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Vonage (NYSE: VG) is a publicly-held commercial
voice over IP (VoIP) network and SIP company that
provides telephone service via a broadband
connection (the company's name is a play on their
motto "Voice-Over-Net-AGE").
Vonage promotes itself as "Vonage the Broadband
Phone Company®" in the U.S. and as "Leading the
Internet Phone Revolution." Vonage currently holds
the most subscribers, and is currently operating
on 2.2 million subscriber lines having completed
well over 5 billion calls.[citation needed] Vonage
has led the Voice over Broadband (VoBB), or
Broadband Phone industry through its aggressive
consumer marketing in the United States, Canada,
UK and other countries globally.
In order to use the service, customers must
purchase or use a branded "VoIP router" or a phone
adapter that connects to their main router or
broadband modem. In addition, an upload speed of
30–90 kbit/s as well as a reliable/QoS optimized
connection is necessary to make calls without
substantial lag or jitter.
Vonage was originally based in Edison, New Jersey
but is now located in Holmdel, New Jersey, in a
building previously occupied by Prudential. Vonage
offers services to subscribers throughout the
United States. The company expanded into Canada in
April 2004 and into the United Kingdom in January
2005.
On April 12, 2007, Vonage CEO Michael Snyder
agreed to step down as Chief Executive Officer and
resign from the company's Board of Directors. In
his place, Chairman and Chief Strategist Jeffrey
A. Citron will serve as Interim CEO. The company
also announced plans for 10% (180) layoffs.
Vonage went public on May 24, 2006 at a price of
$17 per share. The closing price on 25 March 2007
was $3.00.
Prior to the IPO, Vonage solicited its customers
via automated phone call announcements and emails
with an offer to buy shares of the IPO. The price
fell $2.15, or 12.7 percent, 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 (pending March
2007), earning the Vonage IPO a Business 2.0
Magazine award as 14th of 101 Dumbest Moments in
Business for 2006.
Vonage requires customers to cancel service by
calling a toll free number, as service
cancellation is not available on-line. Customer
descriptions of the cancellation process
frequently involve hold times of approximately ten
minutes, depending on call volume. Difficulties
faced by customers when attempting to cancel
Vonage have been detailed in blogs as well as a
May 2006 Wall Street Journal article[16] which
related one customer's experience with a Vonage
representative who refused to cancel an account
unless a repair attempt was allowed by the
customer.
Despite marketing their service as having no
contracts or long term commitments, Vonage charges
customers a fee for cancellation within the two
years of service, changed from one year February
1st, 2007. This fee is noted in the provider's
Terms of Service when a customer signs up or
attempts to access their Web Account. The fee is
$39.99 per physical voice line which is
disconnected. This fee does not apply to dedicated
fax lines, virtual telephone numbers, or the
computer-based "SoftPhone" lines. A "Rebate
Recovery" fee is also assessed if the account is
canceled after the 30 day money back guarantee,
but before 180 days of service. This fee is the
"instant rebate" which is offered on the web site
when signing up and is different for each device.
This fee, if applied, protects the company from
having bogus accounts signed up and canceled
shortly thereafter for free or discounted routers
that can then be sold for profit.
As of March 2007, FCC employees say that Local
Number Portability rules do not apply to VoIP
service providers such as Vonage. Vonage claims
that subscriber numbers may be transferred to
other companies, however, their cumbersome
procedures seem designed to routinely delay or
deny number transfers. Vonage says that LNP
transfers are handled by Focal Communications.
However, Focal was acquired by Broadwing
Communications which itself was acquired[18] by
Level3 Communications, with unknown
impact[citation needed] on LNP transfers.
Customers must cancel their service and give up
their local telephone numbers to leave Vonage,
according to section 2.11 of the latest Vonage
Terms of Service. Many customers are extremely
unhappy about the loss of their telephone numbers.
Vonage does not play a direct role in the port-out
process, but customers can bring their number with
them to another carrier of their choice. Same as
when they ported the number into Vonage, customers
must contact the carrier they want to bring the
number to and authorize the transfer to take
place. The carrier then communicates with a
Service Bureau, which then acts as the
intermediary to verify information about the
account (name, address, features on the line,
etc.), and if it matches, the Bureau reassigns the
possession of the number to the new carrier. Since
this is done at the customer's discretion, Vonage
does not assist in the port out process, but they
cannot restrict the number from being transferred.
If the number is declined for transfer, this is
done by the Service Bureau, usually because of a
name or address mismatch.
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