Their CEO, Bill Rainey, and VP of Marketing, Joe Parent did the talking, and despite all the gloom and doom around their parent, they did have some positive messages to share.
Not surprisingly, there were no subscriber stats, but they did say that their headcount has ramped up to 120 now, and anticipate hitting 200 by year end. Much of that is for their call center, which is based in their head office just outside the city. With Toronto being so cosmopolitan, it wasn't surprising to hear their agents can handle calls in 16 languages. I have no idea how many languages Vonage U.S. can support, but I would't be surprised if it's less. Still, that's a lot of languages, and it speaks to me as a commitment to serving customers, especially for a company that's not even 2 years old.
Other takeaways of note.....
- Out of competitive necessity, Vonage Canada seems to have developed a clear positioning strategy - if you can't be the biggest, you can still be the best. That works for me. As I profess, small can be beautiful, and no matter what the big guys do, Vonage can still be the best at what they do if they maintain their focus. So, what will they be the best at? Simple - as Bill explained, "best of breed" phone service. For Vonage Canada, it's all about choice - let the consumer pick the service that's best for them, and for Vonage to get their business, they need a strong value proposition. This has a very populist ring to it, and on this level, Vonage will find its following, being the "champion for the consumer and small business". Someone has to stand up to the ILECs and provide choice, and they see themselves as the ones to carry that mantle. Of course there are others doing the same, but this was Vonage's show, so we're hearing their story. Nobody will begrudge the message if they believe in competition, right?
- To succeed as best of breed, Vonage has to compete with the bundle. They can't truly do that, so they're taking the 7 Up approach of being the "anti-bundle" - like being the Uncola - remember that? Bill distinguished between and IP bundle and a billing bundle, and there is merit to this. He sees the Triple Play type bundle being created by the operators to suit their needs, built around efficiencies in billing. It's not a natural combination that consumers are crying out for. Consumers will save some money, but Bill argues that carriers will become complacent and innovation will suffer. Yup - I can see that happening. Instead, Vonage Canada will focus on the IP bundle - bundling what comes naturally to customers - the V Phone, their soft phone, their WiFI phone, etc. Their bundle is all built around voice services - which is what people go to Vonage for. Not TV, and not broadband. That's how they will make the value proposition strong. Just do voice, do it really well, and give the customer value. No doubt it's tough to compete against the alluring convenience of the Triple Play, and Vonage has to work with what is available to them. Ultimately, I'm sure there's room for both approaches, so for Vonage, it's all about execution, and making that IP bundle really attractive and accessible.
- Joe Parent did a nice job outlining the challenge of competing in Canada. It's hard enough going up against incumbents who have so much market power for subscribers. On top of that, however, many of their competitors also control media assets like television stations, newspapers, radio stations and web portals. To a large extent, Vonage Canada is shut out from these channels, which are vital advertising outlets for reaching their target market. It was noted that Vonage U.S. advertises heavily on MSN, but in Canada, MSN partners with Bell Sympatico - and as such, are shut out from advertising on Canada's largest Internet portal. So, say what you want about Vonage's heavy spending on marketing to acquire customers. Nothing new there, and really, it's a cost of doing business - and it must come down over time to be sustainable. That aside, Joe's comments provides a greater appreciation of the realities of competing in Canada. All the money in the world doesn't change the fact that they have limited options for mass marketing to attract customers. So, by definition, they have to be that much more creative to either find or create routes to market. Somehow, I don't think Vonage U.S. would be approaching 2 million subs if they had to compete in this environment. Of course, this isn't just a Vonage problem - it holds for all the other VoIP pureplays fighting for business up here. On that level, this perspective gives one pause for thought about bigger issues like media concentration and what the definition of market power really means in Canada.
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