Comments on: BellSouth to Buy Vonage for $3.5 billion? … Not Likely http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/ Trusted Insights and Conversations on the Next Wave of Technology Thu, 26 Nov 2009 03:26:30 +0000 http://wordpress.com/ hourly 1 By: Ilmar Lui http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18542 Ilmar Lui Thu, 26 Jan 2006 03:46:57 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18542 <p>Sky is now the world's largest Voice Over Inbternet (60 million subscribers) and calls are it is totally free. It was just bought EBay for about $3.6 B. How did South Bell miss out on it? And what is Sout Bell going to do about it?</p> Sky is now the world’s largest Voice Over Inbternet (60 million subscribers) and calls are it is totally free. It was just bought EBay for about $3.6 B. How did South Bell miss out on it? And what is Sout Bell going to do about it?

]]> By: Om Malik — » End of Those Vonage-BellSouth Rumors? http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18541 Om Malik — » End of Those Vonage-BellSouth Rumors? Sun, 13 Nov 2005 00:58:22 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18541 <p>[...] The rumors of BellSouth buying Vonage for some insane amount of money have been doing the rounds for a long time. A news announcement from the company however should be enough to put those rumors to rest. BellSouth announced that it is working with Lucent and will build out a VoIP network in its 9-state territory. In the press release, BellSouth CTO Bill Smith was quite explicit about company’s VoIP plans and added, “BellSouth’s new consumer VoIP capability is a critical component leading to a comprehensive experience that integrates voice, data and video in a way that best meets the needs of the individual customer.” Given this development, I wonder what are the “buyer” options for Vonage? [...]</p> [...] The rumors of BellSouth buying Vonage for some insane amount of money have been doing the rounds for a long time. A news announcement from the company however should be enough to put those rumors to rest. BellSouth announced that it is working with Lucent and will build out a VoIP network in its 9-state territory. In the press release, BellSouth CTO Bill Smith was quite explicit about company’s VoIP plans and added, “BellSouth’s new consumer VoIP capability is a critical component leading to a comprehensive experience that integrates voice, data and video in a way that best meets the needs of the individual customer.” Given this development, I wonder what are the “buyer” options for Vonage? [...]

]]> By: Carl http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18540 Carl Sat, 16 Jul 2005 23:38:52 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18540 <p>Various events - from more likely to less likely:</p> <p>BLS sells Cingular share to SBC BLS buys Sprint</p> <p>The problem with BLS buying Vonage is it puts them in the VOIP game at a level so far over the other guys (SBC, Verizon) that it seems oddly disproportionate.</p> Various events – from more likely to less likely:

BLS sells Cingular share to SBC BLS buys Sprint

The problem with BLS buying Vonage is it puts them in the VOIP game at a level so far over the other guys (SBC, Verizon) that it seems oddly disproportionate.

]]> By: Thomas Hirsch http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18539 Thomas Hirsch Fri, 15 Jul 2005 17:20:06 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18539 <p>Recent interview with CTO of BellSouth clearly indicates that BLS is very worried about VoIP attacking the very core of its business. Read this snippet from the interview (om: This is "fair use" not copyright violation) --</p> <p>--Smith soon cuts to the chase on his company's involvement with IPTV: "From a competitive perspective, voice over IP has been a very good vehicle for cable companies to come in and attack our core business. I think IPTV may be an equally good opportunity for us to go in and attack their core business"....</p> <p>from http://www.lightreading.com/document.asp?doc_id=77250&WT.svl=news1_1</p> Recent interview with CTO of BellSouth clearly indicates that BLS is very worried about VoIP attacking the very core of its business. Read this snippet from the interview (om: This is “fair use” not copyright violation) –

–Smith soon cuts to the chase on his company’s involvement with IPTV: “From a competitive perspective, voice over IP has been a very good vehicle for cable companies to come in and attack our core business. I think IPTV may be an equally good opportunity for us to go in and attack their core business”….

from http://www.lightreading.com/document.asp?doc_id=77250&WT.svl=news1_1

]]> By: Carl http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18538 Carl Fri, 15 Jul 2005 12:51:02 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18538 <p>Maybe BLS is sniffing, but not for Vonage.</p> Maybe BLS is sniffing, but not for Vonage.

