VoIP Blog - Tehrani.com

April 7, 2007

Apparently the IP communications market never stops working as a number of people have sent me links to my quotes from various newspapers and websites this weekend. So far I have blogged about being quoted in the Chicago Tribune, San Jose Mercury News, Los Angeles Times and The St. Louis Post-Dispatch.

 

It seems some of these articles were picked up in other newspapers such as the Nashua Telegraph and Baltimore Sun. I actually was interviewed by a bunch of other reporters yesterday as well. Hopefully these articles will hit soon as well.

 

The Vonage patent courtroom adventure has certainly been something the mainstream press has covered well but one can’t help but wonder if it will do any damage in the long term to Vonage or other VoIP providers.

 

Will the perception of VoIP now be tarnished to the point where customers no longer even want to buy IP communications from Verizon?

 

The answer is likely that memories are short and if the Verizon patent lawsuit goes away soon and the Sprint patent lawsuit (yes there is yet another one of these coming soon) disappears quickly, Vonage and others will not see long-term effects.

 

We can also look at Blackberry as an example of people continuing to purchase this product/service combination after the threat of a network shutdown (see Top 8 Things to do if Blackberry Gets Shut Down).

 

Perhaps just as importantly is whether this is the start of major VoIP patent wars where Verizon will end up spending more money on defending their own technology than they previously thought?

 

One reporter asked me yesterday why there are so many patent suits coming down the pike. This question was likely prompted by me telling him that lately I have been repeatedly asked to be an expert witness in the VoIP and IP communications market.

 

The truth is I am not sure why the time is now to sue over IP communications and other technologies but I believe it may have to do with the NTP vs. RIM patent lawsuit which was settled for over 600 million dollars.

 

This is a nice chunk of change to pick up due to a patent. I don’t even think Powerball goes that high. ;)

 

But regardless of what has prompted this change, it looks like we will have to get used to seeing companies who use their patent portfolios as weapons. Just as importantly it seems companies will have to earmark more of their budgets towards patent applications.

 

I don’t think this is a good thing but it is without a doubt inevitable based on what we are seeing happening in the technology market. Let’s just hope this new trend does not stifle innovation from smaller companies who cannot afford to hoard patents as they grow.

April 7, 2007

I was quoted in today’s edition of the St. Louis Post-Dispatch regarding the Verizon Vs. Vonage case. As you can likely tell I had a busy day yesterday and I received quite a few calls from reporters regarding this issue. I already blogged about the Chicago Tribune, San Jose Mercury News and Los Angeles Times quotes.

 

The article in the St. Louis Post-Dispatch is from Tim Logan who did a great job with his story titled Vonage will have to hang up on new customers, judge rules.

 

When I spoke with Tim, the court had just ordered Vonage to stop accepting new customers. After this interview however the company won a temporary stay of the federal judge’s ruling.

 

 

Charter, for instance, has begun offering free same- or next-day phone installation to all Vonage customers.

"Concerned Vonage customers have been calling Charter over the past several weeks," Charter Telephone senior vice president Ted Schremp said in a statement. "Having reliable home phone service is important to them."

Charter has been trying to build its telephone service and in February topped 500,000 customers. It is one of several cable TV companies moving heavily into the phone business and gobbling up bigger shares of the market.

It's likely that some customers will flee Vonage, said telecom analyst Rich Tehrani, president of Technology Marketing Corp. of Norwalk, Conn. But, he said, there's no reason to panic.

"I can't imagine an overnight scenario where 2.2 million people wake up and have no phone service," he said.

Still, many industry-watchers have soured on long-term prospects for the company, which never has turned a profit and needs fast growth to do so. One analyst, Citigroup's Michael Rollins, said this week that Vonage may go bankrupt by 2009. And after last month's verdict, it owes Verizon 5.5 percent of revenue it earns under the contested patents.

Vonage could not say how many customers it has in the St. Louis area. But one customer said Friday that he hopes the company pulls through.

"It's imperative they continue to grow for them to be viable in the long term," said Rich Tehrani, head of Technology Marketing Corp., which publishes the trade magazine Telephony.

Vonage already is losing 55,000 customers a month but has used its heavy marketing to attract more new customers than it lost.

April 7, 2007

I was quoted in today’s edition of the Los Angeles Times regarding the Verizon Vs. Vonage case. I had a busy day yesterday and I received quite a few calls from reporters regarding this issue. I already blogged about the Chicago Tribune and San Jose Mercury News quotes.

 

The article in the LA Times is from seasoned IP communications reporter Jim Granelli and is titled Temporary help for ailing Vonage. There is also another article in the LA times which is similar but with the same quote titled Vonage receives emergency stay in patents case.

 

When I spoke with Jim, the court had just ordered Vonage to stop accepting new customers. After this interview however the company won a temporary stay of the federal judge’s ruling.

 

 

Some industry experts, although pessimistic about Vonage's future, weren't ready to bury the company.

"It's not as bad as the worst-case scenario — no stay at all, which would have closed them down — but it's still dire," said Clayton Moran, an analyst at Stanford Group.

Money-losing Vonage has been spending huge amounts on advertising and marketing to attract new customers, a strategy aimed at helping it reach its goal of becoming profitable by early next year.

"It's imperative they continue to grow for them to be viable in the long term," said Rich Tehrani, head of Technology Marketing Corp., which publishes the trade magazine Telephony.

Vonage already is losing 55,000 customers a month but has used its heavy marketing to attract more new customers than it lost.

April 7, 2007

I was quoted in today’s edition of the San Jose Mercury News regarding the Verizon Vs. Vonage case. I had a busy day yesterday and I received quite a few calls from reporters regarding this issue. I already blogged about the Chicago Tribune quote.

 

The article in the San Jose Mercury by Steve Johnson is titled Crippling Blow to Vonage on Hold.

 

When I spoke with Steve, the court ordered Vonage to stop accepting new customers. After this interview however the company won a temporary stay of the federal judge’s ruling.

 

Here is my quote:

 

Some experts who track Internet phone companies agreed that Vonage could be in dire straits if it is prohibited from signing new customers.

 

"It's not very good for their bottom line," said Rich Tehrani, president of Technology Marketing, a Connecticut company that promotes Internet phone service. "If you're not able to get those customers back, it makes life difficult."

That assessment was shared by Rebecca Arbogast, an analyst with investment bank Stifel Nicolaus, who owns no stock in Vonage or Verizon.

 

"Today is a bad day for Vonage," she said shortly after the judge's decision. "And it's coming after a series of bad days. But it's not like every door is closed to them. They definitely have ample capital to keep on providing services," though she added it's unclear how long Vonage could operate without new customers.

Vonage had nearly $500 million in cash and short-term securities at the end of last year, according to the most recent financial statement it has filed with the Securities and Exchange Commission

April 7, 2007

I was quoted in today’s edition of the Chicago Tribune regarding the Verizon Vs. Vonage case. The article by Jon Van is well written and explains the situation well. When I spoke with Jon, the court ordered Vonage to stop accepting new customers. After this interview however the company won a temporary stay of the federal judge’s ruling.

 

This is the article where I was quoted:

 

 

Here is my quote:

 

"What this shows is that Vonage has gotten big enough to be a threat," said Rich Tehrani, editor in chief of Technology Marketing Corp., which publishes Internet Telephony.

 

"That's what Verizon is showing us. This is one way to compete, through patent litigation.

"The hidden challenge to Verizon is that by crippling Vonage, they may strengthen the cable companies, which are doing more damage to the phone companies with VoIP than Vonage is. What Verizon might be doing is cutting off its nose to spite its face."