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Vonage Struggles to Keep Up with Comcast in American VoIP Market

7:00 am on May 14, 2007 | Category: Business, Telecom Services, Telephone, VoIP

Broadband phone provider, Vonage, announced a good increase in first-quarter revenue last week, and revealed that it had further narrowed its losses for the period. Subscriber growth, however, continued to spiral downwards, painting a bleak long-term picture for the VoIP pioneer.

Vonage added just 166,000 new customers in its most recent quarter, a decline of almost 50% from Q1/2006, when it was able to sign-up 328,000 users. This decline is largely being attributed to uncertainty surrounding the ongoing patent battle between Vonage and Verizon, as well as increased competition in the VoIP sector.

Big U.S. cable companies like Time Warner, Cablevision, and perhaps most notably of all, Comcast, have swooped in to dominate the digital voice sector over the past couple of years with VoIP services that offer unlimited long distance calling for a fixed monthly fee.

Comcast alone added 571,000 new digital phone customers in the first quarter, more than tripling Vonage’s total, and making it America’s largest VoIP provider for the first time.

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