I am a big believer in the fact that Vonage spends too much money on advertising. My thoughts are they are that they can cut down their expense without significantly reducung subscriber additions. But with VoIP growing at 22% and the intense competition coming from cablecos, the New Jersey based pure-play VoIP company is obviously trying to gain as much share as it can.
Some of the numbers coming from this recent VoIP market research report are staggering. For example VoIP revenues for the second quarter were up 173% at $607 million across the United States, compared with a year-ago level of $221 million.
In all there is tremendous opportunity to generate new VoIP customers but competition will remain fierce. In addition the cable companies don’t have the marketing expense of a pure-play VoIP company as they can sell remnant ad space on their TV networks.
With so much pressure on Vonage’s stock price the company will likely have to change strategy soon. The question is what are the options?
Blogged via wireless handheld