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Monday, 13 August 2007 |
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VoIP pioneer reports workaround progress but big problems remain…
In its Q2 2007 results troubled voice over IP (VoIP) pioneer Vonage Holdings Corp says it has made good progress in deploying workarounds to side step Verizon IPR that is currently the subject of on-going legal action between the two companies (click). But Vonage is nowhere near being out of the woods yet. Not by a very long chalk.
Announcing that revenue for Q2 2007 had grown to US$206mn, a 43% increase from US$144mn in Q2 2006, Vonage chairman Jeffrey Citron said, “We made significant strides this quarter in reducing costs and narrowing our losses. Despite the continued challenges associated with the Verizon litigation, the Company maintained its focus on achieving adjusted operating profitability.”
“At the same time, we have substantially completed the deployment of workarounds for the two name translation patents and have completed the development of the wireless patent workaround. This is a significant step toward moving ahead with our business in the wake of the Verizon litigation. We look forward to the Court's ultimate decision and remain confident in the strength of our appeal,” he added.
That’s the reasonably good news. Other results for the quarter make sobering reading. For the second quarter of 2007, the company's net loss narrowed to a mere US$34mn. In the period Vonage paid Verizon US$11mn in royalty payments. And, beginning in Q2 2007, Vonage scaled back marketing expenditures to retool its marketing campaign, which led to a slowing in net subscriber line additions. Vonage added approximately 57,000 net subscriber lines during the quarter and finished with 2.45mn lines in service.
Vonage also faces further IPR litigation from Sprint (click), with that trial now reportedly set for the autumn. The company’s stock closed Friday at US2.46, down from its May 2006 IPO of US17.00.
In other VoIP news worldwide VoIP service revenue jumped 66% to US$15.8bn in 2006 after more than doubling in 2005, and is expected to more than triple by 2010. So says Infonetics Research in its new ‘VoIP Services and Subscribers’ report.
John Williamson |
