Vonage Announces $250 million IPO

Rumors about a possible Vonage IPO (Initial Public Offering) have been circulating for months.  Today, those rumors were laid to rest when Vonage announced news of a $250 million IPO.

Ebay’s recent acquisition of Skype late last year only added fuel to the rumors.  VoIP, or Voice Over IP, is the latest “in” technology and its not a fad.  Millions of VoIP users including myself, have been saving hundreds of dollars a year with the technology.  Vonage currently leads its competitors with just over 1 million subscribers.  AT&T, Comcast, and others have recently started offering their own VoIP service but Vonage has taken to the forefront with its aggressive market campaign and lower prices.

For those who are unfamiliar, VoIP technology is essentially a replacement for the traditional phone line.  Rather than running the phone signal out of your home and into telephone lines that crisscross the country, digital voice adapters attach to a home’s phone line and channel the phone signal digitally over broadband internet connections.  The phone signal then traverses the internet until the signal is later converted back into an analog signal and then fed back into a standard phone network.  The advantage of this is generally a substantial cost savings.

The person on the other end of the call does not need to have a Vonage account and does not need to be using VoIP.  Vonage offers US customers unlimited calling to anywhere in the US, Canada, and Puerto Rico for only $24.99 a month.  If the person on the other end of the call is using a Vonage line, the call is considered “in network.”  In Network calls between Vonage customers are free, anywhere in the world.

With major carriers like Comcast and AT&T rolling out VoIP service as fast as possible, one this seem clear… VoIP is the future of phone service.  And though there is increased competition with some very big name corporations, Vonage has still managed to grow dramatically while still undercutting its competition’s prices.

Check out these links for more information on the IPO announcement:


Steve

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