conclusion was that an independent IP telephony minute trading marketplace was not going to stand on its own. Wholesale minute prices are priced in pennies. Brokerage commissions, as a percentage of the minute price would generate commissions in the fraction of a cent. Assuming that every regional IP telephony company joined the Min-X trading marketplace, the combined total of all the commissions generated on all the traded minutes from all the companies would not generate an attractive investment return. This calculation was true, even as growth in IP telephony was factored in. What was needed in this minute marketplace to spark exponential growth was a massive consumer of capacity who would perpetually buy minutes. "Min-X Enterprise Services," a company focused on selling IP voice services was born. Bhola and team, reran the numbers on the two new businesses. By November 2000, it became obvious that the really profitable business was "Min-X Enterprise Services" and not the Min-X marketplace. Citron and Bhola then invested an additional $10 million, Citron took the title of CEO, Bhola took the title of President, and the efforts of all employees were refocused on building "Min-X Enterprise Services."
  
   
  ⚫
In 2009, Vonage introduced its most popular plan, ''Vonage World'' calling plan, with "unlimited international calling to more than 60 countries" for a flat monthly rate.<ref name="Woyke">Woyke, Elizabeth (December 31, 2009). [http://www.forbes.com/forbes/2010/0118/technology-internet-phone-cellular-vonage-second-calling.html Vonage's Second Calling]. Forbes.com</ref><ref>[http://pr.vonage.com/releasedetail.cfm?ReleaseID=404173 Vonage Announces Unlimited Flat Rate Calling Around the World]. Press release. Vonage.com, August 20, 2009.</ref>
⚫
In a December 2000 meeting, Citron and Bhola unveiled a new name for the new entity; "Vonage". The name borrows Pulver's "VON" acronym for "Voice on the Net" and the temporal meaning of the word "age", combining to form "Vonage", which would herald the start of a new era for consumer communications services (the age of VON). In January 2001, after moving to {{convert|10000|sqft|m2}} of refurbished office space in the former Revlon building in Edison, NJ, Vonage was incorporated and commenced its ambitious plan.<ref>{{cite news |last=Vittore |first=Vince |url=http://telephonyonline.com/switching/print/telecom_fantastic_vonage/ |title=FANTASTIC VONAGE |publisher=Telephony Online |date=November 17, 2003 |accessdate=2010-03-30}}</ref>
  
  ⚫
Vonage began offering smartphone applications in October 2009. The ''Vonage Mobile'' app provided international calling via [[Wi-Fi]] and [[cellular networks]], and Vonage promoted theapp as offering "50% savings" over competitive rates. The free app works on devices running [[Android (operating system)|Android]], [[BlackBerry]], and [[iOS (Apple)|iOS]] ([[iPad]], [[iPhone]], [[iPod Touch]]).<ref>Wortham, Jenna (October 5, 2009). [http://bits.blogs.nytimes.com/2009/10/05/vonage-releases-calling-apps-for-iphone-and-blackberry/ Vonage releases calling apps for iPhone and Blackberry]. ''Bits'', NYTimes.com.</ref><ref>[http://pr.vonage.com/releasedetail.cfm?ReleaseID=413492 Vonage Goes Mobile: First of New Calling Applications Now Available]. Press release. Vonage.com</ref> A month later, the ''Vonage World Mobile'' plan was introduced, with ''Vonage World'' unlimited calling features for a fixed monthly charge, and included a discount to home service users.<ref name="Woyke"/><ref>[http://pr.vonage.com/releasedetail.cfm?ReleaseID=432055 Vonage World Mobile Brings Holiday Cheer]. Press release. Vonage.com, December 22, 2009.</ref>
   
  ⚫
Introduced in August 2010, the free ''Vonage Mobile application for Facebook'' provides "free one-touch mobile-to-mobile calls to Facebook friends who also have the application" for iPhone/iPad, iPod touch and Android devices, operating over Wi-Fi (free) and 3G/4G networks (uses data minutes).<ref>Furchgott, Roy (August 5, 2010). [http://gadgetwise.blogs.nytimes.com/2010/08/05/vonage-app-calls-facebook-friends-free/ Vonage App calls Facebook Friends Free]. ''Gadgetwise'', NYTimes.com.</ref><ref>[http://pr.vonage.com/releasedetail.cfm?ReleaseID=496277 Vonage Gives Facebook Users a Voice]. Press release. Vonage.com, August 4, 2010.</ref>
−
Several important technical strides had been achieved by this time, notably the avoidance of intra-[[Local access and transport area|LATA]] fees. LATAs are telecom regions that were created by the FCC upon the 1984 breakup of AT&T, and are subdivisions of states (or in some cases entire states) that carriers use to route calls. While long distance fees were rapidly falling across the continental US at the time, fees within states were still artificially high. Citron himself found it frustrating that the high fees for a call to his own sister in in another part of New Jersey were unavoidable. With VOIP, Vonage was able to sidestep those fees. For the New Jersey to New Jersey example above, Vonage would actually route the call to servers located in California, essentially bouncing the call across the country and back to create call nexus in another state, thereby avoiding the intra-LATA fees. Because each call traveled for most of its journey over the public internet, Vonage accrued no extra costs for the extra miles traveled. Additionally, Vonage's infrastructure improved with the acquisition of key employees Yuk Ming Lam (of Lucent) and Louis Holder (of Cantor Fitzgerald) in their technical engineering group, with call quality evolving to more resemble landline POTS calls.
  
