[qi:004] Vonage (VG), the beleaguered VoIP service provider, has reported its second-quarter earnings, and things are not looking good. The numbers might have impressed some, but the fact remains that the company is walking a tightrope. Looking beyond the revenue (which at $206 million was lower than analysts’ expectations), Vonage is experiencing a substantial slowdown when it comes to signing up new customers, and the churn is up.
In the second quarter, the company had 57,000 net adds, down 37% from the first quarter, and substantially below analysts’ expectations. The churn is up 2.5% in the second quarter vs. 2.4% in the first quarter of 2007. And Vonage continues to pay out royalty fees, even while claiming that workarounds are in place. This is proving to be a tough year for VoIP service providers, as evidenced by slowing growth at Vonage and the flameout of SunRocket.
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