Vonage finds another landline partner
Last modified: May 21, 2004, 12:10 PM PDT
By Ben Charny
Staff Writer, CNET News.com
As it faces increasing competition in the market for Internet telephony services, Vonage is offering new features and expanding its reach.
A source said the company is close to announcing a deal with WilTel Communications that would expand Vonage's ability to use the traditional phone network. This in turn would let the company's customers dial a greater number of homes and offices.
Vonage needs to make such deals, because its calls are made over broadband connections using voice over Internet Protocol, or VoIP, technology. VoIP allows for less-expensive phone service because it sends calls over the unregulated Internet or private corporate networks, rather than using the traditional phone network, which is heavily regulated and taxed.
Still, providers such as Vonage need some access to landline networks so that their customers can call people who use traditional phone services. To that end, Vonage has agreements with Qwest and two other local-phone companies. The deal with Oklahoma-based WilTel would expand Vonage's coverage.
This news comes just a few days after Vonage announced it is lowering its prices. The company Monday reduced the price of monthly unlimited North American dialing from $35 to $30.
Additionally, Vonage recently announced the release of Click-2-Call, which lets users dial directly from their Microsoft Outlook contact listing. Vonage also plans, at summer's end, to sell phones that use Wi-Fi connections, said Michael Tribolet, Vonage executive vice president.
The push illustrates the pressure Vonage feels now that AT&T and other major U.S. telephone companies have entered the market for Internet phone services.
The cost savings inherenet with VoIP can be as high as 30 percent. Moreover, VoIP providers often offer for free many of the premium features like voice mail. As competition heats up, providers are struggling to differentiate themselves.
"We're operating under an innovate-or-die strategy," Tribolet said. |