   
  +
In April 2011, Vonage introduced ''World Premium Unlimited'' plan, expanding on its popular World calling plan from 60 to 80 countries, including unlimited calling to mobiles in 42 countries.<ref>[http://pr.vonage.com/releasedetail.cfm?ReleaseID=569749 Vonage Launches New Plan With Unlimited Calling to Mobile Phones in More Than 40 Countries] Press release. Vonage.com</ref>
−
The initial results from minute arbitrage were not sufficient to grow the company to the next level, and a private label strategy was conceived by the management team. They elected to offer their network to cable companies and [[Multiple system operator|MSOs]], and provide VOIP infrastratucture and transmission for a portion of cable revenues. Michael Porta was brought in from New York University Medical Center to run Human Resources. Philip Giordano, a long time cable industry insider, was hired from Newhouse Media, a cable television and media company. Liberato DiCicco was hired from Ameritrade (formerly Datek) to run security and local operations. Michael Centrella (former CEO of Merlot Networks) was hired to run Sales. Mona Shah (Datek) ran company operations, including the network and NOC. Kenneth Laputka was hired to run Marketing.
  
   
  +
Vonage announced a new service offering in July 2011, ''Vonage Extensions™'', allowing customers to extend their Vonage service to an additional phone line, mobile or landline, for no additional cost. In addition to the first free extensions, customers may add a second extension for $4.99 per month.<ref>[http://www.vonage.com/features.php?feature=vonage_extensions Vonage Extensions] Vonage.com</ref> As of October 2011, Vonage customers may download the free ''Vonage Extensions™'' mobile app available on iPhone® and Android™ devices. This move was one of several announcements in 2011 launching Vonage in the mobile VoIP space.<ref>[http://pr.vonage.com/releasedetail.cfm?ReleaseID=594274 Vonage Adds Free Mobile Extensions] Press release. Vonage.com</ref>
−
Private label results were low based on sales, but influential in accelerating MSOs entry into VOIP and "triple play" offers, where the local utility offers cable TV, internet access, and phone service. It was alleged that Jeff Citron himself hand-delivered a proposal for private label VOIP services for Cablevision Systems to the Dolan family, owners of Cablevision, on the runway for their private jet in 2002. (Cablevision launched Optimum Voice one year later.)
  
   
  +
Less than a week after the announcement of ''Vonage Extensions™'', Vonage released a free downloadable mobile application, ''Time to Call™'', offering 15-minute calls to more than 190 countries starting at $0.99 per call. ''Time to Call™'' is available for iPhone®, iPod touch® and iPad®.<ref>[http://pr.vonage.com/releasedetail.cfm?ReleaseID=596314 Vonage Announces Global Launch of Pay-Per-Call International App for iPhone with Direct Payment Through iTunes] Press release. Vonage.com</ref>
−
In 2002 the management team elected to enter the direct to residential and business phone service markets under Vonage Direct. Carlos Bhola went on record saying that he would "wear a dress if 10,000 customers ever bought Vonage Direct." Brooke Schulz joined the firm to run Public Relations. John Rego joined the firm as CFO (from Windstar).
  
−  
⚫
==Service==
  
⚫
===Products===
  
⚫
In 2009, Vonage introduced the ''Vonage World'' calling plan, with "unlimited international calling to more than 60 countries" for a flat monthly rate.<ref name="Woyke">Woyke, Elizabeth (December 31, 2009). [http://www.forbes.com/forbes/2010/0118/technology-internet-phone-cellular-vonage-second-calling.html Vonage's Second Calling]. Forbes.com</ref><ref>[http://pr.vonage.com/releasedetail.cfm?ReleaseID=404173 Vonage Announces Unlimited Flat Rate Calling Around the World]. Press release. Vonage.com, August 20, 2009.</ref>
 
⚫
Vonage began offering smartphone applications in October 2009. The ''Vonage Mobile'' app provided international calling via [[Wi-Fi]] and [[cellular networks]], promoted as offering "50% savings" over competitive rates. The free app works on devices running [[Android (operating system)|Android]], [[BlackBerry]], and [[iOS (Apple)|iOS]] ([[iPad]], [[iPhone]], [[iPod Touch]]).<ref>Wortham, Jenna (October 5, 2009). [http://bits.blogs.nytimes.com/2009/10/05/vonage-releases-calling-apps-for-iphone-and-blackberry/ Vonage releases calling apps for iPhone and Blackberry]. ''Bits'', NYTimes.com.</ref><ref>[http://pr.vonage.com/releasedetail.cfm?ReleaseID=413492 Vonage Goes Mobile: First of New Calling Applications Now Available]. Press release. Vonage.com</ref>
 
−
A month later, the ''Vonage World Mobile'' plan was introduced, with ''Vonage World'' unlimited calling features for a fixed monthly charge, and included a discount to home service users.<ref name="Woyke"/><ref>[http://pr.vonage.com/releasedetail.cfm?ReleaseID=432055 Vonage World Mobile Brings Holiday Cheer]. Press release. Vonage.com, December 22, 2009.</ref>
 
⚫
Introduced in August 2010, the free ''Vonage Mobile application for Facebook'' provides "free one-touch mobile-to-mobile calls to Facebook friends who also have the application" for iPhone/iPad, iPod touch and Android devices, operating over Wi-Fi (free) and 3G/4G networks (uses data minutes).<ref>Furchgott, Roy (August 5, 2010). [http://gadgetwise.blogs.nytimes.com/2010/08/05/vonage-app-calls-facebook-friends-free/ Vonage App calls Facebook Friends Free]. ''Gadgetwise'', NYTimes.com.</ref><ref>[http://pr.vonage.com/releasedetail.cfm?ReleaseID=496277 Vonage Gives Facebook Users a Voice]. Press release. Vonage.com, August 4, 2010.</ref>
  
