Everyone's favourite whipping VoIP whipping boy, Vonage, posted third-quarter results that left a lot to be desired. Churn climbed to 2.6% from 2.3% in the second quarter, the cost of acquiring a new customer rose to $254 from $239, while the number of net new subscribers was 205,000 compared with 256,000 in Q2. While the company had a smaller loss ($62-million) than analysts expected, the investment community was disappointed with guidance of 2.2 million to 2.3 million new users in 2006, compared with a previous estimate of 2.3 million to 2.4 million. The company now has 2.05 million customers, compared with 1.85 million at the end of Q2 and 1.06 million a year earlier. Vonage shares were down 1% in early-morning trading to $6.80 (compared with the 52-week low of $6.30). The question facing investors is whether Vonage can gain enough critical mass and reduce marketing/acquisition costs so it can compete with the cablecos, which are aggressively gaining market share.
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Vonage's Q3: Trick or Treat?
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