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I had a chance to meet with Jeffrey Citron, founder and chief executive of Vonage yesterday. He was part of my Web 2.0 panel, and while we did not get a chance to ask a lot of questions, he answered most of them in an offline […]

I had a chance to meet with Jeffrey Citron, founder and chief executive of Vonage yesterday. He was part of my Web 2.0 panel, and while we did not get a chance to ask a lot of questions, he answered most of them in an offline conversation. When asked to comment about Michael Robertson’s SIPphone suing his company, Citron, who has never been accused of being shy, said, “Robertson took a cheap shot for publicity. They did not sue Cisco which makes the devices, and Fry’s which sells them.” When I asked him, but shouldn’t everyone’s hardware work with everyone’s service. Citron commented, “Canon’s toner cartridge doesn’t work with Xerox copiers.” His argument is that his boxes are optimized for Vonage. Robertson had emailed me with this, “Personally, I don’t want a world where the store shelf has 20 different identical telephone adapters: on locked to Vonage, one locked to AT&T, one locked to Verizon, etc. What a mess! Thank god analog modem, DSL modem and cable modem didn’t go down that path.”

Vonage, he says is doing quite well thank you. At the end of third quarter 2004, Vonage had about 285,000 subscribers and added net 82,000 subscribers in this past quarter. He expects 4Q to exceed those numbers, as the company’s service will be sold in 8500 retail outlets, versus 7000 right now. He expects subscribers to grow more than three times next year. (Jupiter Research expects total VoIP subscribers to jump to 12 million over next five years from current 400,000.) When I probed about the excessive competition, especially now that AT&T and others have jumped into the space, Citron said that in next 12 months, we will be left with 6-to-12 meaningful players. He says Vonage hasn’t really seen anything worth buying, though he did not rule out consolidation. “Small players will be squeezed badly,” he predicted. Well with over $200 million in venture funding, he can afford to be a little glib. He took a jab at AT&T and said, just ask them how many consumers they have signed up despite all the marketing blitz. Despite his optimism, Citron thinks that it will take more than five to ten years before IP share of voice traffic is over 50% of the total traffic. Vonage expects to launch a UK version of the service sometime before the end of the year.

  1. I would LOVE to know “”HOW MANY ATT””” voip customers they truly do have??????????????

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  2. Craig Poschmann Friday, October 8, 2004

    How much money is Vonage spending to acquire a customer and is it actually worth the money, especially, if, within a couple months, the customer decides to either go elsewhere, or go back to POTS. Also, I get the sense that Vonage’s spending blitz is similar to a lot of the .bomb blowups of the early 2000.

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