Snyder quits Vonage as group looks to shore up business

13 Apr 2007

Vonage chief executive Mike Snyder has announced his resignation from the struggling IP telephony provider, as the US-based group unveiled details of a cost-cutting programme designed to bolster its business following its bruising patent battle with Verizon Communications. Vonage chairman Jeffrey Citron will take over from Snyder in the interim while the company hunts for a permanent replacement. No reason was given for Snyder’s departure although Citron noted that a push to attract new subscribers had failed to meet company expectations. The loss-making firm gave a preliminary estimate for revenue of USD195 million in Q1 2007 and said it added 166,000 net subscriber lines, well below market expectations. Moreover, the company is incurring significant costs to acquire new customers and said its average marketing cost per gross subscriber addition was USD275 during the period.

Vonage is experiencing a period of upheaval. It faces a ban on signing up new users following a court ruling last month that it had infringed patents held by Verizon. It has appealed the ban, but its hearing has been temporarily suspended and is now expected to take place next week. Vonage remains confident it will emerge successful from the case and says it is also working on a technology solution to work round the problem should its appeal fail.

United States