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Vonage Maintains VoIP Customer Base, But Growth Stagnates

6:00 am on August 11, 2008 | Category: Business, Telecom Services, Telephone, VoIP

Vonage Holdings Corp., a struggling pioneer of VoIP telephony, experienced almost no subscriber growth in the second quarter, adding a net total of just 2,000 customers.

Marc Lefar, the CEO of Vonage, said that the lower customer acquisitions was due to a reduction in the company’s TV advertising budget. He noted, however, that Vonage is doing a good job of holding on to its existing customer base.

Vonage lost $6.9 million ($0.04/share) in the second quarter, compared with a loss of $23.2 million ($0.15/share) in the same period a year earlier. Second-quarter revenue came in at $228 million, an increase of 11% from last year.

The Holmdel, New Jersey-based VoIP carrier finished the month of June with 2.6 million customers, up from 2.5 million in June 2007, despite a number of high-profile legal battles which caused analysts to question the company’s future prospects.

Vonage is now focusing much of its efforts on improving customer service, in an attempt to reduce churn (that is, the number of subscribers abandoning the service each quarter) and improve customer satisfaction.

“We’re pleased with some of the progress we’ve seen on churn,” Lefar said, noting that “we still have a ton of work to do there.”

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