  baineschile2600 ways to livePremium
join:2008-05-10
Sterling Heights, MI
 ·Comcast
1 edit | Sorry Sorry Vonage, if I want quality phone service, I will bundle with my local cable/fiber provider.
If I want cheap, granted not as high of a quality service, i will get Magic Jack. There is no viable reason to get an independant voip provider that is as pricey as the cable/pots guys, with essentially the same reliability.
Hopefully for them, they can successfully get their foot in the wireless door. | |
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| | Reviews:
 ·ooma
·Optimum Online
 ·Verizon FiOS
| Re: Google Voice will crush Vonage Thing is.. a FREE PRICE has a hard time impacting pricing competitiveness of subscription services such as Vonages $24.95 + miniscule taxes & fees making it a couple dollars more than siply $24.95. Though, once google voice provides service over SIP adapters full time with unlimited calling.. Vonage will have its oxygen supply cut off and potential customers will demand a better deal than simply $24.95 + fees-- last time I checked they're even charging/collecting in-state sales tax on the service... sheesh.
Since google is giving it away free.. there's nothing to collect for state coffers. | |
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| | | nitzanPremium,VIP
join:2008-02-27
kudos:2 | Re: Google Voice will crush Vonage said by tmc8080:Though, once google voice provides service over SIP adapters full time with unlimited calling.. Since google is giving it away free.. there's nothing to collect for state coffers. And how long do you think states are going to allow this situation to continue (no revenue from phone taxes)? Even now Google Voice is already liable for USF. If it grows larger you can be sure so will the taxes and liabilities.
Why on earth would GV want to provide you with unlimited SIP access (read: phone service) for free? their current product is a low-usage toy. If they expanded it into a full-fledged phone service they'd be losing millions of dollars a month. Not to mention they'd also be required to provide E911 which would put them even deeper in the hole.
Vonage is failing to make a profit with 2 million users who pay them $20-40 a month. Why would GV make money with the same amount of users paying them nothing???
I don't understand what Google is thinking, but eventually they will have to realize that you can't provide free service and pay for it yourself forever. The only question is WHEN they'll stop service (or start charging) - not if. And if they start charging - they'd lose 90% of their users overnight. | |
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| | | | iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
 ·Verizon Online DSL
·RoadRunner Cable
·Comcast
| Re: Google Voice will crush Vonage If MagicJack can make a profit at $20 per year, where's the bottom? Google owns their own backbone network and peers most of their traffic. Vonage doesn't. Google bought Gizmo and GrandCentral. Gizmo has a Skype-like "Call Out" service for cheap. Vonage is MUCH more expensive, probably because they inked retail agreements with Wal-Mart so they were losing money when customers started with their service. Google has people clamoring for invites; they have zero customer acquisition costs.
SIP trunking is now below a penny per minute for calls within the US, and that's a rate that you can get just by buying a few thousand minutes at once. For Google, rates would be even lower. Don't ask me how they'll pay for the service (since there will still be costs) but the costs would be something like $5 per month for someone who uses 1000 minutes. Maybe less than that.
If Google Voice comes to mobile then they CAN pay for the service easily. Mobile users using VoIP on smartphones with a cheap web plan will go on the web. By going on the web, they inevitably view Google ads of some sort. A few ad clicks and Google's costs for providing them free VoIP service are neutralized. | |
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| | | | | | | Re: Google Voice will crush Vonage said by iansltx:If MagicJack can make a profit at $20 per year Are they making a profit? | |
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| | | | | | iansltx
join:2007-02-19
Golden, CO
kudos:2 | Re: Google Voice will crush Vonage Good question. How would they keep being around though if they weren't? | |
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·Comcast
| Re: Google Voice will crush Vonage said by iansltx:Good question. How would they keep being around though if they weren't? How does Vonage? How does Charter? How does GM? Cash flow and investor money have a lot to do with it. | |
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| | | | | | | nitzanPremium,VIP
join:2008-02-27
kudos:2 | said by iansltx:Good question. How would they keep being around though if they weren't? It's a pyramid - as long as they're growing, they make positive cash flow. Once they stop growing - the bubble will burst and they'll go out of business. They've only been around for a couple of years (read: growing) so it's far too early to conclude they're "profitable". They're making a profit short term - doesn't mean they're profitable long term.
