http://www.markevanstech.com/2006/04/30/diggin-into-vonages-s-1/ Thoughts on Startups, Entrepreneurs and the Web Thu, 09 Feb 2012 17:25:18 +0000 hourly 1 http://wordpress.org/?v=3.3.1 http://www.markevanstech.com/2006/04/30/diggin-into-vonages-s-1/comment-page-1/#comment-1413 Anonymous Fri, 19 May 2006 23:32:45 +0000 http://markevanstech.com/?p=1486#comment-1413 Many people are now stopping their vonage service. I had used the service for over two years but could no longer deal with the lack of customer service, lies and deceit. Evan a well respected Voip blogger cancelled his service this month. Vonage added insult to injury when they said the plan would terminate at the end of the month and then disconnected the service in the next 30 minutes with 18 days left in the prepaid month. After waiting 45 minutes to get to customer does not care service they informed me that they do not prorate for cancelled accounts. When I asked them to show me where this is stated in their terms of service they could not find it but did find a statement in section 3.4 that states they will return your prorated payment if the disconnect your service without notice. They tried to explain that I disconnected it not them and my argument was that my service should continue for the period that I had pre-paid. Again, an ugly discussion with a deceitful company. Do not subscribe to the IPO or you will lose money. Many people are now stopping their vonage service. I had used the service for over two years but could no longer deal with the lack of customer service, lies and deceit. Evan a well respected Voip blogger cancelled his service this month. Vonage added insult to injury when they said the plan would terminate at the end of the month and then disconnected the service in the next 30 minutes with 18 days left in the prepaid month. After waiting 45 minutes to get to customer does not care service they informed me that they do not prorate for cancelled accounts. When I asked them to show me where this is stated in their terms of service they could not find it but did find a statement in section 3.4 that states they will return your prorated payment if the disconnect your service without notice. They tried to explain that I disconnected it not them and my argument was that my service should continue for the period that I had pre-paid. Again, an ugly discussion with a deceitful company. Do not subscribe to the IPO or you will lose money.

]]> http://www.markevanstech.com/2006/04/30/diggin-into-vonages-s-1/comment-page-1/#comment-1412 Anonymous Sun, 30 Apr 2006 22:03:09 +0000 http://markevanstech.com/?p=1486#comment-1412 The cost of acquisition (based on equipment subsidies, retail payments and advertising -- it excludes in-house marketing staff) was $99M or $234 per gross addition. Of this amount, $22M was spent replacing the 94k subscribers who churned during the first quarter -- in other words, even if they decided to drastically cut spending and stop net subscriber growth, Vonage might be marginally profitable on an EBITDA basis. They may yet grow to sufficient scale that the business because a significant cash generator, but they aren't there yet. If 1.5M customers are not enough, and competition is increasing, the situation doesn't look great. The cost of acquisition (based on equipment subsidies, retail payments and advertising — it excludes in-house marketing staff) was $99M or $234 per gross addition. Of this amount, $22M was spent replacing the 94k subscribers who churned during the first quarter — in other words, even if they decided to drastically cut spending and stop net subscriber growth, Vonage might be marginally profitable on an EBITDA basis.
They may yet grow to sufficient scale that the business because a significant cash generator, but they aren't there yet. If 1.5M customers are not enough, and competition is increasing, the situation doesn't look great.

]]> http://www.markevanstech.com/2006/04/30/diggin-into-vonages-s-1/comment-page-1/#comment-1411 Anonymous Sun, 30 Apr 2006 20:48:30 +0000 http://markevanstech.com/?p=1486#comment-1411 MarK: Does Vonage list the number of new accounts added during the previous quarter? We could calculate a customer acquisition cost number from that. A churn number would be interesting, too. With that and the number above we could calculate a customer lifetime value number. MarK:
Does Vonage list the number of new accounts added during the previous quarter? We could calculate a customer acquisition cost number from that. A churn number would be interesting, too. With that and the number above we could calculate a customer lifetime value number.

]]> http://www.markevanstech.com/2006/04/30/diggin-into-vonages-s-1/comment-page-1/#comment-1410 Anonymous Sun, 30 Apr 2006 19:58:14 +0000 http://markevanstech.com/?p=1486#comment-1410 Again, With the greatest respect. This is virgin territory, how do you know how much to spend if you are changing the market. I certainly would not model my self agians tthe Wireless or RBOC providers. Momentum stock for sure. My guess is they float 20% of the company continue to add customers and then at some point get acquired. The real question is if they don;t go public in May or by Mid-June they will have to wait until October as bankers typcially holiday late June through labor day. Not sure they have enough cushion cash to wait. They may slow down marketing expenses to save cash for the fall. When do you think they will float the IPO? Again,
With the greatest respect. This is virgin territory, how do you know how much to spend if you are changing the market. I certainly would not model my self agians tthe Wireless or RBOC providers.
Momentum stock for sure. My guess is they float 20% of the company continue to add customers and then at some point get acquired.
The real question is if they don;t go public in May or by Mid-June they will have to wait until October as bankers typcially holiday late June through labor day.
Not sure they have enough cushion cash to wait. They may slow down marketing expenses to save cash for the fall.
When do you think they will float the IPO?

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