Is the end near for Vonage?

from JoeUser Forums

In answer to my headline question, I'll speak for myself and answer yes, at least for my time as one of their customers.

In news today, there are headlines like this one (linked): Vonage's Prospects Dim from Business Week (and similar news is out on C-Net's www.news.com site).

Vonage had been a booming telco like company, selling an innovative product at a highly competitive price, Voice over IP service that gave customers telephone service that worked over the internet.  It was inexpensive and yet very feature rich with the standard suite of add-on features thrown in for free (call-waiting, caller id, 3 way calling, voice messages, etc.)

Unfortunately Vonage has been found guilty of stepping on some very broad patents that had been awarded to Verizon some time back.  I still question the validity of those patents as, in reading about the situation, it seems that Verizon may have pulled some pretty sneaky tricks in trying to get the output of industry working groups declared their own intellectual property.  Verizon's patents also seem, to me, to be suffering from the whole 'obviousness' factor that would normally have a patent declared invalid and unenforceable, but that didn't stop Verizon's lawyers from pursuing the case again Vonage, and it didn't stop a jury from deciding that Vonage did infringe upon 3 of Verizon's patents.

Vonage has also infringed upon some patents that belong to Sprint, and the double whammy from both of these cases, with the Sprint case just having been decided, and the Verizon case just being lost on the appeal, seems to be more than Vonage may be able to survive.

I'm sad at this news as it looks as if Vonage will likely not survive, or not survive long term.  I've stated elsewhere that I think it would make perfect sense for Vonage to merge with Sprint.  I said that before the Sprint case was decided, for many of the same reasons pointed out in the originally linked article above.  If Sprint were to buy (probably at a heavy discount) Vonage they could use their own technology to avoid the infringement upon Verizon's patents and in doing so would offer up a heck of a competitor -- with a well known brand name -- to the cable companies and AT&T and Verizon.  Sprint could then package (bundle) both wireless services (cell phones) and a land-line type service (VOIP) so that their customers could get a great pricing deal on all of their phone service needs.

I hope that Sprint and Vonage do wind up coming together, and that Vonage is able to stick around for the long haul, but given the current state of their rapidly shrinking market (as many customers jump into bundled offerings from cable companies) I'm not sure that will ever happen.

I'll add a few more words in the comments area if you are interested in continuing this read.

business
7,673 views 3 replies
Reply #1 from JoeUser Forums Top

And here are those added words promised above.

In my case I wound up joining some of the other rats that have been jumping off the Vonage ship and though it makes me feel dirty to admit it, I'm jumping over to Verizon (who I still feel is the bad guy here) and their Voice Wing service.

I've had Vonage for a few years now and have saved a ton of money -- compared to Verizon's traditional phone services -- over that time.  I've especially done fairly well with them over the last 8 - 9 months time as I pre-paid for a year of Vonage service back at the beginning of the year at a great price.  I didn't know at the time that the Verizon patent infringement issue was going to come along and be a problem for Vonage, and felt that Vonage had done well by me and would be around for the long haul.

At that time, Vonage was still advertising heavily with banner ads, their radio sponsorship of some sporting events and such, and that whole 'Woohoo, woo hoo hoo' catchy jingle.  Those advertisements were getting new customers at a great pace, and they were in great shape for the long term.  Unfortunately in the interim period the cable companies have rapidly expanded into the telephone service market, and once the initial decision in the Verizon case was announced Vonage started seeing some of their customers leave.

That abandoning of the ship got worse, and has been magnified several times over, thanks to the boarding up of former competitor Sunrocket.com.  Sunrocket went out of business with just about no notice to customers leaving many hanging without a net.  One day there was service, the next day nothing.  Customers had problems getting numbers ported over to other providers and many may have just started all over again with new phone numbers.

I'd rather avoid those problems myself, so I'm making the jump now, even though I have 3 months (give or take) of service still paid for with Vonage.  It'll take about a month to get through the process of getting Voice Wing active and having my phone number ported.  While I don't have any emotional attachment to the number, my wife has had enough of changing phone numbers and would like one that stays for a while so I'll keep the current one and go through the transition process over the next few weeks.

Again, I hope that Vonage survives long term.  I really do.  I'm not confident that they will without some help and a partner with deep enough pockets to fend off Verizon as they continually try to sue Vonage out of business.

Reply #2 from JoeUser Forums Top

I hate those "Concept" patents (the ones being used to kill Vonage).  I dont use it, but it was new and innovative, and the lawsuit  is dirty pool.  Legal, but unethical.

Unfortunately, patent law has not kept up with technology so there are tons of these patents being "infringed" upon.  Another is the (I think) Nokia one.

2 people can build mousetraps.  The idea is the same.  Capture or kill a mouse.  But I dont think anyone should be able to patent the end result, yet that appears to be what is happening in these cases.

Siege of Centauri
Reply #3 from JoeUser Forums Top

I hate those "Concept" patents (the ones being used to kill Vonage). I dont use it, but it was new and innovative, and the lawsuit is dirty pool. Legal, but unethical.

Unfortunately, patent law has not kept up with technology so there are tons of these patents being "infringed" upon. Another is the (I think) Nokia one.

2 people can build mousetraps. The idea is the same. Capture or kill a mouse. But I dont think anyone should be able to patent the end result, yet that appears to be what is happening in these cases.

That seems to be exactly the case.  Companies like Verizon sue everyone else to keep them from using what is a fairly obvious creation that most likely took it's basis from prior art (and in the case of much of what Verizon is doing from the VOIP working groups).

It stinks to high heaven and I wish that Congress would step up to the plate and institute some reforms but I'm sure they won't because the money has already talked -- to them -- and (big) business just doesn't want to see it changed.