Think about it like this: let's say it costs them $5 a month to provide service. They charge $40 the first year. Let's assume they get 50k new subscribers every month since January, then it slows down 10k subscribers each month after. it'll look like this:
January revenue: 50k * $40 = $2mil
January expenses: 50k * $5 = $250k
February revenue: 50k * $40 = $2mil
February expenses: 100k * $5 = $500k
March revenue: 50k * $40 = $2mil
March expenses: 150k * $5 = $750k
April revenue: 50k * $40 = $2mil
April expenses: 200k * $5 = $1mil
May revenue: 50k * $40 = $2mil
May expenses: 250k * $5 = $1.25mil
June revenue: 50k * $40 = $2mil
June expenses: 300k * $5 = $1.5mil
July revenue: 40k * $40 = $1.6mil
July expenses: 340k * $5 = $1.7mil
August revenue: 30k * $40 = $1.2mil
August expenses: 370k * $5 = $1.85mil
September revenue: 20k * $40 = $800k
Septmber expenses: 390k * $5 = $1.95mil
These numbers are of course not accurate and made up - but the principal is the same. You can provide service below your cost and make (lots of) money short term - but at some point in the future you'll go out of business. | |
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| | | | | | | | iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
·Verizon Online DSL
·RoadRunner Cable
·Comcast
| Re: Google Voice will crush Vonage Alternately, providing VoIP service is a LOT less expensive than people think it is, and if you cut out customer service costs (which I'm pretty sure MJ has almost succeeded in doing), cut out the bulk of your per-minute telephony charges (which MJ has done through the voice equivalent of peering agreements with all the major carriers) and run your servers on cheap bulk bandwidth (XO in MJ's case, so they won't get depeered by anyone) you have a very tight ship and can make money where people thought it wasn't possible.
*shrugs* By your logic, Google is losing a ton on GMail...which it isn't. A single ad click gives them plenty enough to provide service for an extended period. | |
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·Comcast
| Re: Google Voice will crush Vonage Still way too many if's, maybe's, could be's.. there is no proof right now at 20 per year per customer that they are actually making money. But between network costs, stocking DID's, employee salary and taxes it looks very difficult to break even much less make a significant profit. | |
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·Comcast
| Re: Google Voice will crush Vonage They are paying for DID's, whether they are buying them on their own (doubtful) or through someone else... there is a cost involved. | |
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| | | | | | | | | nitzanPremium,VIP
join:2008-02-27
kudos:2 | said by iansltx:Alternately, providing VoIP service is a LOT less expensive than people think it is Simply not true.
I can tell you from experience (and I do have quite a bit of it...) - that VoIP service costs a lot more to provide than what many people think.
*shrugs* By your logic, Google is losing a ton on GMail...which it isn't. A single ad click gives them plenty enough to provide service for an extended period.
Apples and oranges. A 10 minute voice call costs thousands of times more to deliver than it would cost to deliver an email.
There's no escaping it - completing telephone calls costs money. You can play with the numbers and make believe all you want - but meanwhile Vonage publishes their per-line costs at $8/month. Our experience has been pretty similar. If you think MJ or GV somehow found a magic way around these costs then it's your right to be wrong.  | |
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| | | | | | | | | | | Re: Google Voice will crush Vonage Google pretty much has. They use Bandwidth.com. They're a major reseller and have partnered with just about every company to do that with. They resell L3 services, Qwest bandwidth and are a major player with the cable companies and others to do this.
www.bandwidth.com Google even brands their 411 service with "call completed by Bandwidth.com"
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www.two-pugs.com www.twopugsbrand.com | |
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| | | | | | | | | nitzanPremium,VIP
join:2008-02-27
kudos:2 | Re: Google Voice will crush Vonage said by hottboiinnc:Google pretty much has. They use Bandwidth.com. They're a major reseller and have partnered with just about every company to do that with. They resell L3 services, Qwest bandwidth and are a major player with the cable companies and others to do this. www.bandwidth.com Google even brands their 411 service with "call completed by Bandwidth.com" So Google pays bandwidth.com to complete their calls. how is this getting around having to pay to complete calls? they still have to pay a wholesale carrier - be it bandwidth.com, Level 3, or anyone else. And that wholesale carrier still has to pay the phone company at the other end of the line.