   
 
===Requirements===
  
===Requirements===
  +
−
In order to use the home service, customers employ a "Vonage" branded "VoIP [[router (computing)|router]]" or a phone adapter that connects to their main router or broadband [[modem]]. In addition, an [[upload]] speed of 90–240 [[bit rate|kbit/s]] as well as a reliable [[quality of service]] (QoS) optimized connection is needed to make calls without substantial [[lag]] or jitter.<ref>{{cite web |url=http://articles.techrepublic.com.com/5100-10878_11-6159446.html |title=Meet VoIP bandwidth requirements without crippling your network performance |last=Ou |first=George |date=February 14, 2007 |publisher=TechRepublic |accessdate=2010-03-13}}</ref>
  
  +
In order to use Vonage service, customers need a Broadband Ethernet connection such as Cable or DSL through an Internet Service Provider (ISP), a billing and shipping address in the U.S. or Puerto Rico, a Vonage phone adapter (called a Vonage Box ™), and any touchtone phone (either corded or cordless).<ref>[https://support.vonage.com/app/answers/detail/a_id/714/related/1 What do I need to get service with Vonage?] Vonage.com</ref>
   
 
===Telephone number availability===
  
===Telephone number availability===
⚫
Subscribers are able to choose a number in the country of the service they subscribe to for their primary line, in an [[area code]] unrelated to their actual residence. Subscribers can obtain additional "virtual numbers" for a monthly fee. Vonage also offers virtual numbers in [[Mexico]], [[Canada]] and [[Europe]]. While the company supports porting a U.S. telephone number via the FCC's [[local number portability]] (LNP), not every phone number is available in every area code.
  
   
  ⚫
Subscribers are able to choose a number in the country of the service they subscribe to for their primary line, in an [[area code]] of their choice. Subscribers can obtain additional "virtual numbers" for a monthly fee. Vonage also offers virtual numbers in [[Mexico]], [[Canada]] and [[Europe]]. While the company supports porting a U.S. telephone number via the FCC's [[local number portability]] (LNP), not every phone number is available in every area code. Additionally, customers can transfer an existing number to Vonage, which can take up to 7 to 10 business days from the time the customer completes the Number Transfer Authorization (NTA).<ref>[https://support.vonage.com/app/answers/detail/a_id/881/kw/transferring%20number Number Transfer – FAQs] Vonage.com</ref>
⚫
Residents of the U.S., Canada, and the UK may subscribe to Vonage by credit card from their respective country, but "phone routers" can be connected to the Internet anywhere. The company also offers a "V-Phone" USB phone adapter which, using a softphone application on an internet-connected computer, forms a portable telephone with access to the worldwide telephone network.
  
  +
  ⚫
Residents of the U.S., Canada, and the UK may subscribe to Vonage by credit card from their respective country, but the Vonage Box™ can be connected to the Internet anywhere.
   
 
===Emergency calls===
  
===Emergency calls===
  +
Vonage was the first company to offer 911 calling from a VoIP platform in 2003.<ref>[http://www.vonage.com/corporate/about_timeline.php Vonage Timeline] Vonage.com</ref> subscribers must activate their 911 calling feature by registering their address with the company. Customers are responsible for maintaining their 911 location information at all times.<ref>[http://www.fcc.gov/guides/voip-and-911-service FCC Consumer Advisory: VoIP and 911] [[Federal Communications Commission]]</ref>
−
A problem with any VoIP provider is that, since the physical location of a caller may not correspond to his or her listed phone number, traditional [[emergency telephone number]] service ([[9-1-1]] in North America) is not available. Many VoIP providers use [[enhanced 9-1-1|e911]] instead, and are required by the FCC to provide some form of emergency service.<ref>[http://www.fcc.gov/cgb/consumerfacts/voip911.html FCC Consumer Advisory: VoIP and 911]. [[Federal Communications Commission]] ''Consumer Publications''. August 17, 2008. Retrieved 2010-03-30.</ref> Vonage emergency phone service requires subscribers to register their address with the company and does not operate in case of an Internet connection disruption or power failure, unless an [[uninterruptible power supply]] (UPS) is used to power the Vonage telephone adapter, telephone base unit, and modem. Customers are responsible to maintain their 911 location information at all times.
  
   
−
If a customer dials 911 before the 911 verification is completed, the call will usually be routed to a national 911 call center where basic information must be given (name, location, nature of emergency, etc.), after which the call is transferred to a local public service answering point, like a local Police Department.<ref>[http://www.vonage.com/features.php?feature=911 Vonage 9-1-1 dialing]. Vonage.com, ''Features''. Retrieved 2010-03-30.</ref><ref>[http://www.vonage.com/help.php?article=966&category=29&nav= Vonage e911 - differences from traditional e911]. Vonage.com, ''Help Files''. Retrieved 2010-03-30.</ref>
 +
If a customer dials 911 before the 911 verification is completed, the call will usually be routed to a national 911 call center where basic information must be given (name, location, nature of emergency, etc.), after which the call is transferred to a local public service answering point, like a local Police Department.<ref>[http://www.vonage.com/features.php?feature=911 Vonage 9-1-1 dialing]. Vonage.com, ''Features''. Retrieved 2010-03-30.</ref><ref>[https://support.vonage.com/app/answers/detail/a_id/1110 Traditional 911 and Vonage 911 Dialing] Vonage.com</ref>
   
