Ads Aim to Show Vonage Edge over Major Telcos, CFO says
Court costs, inefficiency and “degraded” marketing have dogged Vonage the last 12 months, Vonage CFO John Rego said Mon. at the Bear-Stearns Conference in N.Y.C. The company hopes new ads and services, coupled with a possible 4th Circuit overturn of the Verizon patent infringement decision, will make Vonage profitable, he said.
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Vonage has paid in 6 months the equivalent of 5 years’ litigation costs in its bout with Verizon, due to the case’s accelerated pacing, Rego said. A Virginia court decided in March that Vonage infringed on 3 Verizon patents. Vonage will try to get the decision overturned on appeal this summer. As a contingency plan, Vonage is designing and deploying workarounds for the 3 infringements, to be used if the ruling isn’t overturned, Rego said. Two of the workarounds are deployed, he said. Meanwhile, Vonage’s patent infringement tiff with Sprint should be resolved with a business agreement, he said.
Rego said Vonage efficiency and marketing “degraded” the last quarter, circumstances the company hopes to improve. The VoIP market is more mainstream, so ads need to show Vonage “does not just offer a wireline replacement service” and in fact is cheaper, more portable and more feature-filled than major telcos’ VoIP and triple-play deals, he said. New ads will air soon, he said.
Vonage hopes to sell a double play of VoIP and Internet services by partnering with broadband companies, Rego said. Vonage already partners with EarthLink, he added. It also plans to partner with wireless providers and by early 2008 offer dual-mode phones able to connect wirelessly, Rego said. But first the Verizon matter must be addressed, he said.
Vonage is hunting for a new CEO, with candidates getting scrutiny, Rego said, predicting the big chair will be filled by year-end.