When you make a call from GV to an AT&T land line, what probably happens is Google pays bandwidth.com per-minute rates to deliver the call. bandwidth.com pays Level 3 (or whoever) to deliver it for them. Level 3 then pays AT&T reciprocal compensation to deliver the call.
If you think any one of those inbetweens are going to give up their cut just because they heard the name "Google" - you're wrong. | |
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| | | | | | | | | | | Re: Google Voice will crush Vonage I didn't say Google gets the services for free. I said they don't pay the full price. Nobody as big as they are pays full price. Hell VZ and ATT don't even pay each other full price for anything. Only the small guys, like your VoIP company, pays full price or close to it.
And I come up with this because of the Bandwidth.com tag, if Google wasn't getting a break or something out of the deal they wouldn't be advertising Bandwidth.com.
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www.two-pugs.com www.twopugsbrand.com | |
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| | | | | | | | | nitzanPremium,VIP
join:2008-02-27
kudos:2 | Re: Google Voice will crush Vonage Of course they get a price break - but it's not nearly as big as you think. You're probably imagining a 50% or more price break. In reality they only get 20% or so most likely.
Again- remember a large portion of the per-minute price goes to reciprocal compensation (i.e. the phone company on the other end) - they don't haggle (they don't need to) and charge the same regardless of how big or small you are. The only factor that Google can haggle over is the profit margin Level 3 or whoever gets from them. And while that's a break in itself - it's limited.
And the bottom line is - it costs them money and a lot of it. | |
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| | | | | | |  dvd536as Mr. Pink as they comePremium
join:2001-04-27
Phoenix, AZ
kudos:4 | said by iansltx:Good question. How would they keep being around though if they weren't? I don't think ever since their inception has vonage EVER made a profit.
no wonder they make it so tough to cancel.
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When I gez aju zavateh na nalechoo more new yonooz tonigh molinigh - Ken Lee | |
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| | | | | | | Google actually partnered with Bandwidth.com who resells their services from L3 and Qwest Business.
If you use Google 411 it will tell you the call is connected by bandwith.com.
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www.two-pugs.com www.twopugsbrand.com | |
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| | | informpageNever Be Satisfied
join:2003-07-09
Forest Hills, NY | Wait until Google rolls Google Voice / Gizmo into Android - no need for an ATA - your phone picks up a wifi signal and routes your calls that way. My Nokia does it already, just not very seamlessly. T-Mobile does it seamlessly for a cost. How long before Google moves in to that space? | |
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| | | Re: Sorry fortunate or unfortunate, I agree with this entirely | |
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1 edit | Too expensive for low volume users Vonage needs to have a cheap plan for low volume users. Something like $5/month.
I would have stayed with them if they had that.
Instead they tried to force everyone into their unlimited plans which were simply too expensive and another bill I was glad to get rid of. | |
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| | | Re: Too expensive for low volume users said by fifty nine:Vonage needs to have a cheap plan for low volume users. Something like $5/month. I would have stayed with them if they had that. Instead they tried to force everyone into their unlimited plans which were simply too expensive and another bill I was glad to get rid of. They do but you have to insist on it. It's the $4.99 per month "no volume" plan they call Customer On Hold. All outgoing calls are about 4.5 cents a minute (toll free are still free). Incoming is free. With taxes, the $4.99 does add up to about $9.00. | |
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| | | | Re: Too expensive for low volume users said by burgerwars: With taxes, the $4.99 does add up to about $9.00. Wow! The Government must be one hell of a business where they can make a whopping 80% profit! | |
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| | | dvd536as Mr. Pink as they comePremium
join:2001-04-27
Phoenix, AZ
kudos:4 | Re: Too expensive for low volume users said by fifty nine:said by burgerwars: With taxes, the $4.99 does add up to about $9.00. Wow! The Government must be one hell of a business where they can make a whopping 80% profit! not all that is gov. there are unfees in there too.