 
===Service cancellation===
  
===Service cancellation===
−
To cancel service, Vonage requires customers to call a toll-free number, as service cancellation is not available on-line. Customer complaints about difficulties with the cancellation process and long hold times were detailed in a May 2006 Wall Street Journal article.<ref>Young, Shawn and Yuan, Li (May 18, 2006) [http://online.wsj.com/public/article/SB114790969362856031-xJnq_WIvkNU2Bcz8Rk96q8aJJyk_20070517.html Vonage Faces User Complaints As IPO Looms] [[Wall Street Journal]].</ref>
 +
To cancel service, Vonage requires customers to call a toll-free number.<ref>[https://support.vonage.com/app/answers/detail/a_id/1073 Cancel Your Vonage Service] Vonage.com</ref>
−  
−
Upon cancellation, customers frequently wish to transfer their phone number to another phone or VoIP service. Vonage offered local number portability (LNP)<ref>[http://www.vonage.com/features_terms_service.php?lid=footer_terms&refer_id=WEBTS0706010001W1 Vonage Terms of Service(section 6.6) - Local Number Portability]. Vonage.com. Retrieved 2008-03-14.</ref> for exiting customers, but not without some difficulties, since early FCC LNP rules did not apply to VoIP services such as Vonage.<ref>{{cite web |author=Keating, Tom |date=September 5, 2006 |url=http://blog.tmcnet.com/blog/tom-keating/voip/number-portability-problems.asp |title=Number Portability Problems |publisher= TMCNet |work=Tom Keating blog}}</ref><!-- yes, it's a blog, but it cites sources! --Lexein --> In late 2007, the FCC tightened up those rules.<ref>{{cite web |author=Martin et. al. |date=2007-10-31 |url=http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-277752A1.pdf |format=PDF |title=FCC Expands Local Number Portability to VoIP |publisher=[[Federal Communications Commission]] |author=FCC |work=Notice of Proposed Rulemaking |accessdate=2010-03-26}}</ref> Vonage LNP transfers are handled by an outside party (Focal Communications, acquired by [[Broadwing Corporation|Broadwing]],<ref>{{cite web |url=http://www.nytimes.com/2004/03/09/business/technology-briefing-deals-corvis-to-buy-focal-for-101-million.html?pagewanted=1 |title=Corvis to buy Focal for $101 Million |publisher=[[New York Times]]|work=Tech Briefing |date=March 9, 2004 |accessdate=2010-03-30}}</ref> acquired by [[Level 3 Communications|Level 3]]).<ref>{{cite press release |date=January 3, 2007 |url=http://www.level3.com/newsroom/pressreleases/2007/20070103.html |title=Level3 Completes Acquisition of Broadwing| publisher=[[Level3 Communications|Level3]]}}</ref>
  
   
 
===Quality of service and equipment compatibility===
  
===Quality of service and equipment compatibility===
−
VoIP service relies upon consistent broadband-ISP uptime and VoIP-equipment compatibility with the ISP's modem. Though VoIP is optimized for voice, some [[fax]] equipment can be operated over VoIP,<ref>[http://www.voipmechanic.com/faxingissuesandotherdevices.htm Faxing Issues and Other Devices]. VoIPMechanic.com. Retrieved 2010-03-30.</ref><ref>{{cite book |title=Fax, Modem, and Text for IP Telephony |author=Hanes, David; Salgueiro, Gonzalo |page=130 |publisher=Cisco Press |year=2008 |isbn=978-1587052699 |url=http://books.google.com/books?id=mmocBBbJaa0C&lpg=PA386&dq=fax%20problems%20voip&pg=PA130#v=onepage&q=fax%20problems%20voip&f=false }}</ref><ref>{{cite book |title=VoIP Deployment For Dummies |author=Olejniczak, Stephen P |page=170| url = http://books.google.com/books?id=Og574PMpk8EC&lpg=PA170&dq=fax%20problems%20voip&pg=PA170#v=onepage&q=fax%20problems%20voip&f=false}}</ref> but compatibility of monitored [[alarm system]]s and other devices is less certain.<ref>Jones, Paul E.(Ed.); Salgueiro, Gonzalo(Ed.) et. al. (November 17, 2009) [http://tools.ietf.org/html/draft-jones-sip-forum-fax-problem-statement-00 SIP Forum - Fax Over IP Task Group Problem Statement]. [[Internet Engineering Task Force]] ''IETF.org SIP Forum''. Retrieved 2010-03-30.</ref> Vonage offers "specially commissioned" ''Fax Line'' service<ref>[http://www.vonage.com/support.php?sc=support0409&article=1348 Fax Line] Vonage.com ''Support''. Retrieved 2010-03-30.</ref> which initially was alleged to have VoIP-type problems (prompting a 2006 lawsuit, settled 2008).<ref name=faxclass>{{cite web |url=http://www.bustosfaxsettlement.com/index.htm |title=Bustos, et al. v. Vonage America Inc. and Vonage Holdings Corp., Case No. 06-CV-2308 (HAA), D.N.J. |year=2009 |publisher= Zimmerman Levi & Korsinsky LLP |work=Information Website for the Class Action Settlement |accessdate= 2010-03-30}}</ref> The company has officially advised users of monitored alarm systems to contact their provider to determine VoIP compatibility, and has suggested using a wirelessly monitored system as an alternative.<ref>{{cite web |url=http://www.vonage.com/help.php?article=864&category=45&nav=3 |title=Using an alarm system and Vonage |publisher=Vonage.com |work=Support |accessdate= 2008-03-14}}</ref>
 +
VoIP service relies upon consistent broadband-ISP uptime and VoIP-equipment compatibility with the ISP's modem. Though VoIP is optimized for voice, some [[fax]] equipment can be operated over VoIP,<ref>[http://www.voipmechanic.com/faxingissuesandotherdevices.htm Faxing Issues and Other Devices]. VoIPMechanic.com. Retrieved 2010-03-30.</ref><ref>{{cite book |title=Fax, Modem, and Text for IP Telephony |author=Hanes, David; Salgueiro, Gonzalo |page=130 |publisher=Cisco Press |year=2008 |isbn=978-1587052699 |url=http://books.google.com/books?id=mmocBBbJaa0C&lpg=PA386&dq=fax%20problems%20voip&pg=PA130#v=onepage&q=fax%20problems%20voip&f=false }}</ref><ref>{{cite book |title=VoIP Deployment For Dummies |author=Olejniczak, Stephen P |page=170| url = http://books.google.com/books?id=Og574PMpk8EC&lpg=PA170&dq=fax%20problems%20voip&pg=PA170#v=onepage&q=fax%20problems%20voip&f=false}}</ref> but compatibility of monitored [[alarm system]]s and other devices is less certain.<ref>Jones, Paul E.(Ed.); Salgueiro, Gonzalo(Ed.) et. al. (November 17, 2009) [http://tools.ietf.org/html/draft-jones-sip-forum-fax-problem-statement-00 SIP Forum - Fax Over IP Task Group Problem Statement]. [[Internet Engineering Task Force]] ''IETF.org SIP Forum''. Retrieved 2010-03-30.</ref> Vonage offers "specially commissioned" ''Fax Line'' service.<ref>[http://www.vonage.com/features_available_options.php?feature=fax Vonage Fax Line provides the convenience of a dedicated fax number.] Vonage.com</ref> Vonage recommends customers keep a basic traditional landline dedicated to their home alarm system and use Vonage for the rest of their calling needs.<ref>[https://support.vonage.com/app/answers/detail/a_id/1075/kw/alarm%20systems Using an alarm system and Vonage.] Vonage.com</ref>
   
