Vonage Company Brief

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Company Brief

by Faulkner Staff

Docid: 00018838

Publication Date: 2108

Report Type: VENDOR


Traditionally, Vonage, which was founded in 2001, has served as a low-cost provider of IP telephony
services in the US, Canada, and the UK. Vonage’s national and international price plans
often undercut rival carriers, with its VoIP services competing against free offerings
from Microsoft’s Skype, Google, and others, as well as wireless-only plans. In
more recent times, under new CEO Rory Read, the company has entered into a
strategic review with an emphasis on providing SaaS (Software-as-a-Service)
options. As a result, its revamped portfolio now focuses largely on
communications APIs, UC (unified communications), and contact centers. After
considering the possibility of selling its consumer business, CEO
Read announced in early 2021 a decision to retain the operations. This brief examines Vonage’s operations in greater

Report Contents:

Fast Facts

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Name: Vonage
23 Main St
Holmdel, NJ 07733
Phone: 732-528-2600
(855) 472-1895


Type of Vendor: Broadband VoIP provider
Founded: 2001
Number of Employees:
2,356 (2020)
Service Areas: US, Canada, UK
Stock Symbol: VG (Nasdaq)


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Vonage was founded in 2001 by Internet phone
pioneer Jeff Pulver. The company provides IP telephony services over broadband
to millions of consumer subscriber line and business seat users, the majority of
which US-based. Vonage also touts:

  • A roster of 900,000+ registered developers
  • 236 US patents (plus 71 worldwide)
  • 25 billion minutes and messages terminated annually
  • More than 100,000 business customers
  • Additional operations in Canada and the UK

To reach broadband customers, Vonage’s local, long distance,
and international Voice-over-Internet-Protocol (VoIP) phone services
cross the
networks of cable and telecom providers. The company also
partners with US and international retailers to resell VoIP services in
areas with high broadband
penetration rates. Vonage also offers low-cost calling applications
for smartphones
that use Wi-Fi or wireless data plans. The company’s services took off
quickly. After a 2001 round of financing, Vonage introduced
its digital
voice calling service in 2002. The SIP-based service launched unlimited local and long distance calling for
$39.99 per month. By August, the company completed its one millionth
call over the SIP
network. Vonage also released a wholesale service package targeting
RBOCs, cable operators, and ISPs. By 2005, the company reached 500,000
active lines, and in 2006 it began
trading on the NYSE for $17 per share, falling 10 percent on the first

Vonage is continually seeking ways to attract users as subscriber lines drop
customers leave for bundled or wireless-only services. This strategy includes an increased
presence in retail stores. Vonage’s strategy has always been to make the most of its best feature: low-cost VoIP
calling in a time when consumers are looking to cut costs, especially phone
bills. To increase falling revenues, Vonage shifted its marketing strategy
away from national services to international, an area in which it was able to
offer lower rates
than those of many of its rivals. Recently, the company has shifted its focus to the growing
number of ethnically diverse individuals in the US who frequently
call international destinations. Low-end services in the US also continue to
make up a large part of the company’s revenue stream.

In 2020, Vonage ushered in a new era with former Dell executive Rory Read
being appointed the new Vonage
CEO. Read immediately began a lengthy, strategic review
of the company’s consumer segment to align it with the newer company vision of
becoming a "world-class business SaaS company."

Key Executives

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Vonage’s key executives include:

  • Rory Read

    – Chief Executive Officer
  • Jeffrey Citron – Chairman
  • Stephen Lasher – Chief Financial Officer
  • Jay Bellissimo – Chief Operating Officer
  • Savinay Berry
    – Executive Vice President, Product & Engineering

  • Joy Corso

    – Chief Marketing Officer
  • Randy Rutherford – Chief Legal Officer & Secretary
  • Sue Quackenbush – Chief Human Resources Officer
  • Rodolpho Cardenuto – President, Applications Group
  • Vinod Lala – Chief Strategy Officer
  • Sanjay Macwan – Chief Information Officer & Chief
    Information Security Officer
  • David Levi – Senior Vice President, Controller & Principal Accounting Officer

Major Products

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Vonage offers business and consumer services. The Vonage network uses customers’ existing high-speed broadband Internet
service to allow calls over the Internet using either a standard telephone
through a Vonage-enabled device or through softphone software or mobile client
applications. Its consumer and business services are not dependent on
any specific type or provider of Internet service, and its customers are free to
change ISPs. In addition, UC services are delivered over the company’s private,
nationwide, high-quality IP MPLS network under multi-year contracts. The company
also offers the Nexmo cloud-based communications platform.

Table 1 lists Vonage’s core services.

Table 1. Core Services
Product Description
Communications APIs
  • Communications APIs
  • Use-Case APIs
  • Management APIs
  • Programmable Numbers
Unified Communications
  • Cloud Communications Platform
Contact Centers
  • Cloud-Based Contact Center Software
  • Vonage Contact Center
  • Express and Elevate Contact Centers

Major Competitors

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Vonage competes with traditional telephone and cable companies; wireless
service providers; and alternative communications services providers in the
consumer, mobile, SMB, and enterprise-targeted markets.

Recent Activity

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Past-year Vonage activity of note has included:

In October 2020, Vonage was chosen by industry-leading education technology provider Top Hat to embed programmable video capabilities into its active learning platform for higher education. With the massive shift to online learning as a result of COVID-19 pandemic restrictions, Top Hat has been working with educators to provide interactive, relatable course material for the more than three million students who use their software. The Vonage Video API, enables educators to keep students engaged with real-time video lecture streaming and access to recordings of class meetings, facilitating improved connections and learning experiences inside and outside the virtual classroom.

The Vonage Video API was also chosen by Australia’s Feros Care’s Virtual Social Centre to provide aged care and disability support provider Feros Care with video telehealth solutions to its. The API enables the non-profit to conduct real-time live-streamed events seven days a week across the country.

In January 2021, announced the appointments of Stephen Lasher as chief financial officer and Jay Bellissimo
as chief operating officer. Both are former IBM executives: Lasher was vice
president of finance for IBM Global Markets and Integrated Accounts while Bellissimo was general manager of IBM US Public and Federal Market with responsibility for healthcare and life sciences, government and education, and defense and intelligence. Both will report directly to CEO Rory Read.

In February, Vonage became a member of the OpenAPI Initiative, a consortium focused on creating, evolving, and promoting the OpenAPI Specification (OAS). As a part of its OpenAPI membership, Vonage representatives will also join the OpenAPI Business Governance Board and Technical Steering Committee.

Vonage released fiscal year 2020 results in February, reporting that Communication Platform revenues grew by 14 percent to $915 million, while service revenues were $856 million, a 19 percent increase. API Platform Revenues grew 35 percent,
and revenue from the Unified Communications and Contact Center operations grew seven percent. While consumer revenues were down 14 percent for the year to $333 million, CEO Rory Read announced that after a comprehensive nine-month strategic review of the consumer business, it would terminate the sale process and retain the business. “Our decision was driven by valuation, the $600 million of cash generation we expect from Consumer over the next five years, and what is best for our company and shareholders. This business is run efficiently and without distraction.”

Appointed Stephen M. Ward, Jr. to the company’s Board of Directors in June 2021. Ward is a member of the founding team of C3.ai, a leading developer of artificial intelligence enterprise platforms, and retired president and chief executive officer for Lenovo Group Limited.


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