Is Vonage in Real trouble??
In the past 6 months Vonage has lost two patent infringement lawsuits. The first in March of this year Vonage was ordered to pay Verizon $58 million plus 5.5% of any future revenue. The second was today with them being ordered to pay Sprint Nextel $69.5 million as well as 5% of any future revenues. Shares of Vonage holdings Corp plummeted by over 30% on the news.
Vonage said in a written statement that it would appeal the decision but also would begin developing workarounds so it won’t need to use the disputed technology.
“We are disappointed that the jury did not recognize that our technology differs from that of Sprint’s patents,” said Sharon O’Leary, chief legal officer for Vonage. “Our top priority is to provide high-quality, reliable digital phone service to our customers.”
Vonage have the money to pay but the bigger issue is the 10% of lost future revenue. It is going to be extremely difficult for them to invest in technology and push VoIP further into the mainstream. So what does this mean for existing customers – probably nothing for now. Vonage certainly are not going to disappear overnight and customers are not going to loose their service, however without the required investment it’s difficult to see Vonage continue to grow and add to its customer base. They are starting to look cheap now for a take over by the likes of Verizon who could pick up a couple of million customers for not a lot.
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