Vonage boss: We are here forever

Vonage chief Jeffrey Citron has been out spruiking the pure-play VoIP company ahead of the company's Q4 result, this week declaring that as far as VoIP is concerned, Vonage "is the sector," and "Vonage is the only company that matters." In an upbeat assessment of the company's prospects he told USA Today: "Vonage and VoIP will be here forever."

Maybe. Comcast and its four million digital voice customers might take some exception to Citron's claim Vonage is the only VoIP company that matters. So too eBay's VoIP juggernaut, Skype, and its 270 million users.

As for Citron's claim Vonage will be "here forever," that will turn on Citron being able to convince his financiers to renegotiate $250 million in bonds due at the end of the year. The convertible notes can be exchanged for stock, but this is unlikely given the stock is trading in a $2 range compared with a high of $13.33 when it was floated back in 2006. In an SEC filing earlier this month, Vonage said it would generate positive operating cash for Q4 which will be the start of a long haul back after writing $240 million of patent infringement checks. In the same filing, Vonage said it expected revenues of more than $800 million for the year, but added that churn would remain stuck at a high three percent. The filing said Vonage expected to generate positive adjusted income for 2008.

In another filing yesterday, Greywolf Capital Partners said it now had 9.3 percent of the stock, up from 5.9 percent a year earlier, so at least someone thinks the shares might be worth more than $2. As previously noted, many in the market believe Sprint could be the white knight that saves stockholders.

Meanwhile, Citron also said Vonage was looking at a "mobile service."

For more:
- Vonage chief stays sunny about the future Article [1]
- Vonage to deliver mobile service Article [2]

Related articles:
Vonage loses patent appeal Report [3]
Can Vonage do it? Report [4]