The irony being Vonage is that the company which played a pioneering role in popularizing the concept of VoIP in US and other countries of the world is now struggling for the survival.



We have already discussed about the company’s Q2 result, which recorded $74.1 million loss, customer churn 9.5 percent and 50 percent increase in market expenses.



Perhaps it is the only reason why Jeffrey Citron, the CEO of Vonage in his interview with New York Times appeared to be perplex but in good oration trying to hide the company’s dark sides and projected the plans for the coming days.



That Citron at once bought the first 100 shares with great expectation. However, the share value tumbled along with tens of thousands of other shareholders. The stock dropped 13 percent from the sale price that day. It never recovered.



It is mainly due to persistent competition pressure from big brands like Verizon, AT&T, Skype and other such companies. How? To lure the customers, Vonage had to bring down prices of its offers and incur market expenses. However, it could not get profit as the rivals outclassed Vonage in the market by offering cheap and best services.



Even smaller companies like SunRocket are also shacking up Vonage. For instance, SunRocket had raised $33 million in private financing. SunRocket provides unlimited phone service for $199 a year, or less than $17 a month compared with the $25 Vonage charges.



In his conversation with the New York Times, Citron admitted these things and explained his plans to overcome it.



Explaining Customer Care was the biggest issue, Citron has decided to take effective steps to bring down the churning rate. For which, the company would be appointing more customer service workers and train them better so they can solve problems the first time subscribers.



He explained that Vonage is also trying to push the capabilities of Internet calling by developing new products, particularly V-Phone.











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