Vonage Goes Wi-Fi

Today Vonage, a Voice over Internet Protocol (VoIP) provider, which serves both residential and small business customers, announced it would begin offering Wi-Fi service through an agreement with UTStarcom beginning this Spring.

While UTStarcom will provide the portable handset, Vonage will provide the broadband service so that users can have a portable phone service they can use at home, at the office or in a mobile capacity at Wi-Fi hotspots. This service would be a free add-on feature to current subscribers. Instead of plugging in a phone to their broadband line, subscribers can make the same calls on the mobile phone. (Subscribers would be required to purchase the handset, which is estimated to cost in the $100 range.)

While this move impacts traditional telcos and now wireless carriers, it also continues to throw a wrench into directory players business plans. With super low prices (unlimited local and long distance calling plans for small businesses at $49.99 month and unlimited calling plans for consumers under $25), both small businesses and consumers are increasingly signing on to services such as Vonage, which allows users to have virtual phone numbers. Currently, Vonage claims to have 400,000 subscribers. This causes a problem for directory players in a) obtaining listings, and b) seeking out advertising dollars from those small businesses. Moreover, it exacerbates the declining usage issue that print players are encountering.

While it seems like almost a non-issue at present due to fairly low penetration of VoIP, this will be an issue that will plague the directory industry over the next few years. How can it not be? With rock bottom prices for unlimited calling in the U.S. and Canada, small businesses have to look at this as an alternative.