 
==References==
  
==References==
Line 100: Line 109:
   
 
==External links==
  
==External links==
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* {{Official website|www.vonage.com|mobile=www.vonagemobile.com}}
 +
* [http://www.vonage.com/ Official website]
−
* [http://www.vonageworld.com/ Official website World Calling Plan]
 +
* [http://www.vonagemobile.com/ Vonage Mobile]
  +
* [http://www.vonage.ca/ Vonage Canada]
  +
* [http://www.vonage.co.uk/ Vonage UK]
 
* [http://support.vonage.com/ Vonage Customer Service]
  
* [http://support.vonage.com/ Vonage Customer Service]
 
* [http://speedtest.vonage.com/ Vonage Speedtest]
  
* [http://speedtest.vonage.com/ Vonage Speedtest]
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[[Category:Holmdel Township, New Jersey]]
  
[[Category:Holmdel Township, New Jersey]]
 
[[Category:VoIP companies]]
  
[[Category:VoIP companies]]
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[[Category:Companies listed on NASDAQ]]
   
 
[[it:Vonage]]
  
[[it:Vonage]]

Revision as of 18:58, 8 February 2012

Vonage Holdings Corp.
TypePublic (NYSE: VG)
Nasdaq: VG
IndustryCommunications services
FoundedEdison, New Jersey, U.S.
(January 2001)
HeadquartersHolmdel Township, New Jersey, U.S.
Key people
Marc P. Lefar; CEO
Barry Rowan; CFO
Louis Mamakos; CTO
ProductsPhone over Internet (VOIP) adapter and service subscription
RevenueIncrease US$885 million (2010)[1]
Increase US$47 million (2010)[1]
Number of employees
1600+ worldwide (06/2008)
Websitewww.vonage.com
Vonage -The Broadband Phone Company logo until 2006, orange block font over white
Vonage logo until 2006

Vonage NYSE: VG (/[invalid input: 'icon']ˈvɑːnɪdʒ/) is one of the largest VoIP providers and an industry pioneer. The publicly held company is a provider of low-cost communications services connecting individuals through broadband devices worldwide. Its name is a play on their motto "Voice-Over-Net-AGE."[2]

Founded in Edison, New Jersey, Vonage is now located in Holmdel Township, New Jersey.[3] The company first offered subscription service throughout the United States, then expanded into Canada in 2004 and the United Kingdom in 2005. As of July 2011, Vonage held nearly 2.4 million subscriber lines [4] and now offers mobile applications globally.

History

Early: 1999-2000

Jeff Pulver, noted VoIP proponent and owner of the successful VON conferences, incubated Vonage, then called Min-X.com, at his offices in Melville, New York between December 1999 and December 2000. Based on his experience at Cantor Fitzgerald, Pulver developed a market where IP Telephony minutes and capacity could be traded in both spot and futures contracts. By the summer of 2000, Min-X.com had about six employees who were either technologists or former bond or stock traders.

