Vonage stems the tide and gets onboard with Covad

9 May 2008

US VoIP provider Vonage reported a first quarter net loss of USD9 million, compared to a loss of USD72 million a year ago. Revenue grew to USD225 million in the three months ended 31 March 2008, up 15% from USD196 million in the first quarter of 2007. Excluding charges, operating income was USD8 million. The company claims its improved performance is due to an increase in subscriber lines and higher average revenue per user (ARPU). Vonage added 30,000 net subscriber lines in the first quarter and had over 2.6 million total lines in service by the begining of April. First quarter monthly ARPU reached USD28.85, up from USD28.19 in the fourth quarter of 2007.

Vonage also announced a new partnership with broadband provider Covad to offer a DSL service to residential and small business customers offering maximum download speeds of 3Mbps to 6Mbps under a new package called Vonage Broadband. Vonage is hoping that the service, which will run on Covad’s DSL network, and enable it to offer a ‘double-play’ package of VoIP phone service and broadband internet access in a single plan, will help boost its number of lines in service. The addition of 30,000 new subscribers in the first quarter of 2008 is down from 56,000 in the previous quarter and well below the 160,000 signed up in the same quarter a year ago. Overall, the company is still losing customers, with a churn rate of 3.3% per month.

United States, Covad Communications