VoIP Consolidation, Not Any Time Soon


There have been some rumors going around that Lingo might be for sale, and Vonage might be a buyer, indicating a consolidation in the market place. Vonage, says not a chance, and they are not looking to buy anyone. One point Citron explained to me was that, contrary to the public opinion, the legal and investment banking fees when making an acquisition are more than the costs of acquiring the small players. It is easier to lure their customers than buy them, Citron says of the little VoIP guys. Many of the VoIP players are in the sub-100,000 subscriber level and they are unlikely to create any serious heft for the acquirer. The operational expenses of these little guys are quite high since they don’t benefit from the economies of scale that a large player like say Vonage or Time Warner Cable has. Citron thinks that competition is going to increase sharply, especially in small niches where many more VoIP service providers are going to jump into the fray.

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