Jeffrey Citron, former CEO and majority shareholder at Datek Online, was the first major investor in Min-X/Vonage. In October 2000, Citron made an initial investment of $1 million.[5]

In December 2000, Citron and Carlos Bhola, an investment banker, unveiled a new name for entity; "Vonage.” The name borrows Pulver's "VON" acronym for "Voice on the Net" and the temporal meaning of the word "age," combining to form "Vonage,” heralding the start of a new era for consumer communications services (the age of VON). In January 2001, the newly incorporated Vonage moved to Edison, NJ.[6]

The 30 person start-up team worked out of an old testing facility building located in an industrial part of Edison developing ways to shake up the calling industry. With card tables and folding chairs as office furniture, Vonage became one of the first companies to bring VoIP to consumers. In 2002, the management team elected to enter the direct to residential and business phone service markets under Vonage Direct. Growing at an exponential rate in late 2002 and into 2003, Vonage literally knocked down wall after wall of its office space to expand. Throughout its expansion, the team celebrated each sale by ringing a bell, something the Company still does today.

Initial public offering

In operation since 2001, Vonage went public on May 24, 2006 at a price of $17.00 per share, and dropped 23.5% to close at $13.00 the next day.[7]

In the period before the initial public offering (IPO), Vonage solicited its existing customer base with an offer to buy shares of the IPO.[8] The price fell 12.7% in one day to close at $14.85 on the New York Stock Exchange, the worst trading day for any IPO in 2006 up to that point.

As a result, by the time customers learned that they had gotten shares, Vonage's share price had fallen. FINRA said the customers were required to pay the higher $17 per share IPO price, and suffered losses when they later sold the shares.[9]

The IPO raised $531 million for the company. Vonage's post-IPO handling of individual pre-IPO investors resulted in a class-action lawsuit.[10]

As of 2009, Vonage announced that an agreement had been reached to settle with IPO investors.[11] The settlement included a release and dismissal of all stockholder claims against Vonage and its individual directors and officers who were named as defendants. As a result, the company did not incur additional litigation settlement costs other than nominal administrative fees and expenses.[12]

The firms underwriting the IPO, Citigroup, UBS and Deutsche Bank, were fined and ordered to reimburse customers for "failure to adequately supervise communications" with investors.[12] NYSE regulators went so far as to investigate possible short-selling.[13]

Citigroup was fined $175,000 and ordered to pay up to $250,000 in restitution to 284 potentially eligible customers. UBS was fined $150,000and ordered to pay up to $118,000 to 126 potential customers. Deutsche Bank was fined $100,000 and ordered to pay up to $52,000 to 59 potential customers.[9]

In the second quarter of 2010, with a change in management and improved sales, the Company’s stock price increased in the second quarter of 2010.,[14] and in June 2010, Vonage made a comeback, topping the Biggest Percentage Price Gainers list of stocks on the NYSE.[15] In 2011, the Company reported record high net income of $22 million, among other positive financial reports.[16]

Restructuring efforts

In 2006, in preparation for Vonage's IPO, Michael Snyder, former president of ADT Security Services replaced Vonage co-founder Jeffrey A. Citron as CEO.[17][18] In 2007, in a restructuring effort to reduce ongoing net losses in the face of double-digit stock price slips and patent infringement issues, Snyder resigned, and Citron returned as Interim CEO.[19] The company announced plans for 10% (180) layoffs, as it secured $215 million in financing.[20]

In 2008, with Vonage stock at $1.42, Citron stepped aside as Marc Lefar, former CMO of Cingular Wireless, became CEO. Lefar was chosen based on his performance in multiplying customer base and reducing churn rate. Citron continued as board Chairman.[21] On July 9, 2009, Vonage stock dipped to $0.31, but an August price surge associated with announcements of the Vonage World plan and a portable phone app[22] raised the stock to between $1 and $2 (April 2010.)[23]

As part of its restructuring effort in 2010, Vonage paid off $41 million of its debt at par, negotiated the release of more than $40 million in cash from vendors and announced a comprehensive refinancing. The refinancing resulted in a $200 million, pre-payable term loan with interest rates at 9.75%. While this was an enormous improvement, Vonage committed to driving further interest rate savings through a two-part strategy of paying down the existing debt ahead of schedule and seeking improved financing terms based on sustained financial performance.

In March 2011, Vonage began aggressively prepaying the $200 million loan and by June 2011 had prepaid $70 million, reducing its term loan balance to $130 million, the level Vonage had targeted to achieve by year-end 2011.[24]

Patent infringement

On June 19, 2006, Verizon filed a lawsuit charging that Vonage infringed on five of Verizon's patents related to its VoIP service.[25] The patents describe technology for completing phone calls between VoIP users and people using phones on the traditional public switched network, authenticating VoIP callers, validating VoIP callers' accounts, fraud protection, providing enhanced features, using Wi-Fi handsets with VoIP services, and monitoring VoIP caller usage.

On March 8, 2007 a jury found Vonage guilty of infringing three patents held by Verizon, and not guilty of infringing two other patents. The jury ordered Vonage to pay US$58 million, and a royalty rate of 5.5% of every sale to a Vonage customer, back to Verizon. Subsequent to this jury award, there were a series of appeals and intermediate stays on payment. Vonage was punitively ordered by the court to stop signing up new customers;[26] this was reversed on appeal three weeks later.[27] On November 19, 2007 Vonage agreed to pay ~$120 million in damages[28] to Verizon.