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When I gez aju zavateh na nalechoo more new yonooz tonigh molinigh - Ken Lee | |
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| | What happened to ... All the lawsuits against them? They're going to have to pay those off at some point.
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This Space for Rent... | |
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| | Why I like ViaTalk Why I love ViaTalk $199 for the first 2 years, unlimited. Pay it once a year and forget it. Don't have to pay Vonage $2x.xx a month and get great service. | |
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|  jester121Premium
join:2003-08-09
Lake Zurich, IL | Re: Why I like ViaTalk Don't forget all the monthly fees and unfees that Viatalk will charge you each month, of course subject to change at whim or a moment's notice. | |
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| | | | Re: Why I like ViaTalk It's been under $3/month for the past year. So I can't complain even factoring that in. | |
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| | | jester121Premium
join:2003-08-09
Lake Zurich, IL | Re: Why I like ViaTalk Uh-huh -- but if you're going to post something like "$199 for the first 2 years, unlimited. Pay it once a year and forget it" it might be a good idea to mention the $3/month in extra fees. | |
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·ViaTalk
·AT&T Southeast
·VOIPo
| Re: Why I like ViaTalk They disclose all that in their terms of service for one. Two according to a recent article on CNET and PCMAG Viatalk is one of the only few VOIP service that doesn't have any hidden fees. Thats means they charge you according to the FCC rates. No hidden Viatalk (keep us in business) fees. Anyone who goes in thinking that they are going to get away with out paying taxes every month ought to be off their rocker.
What I hate is that no one mentions that Viatalk is the ONLY VOIP provider that will prorate a refund if you pay for that year up front. Trying getting that back from Vonage. | |
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| | Once was a HAPPY VoNaGe User. But---- I came to my senses and found Viatalk. They are even better with the BOGO deal that they run is so much a better alternative. With cheaper cost and just as good quality phone service you can't beat them. | |
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bac522
join:2003-08-04
Manchester, NH | They should first fire their marketing company! Those have to be the dumbest commercials ever! No one buys VoIP because of how clear it sounds...people expect that today with any phone service regardless of VoIP or POTs. What they need to do is attack the fact that they are cheaper even when customers go for high priced bundled cable service.
I dumbed Comcast voice for Phone Power and even though my monthly Internet went up because of it I still saved money in the long run by not using Blowcast voice! | |
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| rradina
join:2000-08-08
Chesterfield, MO | Re: They should first fire their marketing company! said by bac522:Those have to be the dumbest commercials ever! No one buys VoIP because of how clear it sounds...people expect that today with any phone service regardless of VoIP or POTs. (...snip...) People expect it but that doesn't mean the public impression of Vonage is that they provide it. Their market research must show the public believes Vonage or VOIP or cheap phone service doesn't sound as good.
Look at the recent Chevy commercials. It's a *duh* that 2008's $4/gallon gas made fuel efficiency more important to buyers. Apparently Chevy's market research shows the public believes they are behind Honda and Toyota. Their ads try to make the case that their cars are as efficient or more efficient than competitors. | |
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| fiberguyMy views are my own.Premium
join:2005-05-20
kudos:3 | said by bac522: No one buys VoIP because of how clear it sounds...people expect that today with any phone service regardless of VoIP or POTs. Hrmmm... I think you're wrong.. because *I* DO buy phone service based on the call clarity... after years of POTS service with static and crap on the line, I don't buy anything that's analog anymore.. period!
I don't think you represent, or even begin to really know WHY anyone buys what they do... so I'd try not to act as if you do.
