Vonage Jumps on Your Mobile

Posted by: Olga Kharif on July 29, 2009

Web-calling provider Vonage will come out with a version of its service for smartphones in the second half of 2009. “The time is right to take advantage of the penetration rate of smartphone devices and Wi-Fi by providing branded mobile applications,” Vonage spokesman Charles Sahner tells BusinessWeek.com. The move was first reported in this story.

The plan is to offer a Vonage app for all of the leading smartphones. “We are talking to the big guys, those most material to the market,” Sahner says. The company plans to enable cheap long-distance and international calling via cellular networks as well as Wi-Fi hotspots. It’s also playing with advanced features, which might allow users to link their home and mobile phones and the computer, he says.

Vonage’s apps could prove to be a major wake-up call for Skype, Truphone and other companies that already offer cheap calling via the iPhone and other mobile devices. Today, Vonage is servicing some 2.6 million lines, used by consumers and small businesses to make calls via a fixed broadband connection and a special modem. Many of these users may wish to also use Vonage’s service on the go.

The smartphone service could also help Vonage attract new users, which might have opted for Skype or Truphone before. An infusion of customers would be most welcome as, for months now, Vonage has struggled with growth. It lost 6,000 customer lines in the first quarter.

Competition in the Web-calling market is heating up. And Vonage is just the latest established player to jump in. Google is pushing its Google Voice mobile product hard (and encountering some problems along the way). The market is so new, it remains to be seen who wins out. And Vonage, with its large installed base, has a better chance to succeed than most.

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Reader Comments

Rudraksh

July 29, 2009 03:44 PM

Has anyone consider magicJack as a serious competitor for VOIP ? It costs just $20/year. Yes, it is 20/yr and not a typo.

It is less than What Vonage charges per month for its unlimited calling plan.

Magic Jack allows me unlimited calling anywhere in US and Canada for one full year.

Michael

July 29, 2009 09:59 PM

I would suggest that Rudraksh either has a vested interest or he has failed to read the many online postings of the multiplicity of problems encountered by frustrated purchasers of magicJack.

Moosa

July 30, 2009 01:40 AM

Vonage was the first company to introduce to concept of VoIP calls but they took long time to get the mobile users where there is already Truphone, Vopium or Nimbuzz sort of big competitors exist in this market.

steve

July 30, 2009 10:38 AM

Vonage Companion-- a softphone which you can already use on a PC in wifi or EVDO to emulate your home phone service, would be a killer mobile app. Companion lets you take your home number on the road without affecting the service at home. Incoming calls ring in both places (first to pick up takes the call), and both the mobile and home user can chat at the same time on separate calls.

DWade

July 31, 2009 10:54 AM

Vonage = Minimum of $20/mo (with taxes). I like Vonage, but I don't see how they are going to compete with Skype unless they lower their prices or offer some new hardware/services that are really compelling.

Steve Shaw

August 3, 2009 06:46 PM

There is growing competition for ‘over the top’ VoIP services in the mobile space, whether Vonage, Google Voice or even Skype. While each has a different spin, one consistent benefit sited by consumers is low-cost international calling. Mobile operators must respond but the question is how?

The days of trying to block VoIP, at least via Wi-Fi, are over. Mobile operators could simply lower the price of calls to the rest of the world, but there are some other ‘smart’ alternatives to managing this threat.

One is to create ‘home zone’ service areas, through Wi-Fi access points (e.g T-Mobile’s Wi-Fi calling) or through femtocells (e.g. Sprint’s Airave) where users get a discounted rate specifically for international when attached to the access point. This approach targets locations where over the top competition is fiercest, at home or in the office.

Another option is to develop their own VoIP app. This is similar to the calling card phenomenon from the last century. Rather than just reselling discounted minutes to calling card companies, the major incumbents developed their own calling card brands. Subscribers still paid international calling rates for direct dial calls, but those willing to dial extra digits before their call, could get sizeable discounts.

Consumers are willing to download a VoIP app to their smart phone, but today the incumbent mobile operators don’t offer this alternative. I believe we will begin to see operators developing their own mobile VoIP apps , which lets them supply consumers with discounted international calling, while protecting their core mobile subscriber base.

David

August 5, 2009 07:47 PM

I have used Vonage for 3 years and I love the service, I certainly have appreciated the savings , and the value of having control over my phone service via the IP protocal.

tyler

August 7, 2009 12:27 PM

Air rave is crap and it blocks other cell phones in its area from making or receiving calls.

Vonage has provided excellent service for the past 4 years. Never had problems and I can use my phone wherever I can plug into a network.

Now I use Google voice with my vonage and mobile line.

Vivek

August 27, 2009 11:02 PM

I Love Vonage. I have used it for years and had no problem and now they have the "World Plan" where for same $24.99 they have 60 countries included from earlier 5 (Ireland, France, UK, Spain & Italy) and many of them are cell and land lines. can't beat that.

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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