The Verizon suit was the first but not the only patent lawsuit successfully prosecuted against Vonage. By December 26, 2007, Vonage was ordered to pay $80 million to Sprint Nextel[29] and $39 million to AT&T.[30] Another lawsuit with Nortel resulted in no monetary damages.[31]

Service

Products

Vonage offers a variety of calling plans - domestic, international and small business plans - with more than 25 features, including visual voicemail, 411 calling, caller ID, call waiting, call forwarding, do not disturb, and many others.[32]

In 2009, Vonage introduced its most popular plan, Vonage World calling plan, with "unlimited international calling to more than 60 countries" for a flat monthly rate.[33][34] Vonage began offering smartphone applications in October 2009. The Vonage Mobile app provided international calling via Wi-Fi and cellular networks, and Vonage promoted theapp as offering "50% savings" over competitive rates. The free app works on devices running Android, BlackBerry, and iOS (iPad, iPhone, iPod Touch).[35][36] A month later, the Vonage World Mobile plan was introduced, with Vonage World unlimited calling features for a fixed monthly charge, and included a discount to home service users.[33][37]

Introduced in August 2010, the free Vonage Mobile application for Facebook provides "free one-touch mobile-to-mobile calls to Facebook friends who also have the application" for iPhone/iPad, iPod touch and Android devices, operating over Wi-Fi (free) and 3G/4G networks (uses data minutes).[38][39]

In April 2011, Vonage introduced World Premium Unlimited plan, expanding on its popular World calling plan from 60 to 80 countries, including unlimited calling to mobiles in 42 countries.[40]

Vonage announced a new service offering in July 2011, Vonage Extensions™, allowing customers to extend their Vonage service to an additional phone line, mobile or landline, for no additional cost. In addition to the first free extensions, customers may add a second extension for $4.99 per month.[41] As of October 2011, Vonage customers may download the free Vonage Extensions™ mobile app available on iPhone® and Android™ devices. This move was one of several announcements in 2011 launching Vonage in the mobile VoIP space.[42]

Less than a week after the announcement of Vonage Extensions™, Vonage released a free downloadable mobile application, Time to Call™, offering 15-minute calls to more than 190 countries starting at $0.99 per call. Time to Call™ is available for iPhone®, iPod touch® and iPad®.[43]

Requirements

In order to use Vonage service, customers need a Broadband Ethernet connection such as Cable or DSL through an Internet Service Provider (ISP), a billing and shipping address in the U.S. or Puerto Rico, a Vonage phone adapter (called a Vonage Box ™), and any touchtone phone (either corded or cordless).[44]

Telephone number availability

Subscribers are able to choose a number in the country of the service they subscribe to for their primary line, in an area code of their choice. Subscribers can obtain additional "virtual numbers" for a monthly fee. Vonage also offers virtual numbers in Mexico, Canada and Europe. While the company supports porting a U.S. telephone number via the FCC's local number portability (LNP), not every phone number is available in every area code. Additionally, customers can transfer an existing number to Vonage, which can take up to 7 to 10 business days from the time the customer completes the Number Transfer Authorization (NTA).[45]

Residents of the U.S., Canada, and the UK may subscribe to Vonage by credit card from their respective country, but the Vonage Box™ can be connected to the Internet anywhere.

Emergency calls

Vonage was the first company to offer 911 calling from a VoIP platform in 2003.[46] subscribers must activate their 911 calling feature by registering their address with the company. Customers are responsible for maintaining their 911 location information at all times.[47]

If a customer dials 911 before the 911 verification is completed, the call will usually be routed to a national 911 call center where basic information must be given (name, location, nature of emergency, etc.), after which the call is transferred to a local public service answering point, like a local Police Department.[48][49]

Service cancellation

To cancel service, Vonage requires customers to call a toll-free number.[50]

Quality of service and equipment compatibility

VoIP service relies upon consistent broadband-ISP uptime and VoIP-equipment compatibility with the ISP's modem. Though VoIP is optimized for voice, some fax equipment can be operated over VoIP,[51][52][53] but compatibility of monitored alarm systems and other devices is less certain.[54] Vonage offers "specially commissioned" Fax Line service.[55] Vonage recommends customers keep a basic traditional landline dedicated to their home alarm system and use Vonage for the rest of their calling needs.[56]