]]> By: James Enck http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18537 James Enck Thu, 14 Jul 2005 15:56:35 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18537 <p>It's interesting to note that one of the early trials of Vonage in the consumer space was done in conjunction with BellSouth. Vonage claim that at the end of the trial period, the majority of participants expressed an interest in staying with them, and that BellSouth ended the relationship. Presumably if BellSouth considered Vonage so threatening/appealing back in early 2002, they could have taken them out for far less than $3.5bn.</p> It’s interesting to note that one of the early trials of Vonage in the consumer space was done in conjunction with BellSouth. Vonage claim that at the end of the trial period, the majority of participants expressed an interest in staying with them, and that BellSouth ended the relationship. Presumably if BellSouth considered Vonage so threatening/appealing back in early 2002, they could have taken them out for far less than $3.5bn.

]]> By: Thomas Hirsch http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18536 Thomas Hirsch Thu, 14 Jul 2005 13:44:54 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18536 <p>Jeff - Like several other so-called experts, you do not think things through in a serious manner, perhaps because you are crazy. Look at it this way -- AT&T CallVantage has --maybe-- 80,000 customers, despite heavy advertising and the AT&T name. That's roughly 1/10 of Vonage's customers. Further, in a sophisticated comparison released yesterday by Keynote (or similar name) Vonage was rated best VoIP provider. Some nuts think it is easy to set up and run a VoIP system. That is just not the case. By the way, I have no interest in Vonage, just like to tell it like it is....</p> Jeff – Like several other so-called experts, you do not think things through in a serious manner, perhaps because you are crazy. Look at it this way — AT&T CallVantage has –maybe– 80,000 customers, despite heavy advertising and the AT&T name. That’s roughly 1/10 of Vonage’s customers. Further, in a sophisticated comparison released yesterday by Keynote (or similar name) Vonage was rated best VoIP provider. Some nuts think it is easy to set up and run a VoIP system. That is just not the case. By the way, I have no interest in Vonage, just like to tell it like it is….

]]> By: Jeff Bonforte http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18535 Jeff Bonforte Thu, 14 Jul 2005 13:17:42 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18535 <p>Thomas (comment above), are you crazy? Vonage spend $1B? Seeing as Vonage has not raised more than about $400mm, it would be hard to believe that they have spent more than $1B. Furthermore, under NO CIRCUMSTANCES does it make sense for Bell South or anyone else to buy Vonage for that much money. How much brand do you think a company could build for $3.5 Billion. More importantly, for that, they could offer VoIP for $5/mo and get their 800k customers in about 3 months...and then go on to lose plenty of money like Vonage will.</p> Thomas (comment above), are you crazy? Vonage spend $1B? Seeing as Vonage has not raised more than about $400mm, it would be hard to believe that they have spent more than $1B. Furthermore, under NO CIRCUMSTANCES does it make sense for Bell South or anyone else to buy Vonage for that much money. How much brand do you think a company could build for $3.5 Billion. More importantly, for that, they could offer VoIP for $5/mo and get their 800k customers in about 3 months…and then go on to lose plenty of money like Vonage will.

]]> By: Thomas Hirsch http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18534 Thomas Hirsch Thu, 14 Jul 2005 12:48:16 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18534 <p>Look at it this way: How much would it cost to set up a VoIP service with 800,000 paying customers (growing by maybe 50,000 per month)? In addition, how much would it cost to make your trade name almost synonymous with VoIP? Further, if VoIP is just starting its growth, Vonage could easily become huge in a few years -- possibly with more customers than BLS now! Looked at it this way, the rumored $3.5 billion price tag makes sense. Also, don't forget that Vonage must have spent well over $1 billion so far in setting up its business.</p> Look at it this way: How much would it cost to set up a VoIP service with 800,000 paying customers (growing by maybe 50,000 per month)? In addition, how much would it cost to make your trade name almost synonymous with VoIP? Further, if VoIP is just starting its growth, Vonage could easily become huge in a few years — possibly with more customers than BLS now! Looked at it this way, the rumored $3.5 billion price tag makes sense. Also, don’t forget that Vonage must have spent well over $1 billion so far in setting up its business.