... you're sitting here basically stating that people buy purely on price, which is about as true as Santa Clause comes in July. | |
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 PaulGo
join:2005-01-29
Gaithersburg, MD | Ooma Offers A Better Alternative The link is to Forbes not Fortune. I use Ooma for VOIP and I am very happy with the call quality. The only fees I pay is about $12 a year for taxes. | |
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| | | Re: Ooma Offers A Better Alternative I agree, Ooma is the best VoIP service for the least amount of money. I had Vonage for over 6 years, and switched to Ooma this past summer - and they are great!
If you want one line, it is basically $12 a year (taxes) and that is it. If you are like me and want the extra features (second line, emailed voicemail, etc), then you get the Premier - which is now $119 a year). Basically $10 a month for (2) lines and all the extra bells and whistles. I don't mind $10 a month for all that functionality.
- Mark | |
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| | Vonage I actually had Vonage for over a year a few years ago and it worked ok, though there were occasional audio blips from jitter etc. I can handle that if the unlimited international was actually unlimited. My wife is from Ecuador, and of course the Vonage unlimited does not cover Ecuador, but every other country surrounding it which makes it not worth the expense for me. I can accept that it might be Vonage is charged too much by Ecuadorian telco's, but I dont know if thats true or not. | |
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iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
·Verizon Online DSL
·RoadRunner Cable
·Comcast
| Local numbers Here in my smallish town (11,000 or so) none of the VoIP providers currently have local numbers except TWC, who charges $50 per month (less in a bundle) for their unlimited voice service. That may change soon, but until then for most people it's landline, TWC or cellular. | |
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elray
join:2000-12-16
Santa Monica, CA | Cable wins Cable Voice isn't Internet-dependent, so Vonage can never offer a true competing product. Time will tell if regulators rule cable voice is real telephone service, subject to the same insane taxes as landlines, in which case, Vonage could still compete on price.
Meanwhile, I've cut a dozen homes in the family to cable voice, against my instincts, and not regretted it one bit. Our local telcos just continue to disappoint. We've bought a few Vonage packages for the overseas kin - ATA-based dialtone works so much better than webcam + speakerphone + wifi silliness. But domestic use of Vonage has proven a joke, and was terminated long ago. | |
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| | Happy with vonage I guess partly because of the quality our internet (latency is always between 12-15ms) and bandwidth we've never really had a problem with our vonage. i go months without even thinking about it. Had them since August 2006. Great quality, cheaper price than the cable company. Good web dashboard for management of account features. I'm happy. | |
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| sam64
join:2006-07-31
Newtown, PA | Re: Happy with vonage Me too. I have had them since March 2009 as a secondary phone line into my house - much cheaper than the telco option.
Additionally, I am on their World Plan that includes unlimited calls to over 30 countries. I make a lot of calls to China, Malaysia, Thailand, India, UK and Canada. Even when you factor in the cheapest calling card type plans, Vonage actually saves me money without having to dial long strings of calling card numbers.
I have a low latency connection so quality is excellent. | |
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|  sivranOpera ex-patPremium
join:2003-09-15
Arlington, TX
kudos:1 | said by matt314159:I guess partly because of the quality our internet (latency is always between 12-15ms) and bandwidth .... That's the thing for me. I have a helluva lot more confidence in Southwestern Bell/SBC/AT&T/Whoever-comes-next's ability to provide me uninterrupted, clear service than I do @Home(RIP)/AT&T-cable/Comcast/TWC/Whoever-comes-next. My phone has had 100% uptime AFAIK (if it's ever been down, it's never been down long enough to notice), not so much for my internet. Not to mention I'd want a significant upstream boost before considering VOIP anyway.
Granted, there are people who have horrible landline service, but I have a feeling a lot of people, if they actually stopped to think about it for a minute, would feel the same way.
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In dadkins' memory, Think outside the Fox... | |
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| | Article was in Forbes, not Fortune. Link correct, body copy wrong. | |
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Google Voice will crush Vonage
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Happy Vonage user
