Vonage May Launch An MVNO

Vonage is expanding. BusinessWeek reports that the VOIP seller “could remake itself into a wireless service provider and start selling broadband access and content services nationwide.” The move into the MVNO market, BusinessWeek hypothesizes, might give Vonage “a better shot at profitability.” The article lists some of the major threats to Vonage’s existing business (cable companies now have 67 percent of the U.S. VOIP market) and it notes that one of Vonage’s VOIP competitors, Skype, “has been striking deals to put its software onto wireless phones as well.” Most analysts surveyed in the article applauded the diversification move, although Albert Lin of American Technology Research expressed concerns that costs might rise as a result. They’re pretty high already: In an earning confrence call last week, company’s executives acknowledged that customer acquisition costs had reached $306 per subscriber, up 25 percent from the year before. Vonage says it will start selling wireless services in the second half of the year.

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