References

  1. ^ a b "Vonage Holdings Corp. Reports Fourth Quarter and Full Year 2010 Results". The Wall Street Journal. 15 February 2011. Retrieved 9 May 2011.
  2. ^ USPTO Latest Status Info U.S Patent and Trademark Office, Trademark Applications and Registrations Retrieval, January 13, 2004.
  3. ^ Colella, Joanne (2005-05-12). "Vonage moves corporate headquarters". Vonage.com. Archived from the original on 2005-05-12.
  4. ^ Vonage Investor Relations FAQs. Vonage.com.
  5. ^ "Is Vonage Sinking Or Coming Up for Air?; Stock's Dive at Debut Is Among the Deepest Seen in Recent Years". New York Times. June 3, 2006.
  6. ^ Vittore, Vince (November 17, 2003) Fantastic Voyage. Retrieved 2010-03-30.
  7. ^ Vonage Investor Relations FAQs. Vonage.com
  8. ^ Investor Relations Stock Quote. Vonage.com
  9. ^ a b Citi, UBS, Deutsche Bank fined over Vonage IPO Reuters.com
  10. ^ Initial Public Offerings. Investorguide.com
  11. ^ Reardon, Marguerite (June 4, 2006) Investors sue Vonage over IPO. CNET.com.
  12. ^ a b Vonage.com (June 17, 2009) Vonage Holdings Corp. Announces Agreement in Principle to Settle IPO
  13. ^ Shwiff, Kathy (September 24, 2009). Citi, UBS, Deutsche Fined Over Vonage IPO Wall Street Journal.
  14. ^ Vonage Holdings Corp. Reports Second Quarter 2010 Results Vonage.com
  15. ^ Vonage Holdings, Energy Recovery: Biggest Price Gainers (VG, ERII) Wall Street Journal.
  16. ^ Vonage Holdings Corp. Reports Second Quarter 2011 Results Vonage.com
  17. ^ Citron could not preside over the public stock offering, because he was "barred from association with any broker or dealer" of stocks by SEC Administrative Proceeding File No. 3-11031, In the Matter of Jeffrey A. Citron, Respondent. in 2003.
  18. ^ Reardon, Marguerite (June 30, 2006). "Vonage Shuffles Management". CNET.com.
  19. ^ Weiss, Todd (April 12, 2007). Vonage CEO resigns, Company Moves to Cut Costs. ComputerWorld.com.
  20. ^ Gardner, W. David (April 12, 2007). Vonage Prepares To Cut Workforce 10%. Information Week.
  21. ^ Carew, Sinead; Berlowitz, Phil (July 29, 2008). Vonage names Marc Lefar as CEO, replacing Citron. UK Reuters.com. Retrieved 2010-04-09.
  22. ^ Karpinski, Rich (August 27, 2009). Why is Vonage stock suddenly going bananas?. Connected Planet Online, Unfiltered. Retrieved 2010-04-09.
  23. ^ Vonage Data. New York Stock Exchange NYSE.com Listings Directory. Retrieved 2010-03-11.
  24. ^ Vonage Holdings CEO Discusses Q2 2011 Results - Earnings Call Transcript
  25. ^ Reardon, Marguerite (June 19, 2006). "Verizon sues Vonage for VoIP patent infringement". CNET News. Retrieved 2010-03-13.
  26. ^ Barakat, Matthew (AP) (April 7, 2007). Ruling bans Vonage from signing up new customers. Pittsburgh Post-Gazette.com. Retrieved May 17, 2010.
  27. ^ Kharif, Olga (April 25, 2007). Vonage: Away from the Edge, for Now. Bloomberg Businessweek. Retrieved May 16, 2010.
  28. ^ Thomson, Iain (November 19, 2007). Vonage owes $120m after court failure. VNUnet.com.
  29. ^ Bangeman, Eric (October 8, 2007). Vonage, Sprint settle patent dustup for $80 million. Ars Technica. Retrieved 2010-03-13.
  30. ^ Eddy, Nathan (December 26, 2007). Vonage, AT&T Agree On Patent Lawsuit Settlement. ChannelWeb.com. Retrieved 2010-03-13.
  31. ^ Gershberg, M. (NY) & Khandelwal, P. (Bangalore) (December 31, 2007). Vonage, Nortel settle patent dispute. Reuters. Retrieved 2010-05-14.
  32. ^ Vonage Standard Calling Features for VoIP Phone Service Plans vonage.com
  33. ^ a b Woyke, Elizabeth (December 31, 2009). Vonage's Second Calling. Forbes.com
  34. ^ Vonage Announces Unlimited Flat Rate Calling Around the World. Press release. Vonage.com, August 20, 2009.
  35. ^ Wortham, Jenna (October 5, 2009). Vonage releases calling apps for iPhone and Blackberry. Bits, NYTimes.com.
  36. ^ Vonage Goes Mobile: First of New Calling Applications Now Available. Press release. Vonage.com
  37. ^ Vonage World Mobile Brings Holiday Cheer. Press release. Vonage.com, December 22, 2009.
  38. ^ Furchgott, Roy (August 5, 2010). Vonage App calls Facebook Friends Free. Gadgetwise, NYTimes.com.
  39. ^ Vonage Gives Facebook Users a Voice. Press release. Vonage.com, August 4, 2010.
  40. ^ Vonage Launches New Plan With Unlimited Calling to Mobile Phones in More Than 40 Countries Press release. Vonage.com
  41. ^ Vonage Extensions Vonage.com
  42. ^ Vonage Adds Free Mobile Extensions Press release. Vonage.com
  43. ^ Vonage Announces Global Launch of Pay-Per-Call International App for iPhone with Direct Payment Through iTunes Press release. Vonage.com
  44. ^ What do I need to get service with Vonage? Vonage.com
  45. ^ Number Transfer – FAQs Vonage.com
  46. ^ Vonage Timeline Vonage.com
  47. ^ FCC Consumer Advisory: VoIP and 911 Federal Communications Commission
  48. ^ Vonage 9-1-1 dialing. Vonage.com, Features. Retrieved 2010-03-30.
  49. ^ Traditional 911 and Vonage 911 Dialing Vonage.com
  50. ^ Cancel Your Vonage Service Vonage.com
  51. ^ Faxing Issues and Other Devices. VoIPMechanic.com. Retrieved 2010-03-30.
  52. ^ Hanes, David; Salgueiro, Gonzalo (2008). Fax, Modem, and Text for IP Telephony. Cisco Press. p. 130. ISBN 978-1587052699.CS1 maint: multiple names: authors list (link)
  53. ^ Olejniczak, Stephen P. VoIP Deployment For Dummies. p. 170.
  54. ^ Jones, Paul E.(Ed.); Salgueiro, Gonzalo(Ed.) et. al. (November 17, 2009) SIP Forum - Fax Over IP Task Group Problem Statement. Internet Engineering Task Force IETF.org SIP Forum. Retrieved 2010-03-30.
  55. ^ Vonage Fax Line provides the convenience of a dedicated fax number. Vonage.com
  56. ^ Using an alarm system and Vonage. Vonage.com

External links

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