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Vonage Article

America's Network

from www.americasnetwork.com

Internet Phone Service Vonage Hits 155,000 Users

May 17, 2004 Reuters

WASHINGTON (Reuters) - Vonage, which provides phone service over high-speed Internet lines, said on Monday it had hit the 155,000 customers mark and was adding more than 20,000 users a month.

The company, which reached 100,000 users in February, also said it was lowering the price of its unlimited calling plan for new and existing residential customers to $30 from $35.

Vonage is the largest retail provider of so-called voice over Internet protocol, or VOIP, which allows low-cost phone calls over high-speed Internet connections. Vonage has set a target of garnering 250,000 customers by the end of this year and is expanding internationally.

Vonage Chairman and Chief Executive Jeffrey Citron said the company had hit an "inflection point," where its growing base of users had allowed it to lower costs and pass some savings to customers.

The market for phone service over broadband Internet connections has been heating up in recent months, as larger firms such as AT&T Corp. (T.N: Quote, Profile, Research) and Verizon Communications Inc. (VZ.N: Quote, Profile, Research) stake their claims in a business that smaller companies like Vonage have had mostly to themselves until now.

AT&T began rolling out its CallVantage service two months ago, and Verizon is expected to unveil its VOIP offering by June.

While some analysts have suggested Vonage was at a disadvantage against much larger competitors, Citron said the company could compete effectively against players such as cable companies or local telephone carriers through better marketing and prices. Last week, RadioShack announced it would sell Vonage service in 4,000 of its stores.