]]> By: Sam Allen http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18533 Sam Allen Thu, 14 Jul 2005 09:46:19 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18533 <p>The discussion on cost per subscriber is apples and ornages. That's valid for discussions on established cable systems, telco CO's and lines and where cash flow is a primary factor. It's not valid for valuation of something like Vonage which would be more similar to growth companies. That's not saying 3.5B doesn't seem out of line unless there's a lot that comes with it that's unknown, since Vonage is private.</p> The discussion on cost per subscriber is apples and ornages. That’s valid for discussions on established cable systems, telco CO’s and lines and where cash flow is a primary factor. It’s not valid for valuation of something like Vonage which would be more similar to growth companies. That’s not saying 3.5B doesn’t seem out of line unless there’s a lot that comes with it that’s unknown, since Vonage is private.

]]> By: Aswath Rao http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18532 Aswath Rao Thu, 14 Jul 2005 04:28:07 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18532 <p>One more time, there is no revenue in video over IP. After all, VoIP is free with in the walled garden. Similarly, video over IP should be free. Attempts to charge have ended in failure, as demostrated by other providers.</p> One more time, there is no revenue in video over IP. After all, VoIP is free with in the walled garden. Similarly, video over IP should be free. Attempts to charge have ended in failure, as demostrated by other providers.

]]> By: The Stalwart http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18531 The Stalwart Thu, 14 Jul 2005 03:58:37 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18531 <p><strong>An Absurd Rumor</strong></p> <p>Apparently, theres a rumor going around</p> An Absurd Rumor

Apparently, theres a rumor going around

]]> By: morris http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18530 morris Thu, 14 Jul 2005 03:01:19 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18530 <p>well see SIRI at close to 10 bil in market cap which gets $13 a month charge per subs then vonage which charge atleast $25 per subs monthly,vonage will have 1.2 mil by year end + don't forget the video over ip and wirless vonage.</p> well see SIRI at close to 10 bil in market cap which gets $13 a month charge per subs then vonage which charge atleast $25 per subs monthly,vonage will have 1.2 mil by year end + don’t forget the video over ip and wirless vonage.

]]> By: Martino Mingione http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18529 Martino Mingione Thu, 14 Jul 2005 02:32:08 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18529 <p>Wow, at $4375 per subscriber, that would mean that each Vonage subscriber would be worth as much as each Cablevision subscriber. The Dolans attempt to bring the cable company private is pegged at that metric. The Adelphia transaction was valued at $3500 per sub.</p> <p>Even though the Vonage story is a rumor, do VoIP companies really think that this valuation is realistic?</p> Wow, at $4375 per subscriber, that would mean that each Vonage subscriber would be worth as much as each Cablevision subscriber. The Dolans attempt to bring the cable company private is pegged at that metric. The Adelphia transaction was valued at $3500 per sub.

Even though the Vonage story is a rumor, do VoIP companies really think that this valuation is realistic?

]]> By: morris http://gigaom.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18528 morris Wed, 13 Jul 2005 23:54:17 +0000 http://gigaom.wordpress.com/2005/07/13/bellsouth-to-buy-vonage-for-35-billion-not-likely/#comment-18528 <p>EXCELLENT NEWS FOR XTEN SINCE VONAGE SELL XTEN'S SOFTPHONE.</p> EXCELLENT NEWS FOR XTEN SINCE VONAGE SELL XTEN’S SOFTPHONE.

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