CEO Citron: Vonage Will Rebound During 2008

LAS VEGAS — After a year of punishing legal suits, Vonage entered 2008 pinning its hopes on a line of products and technologies to promote "communication without boundaries," according to chairman/CEO Jeffrey Citron.

More than just a financial blow, Citron asserted that the lawsuits by Verizon, Sprint, AT&T and others were an effort to hobble the company in the court and not the open market. "They are trying to win over courtrooms, not customers," he claimed.

Consumers should have confidence that Vonage would not follow SunRocket into VoIP oblivion because it ended the year with $190 million in cash and more than 2.5 million customers, he said. "We've got our customer acquisition costs down to the lowest they've been since 2005 and we're generating positive operating income."

More importantly, Citron said, "we have critical mass, and critical mass in this business is measured in the millions" of subscribers.

Keeping those customers is a top priority for 2008. Citron admitted he was "not happy" with the current churn rate of 3 percent. "We need to do a better job of resolving customer complaints when they first come in," he said.

The company will also focus in on the business customer in 2008, with a series of product packages designed for small businesses with five to 25 employees, he said. "Many of our calling features, like group calling, make sense for the business user," he said.

Retail will continue to play a role in customer acquisition, Citron noted. The in-store activation business currently running in select stores will evolve from a self-service model to salesperson-driven model.