September 7th, 2005
Vonage: we have one million lines; bloggers: so?
Yesterday, Vonage announced that it had exceeded one million "installed lines" in North America.
The "lines" part seems to be perplexing at least a few of my fellow bloggers. Some seem to wish for more clarity on whether "lines" is just another word for "subscribers"- or if the difference is more than just that of semantics.
"This is a vague choice of words," Tom Keating writes. "When I link of ‘lines’ I think of trunk lines or at least physical lines and not customers. It’s doubtful Vonage truly has 1 million physical ‘lines’ into their facility. I’m going to assume they meant 1 million customers."
But then again, maybe not.
"Or, perhaps they did mean 1 million trunk lines for outbound PSTN (Public Switched Telephone Network) That doesn’t make much sense since the average inactive vs. active calls for residential concurrent phone usage is probably 12-to-1," Tom writes. "Thus, that would mean Vonage has 12 million customers for 1 million physical ‘trunk lines’, but there is no way they have 12 million customers."
You know, Tom has a point.
Other bloggers are saying, in effect, that the "one million" is just a number.
"Holy Cow-Batman–Today Vonage said they have one million lines in service," Andy Abramson writes. "Given how many Time Warner Cable now has, (Russ here: 614,000 as of June 30, I reported) I’d say the Jersey boys are feeling the heat from the Gotham sleeping giant..
"It still doesn’t ensure a great IPO, or a great exit via sale to some greater fool," writes Om Malik of the one-million whatever milestone. "And it also doesn’t mean that cable companies are not going to eat their lunch and dinner."
And then in his new post, Vonage’s Newest Milestone, Mark Evans implies that’s what important is not that Vonage has reached a million lines, but what the cost has been to acquire these customers, how much additional revenue they will generate per sub, and how long they stay with the service.
And in this post, I say that Tom, Andy, Om and Mark are all correct.
Russell Shaw is an enterprise computing journalist, analyst and author based in Portland, Oregon. See his full profile and disclosure of his industry affiliations.
