Wednesday, February 08, 2006

The Trouble With VoIP

Scott Woolley writes on

Is running an Internet phone company a good business?

Vonage Holdings, the largest Internet phone company in the U.S., aims to convince investors it is, announcing plans today to go public and raise up to $250 million. At the same time, its prospectus provides a trove of new information about the financial struggles of a phone company that relies on the Internet instead of its own network to provide phone service.

In the three years and three months since Vonage began offering service, it has proved widely popular--and wildly unprofitable. Over 1.4 million customers have signed up; its subscriber rolls more than tripled last year alone. Cumulative losses over the company's brief life: $310 million.

More here.


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