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Can Vonage Become a Top Phone Company?

Techstination feature for Monday, March 15, 2004

Can a little company called Vonage become one of the top U.S. telephone carriers? Bloomberg Boot Camp, a report on today's technology. Vonage is in what is called the voice over IP telephone business. So far, CEO Jeffrey Citron says, his company has attracted 120 thousand customers…who have turned their high speed Internet connections…into phone lines as well. The advantages…

"The biggest advantages are, one, you're likely to save 40 to 60 percent off your current phone bill. Two, you can get some pretty cool great features like the ability to choose any phone number you want from 180 different area codes. You can take your box with you or take a number with you when you move around. It's global. And finally, things like voice mail become much richer of an experience. You can listen to your voice mails via the Web or have your voice mails emailed to you as a .wav file."

Citron predicts his service will become as well known as the big names in the phone business…as the popularity of the service grows…

"Voice over IP has a transforming effect. It's sort of like the Internet back in 95 and 96. It's the very beginning of a ground swell that will forever alter the way in which we communicate. It may take a decade or so before it's complete, but over the next ten years literally every single person will go from traditional analog voice But with well known carriers like AT&T getting into the voice over IP business too…how will Vonage compete…to some form of packetized digital voice with true convergence."

Vonage is about to face lots of competition in the space, but with its service now being sold by some big electronics retailers, including Circuit City, Citron expects subscriber growth to nearly triple by the end of the year. Bloomberg Boot Camp, I'm Fred Fishkin.