Vonage working for image makeover

This year will be the make or break year for pure play VoIP giant Vonage with its viability in the hands of its bankers who have to agree to refinance its significant debt. Vonage handed out most of its IPO cash on patent settlements to the horde of telcos that decided the best way to compete with VoIP was through the courts.

In December, some $250 million of Vonage's debt will come due for repayment. While the owners of those convertible notes can exchange them for stock, the stock is now trading in a $2 range compared with a high of $13.33 when it floated back in 2006, making it highly unlikely the lenders will accept anything but cash.

A betting person would punt on a telco bail out--Sprint does not have a residential wireline business. But in the meantime Vonage is getting on with better looking after its customers and this week announced at CES its "My Vonage" product strategy. This is Vonage's attempt to move away from the discount price trap it has fallen into and instead promote the rich feature set that comes from IP comms.

First announcement is a device called V-Portal. According to the release V-Portal is "a digital voice adapter and single port router with a built-in liquid crystal display, and contact book, an innovative one-stop communication hub with useful features such as group calling and voice activated dialing." It is being heavily rebated to new Vonage users and is on sale at $9.99 (plus a $30 activation fee for the privilege of having Vonage turn on the device!)

For more:
- Vonage to launch V Portal Release [1]
- Vonage kicks off My Vonage strategy Article [2]

Related articles:
Can Vonage do it? Article [3]
Vonage still top VoIP carrier Article [4]