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Vonage Taps Motorola As Equipment Supplier

Internet phone service provider Vonage tapped Motorola as its new equipment supplier, dropping previous supplier Cisco.

As part of the new relationship, Motorola will supply Vonage with the Motorola VT1000v Multi Terminal Adapter (MTA) for use in Vonage’s self-install VoIP telephony service.

The MTA plugs into a cable modem’s Ethernet port and into a home phone jack to enable VoIP telephony across Vonage’s network. Once the MTA is connected to both a home phone jack and the cable modem, consumers can place VoIP phone calls across their broadband internet connection using their existing home phones.

Vonage, which sells its VoIP telephony service through retail and directly on its Web site, will ship Vonage/ Motorola-branded MTAs this month as part of its Digital Phone Service self-install kit. Suggested retail of the package was not available.

The company estimates that roughly 30 percent of its sales will come through retail in 2004. According to a company spokesman, each retailer receives a commission on the sale of the retail kit and activation of a Vonage account, and a residual varying by the type and overall volume of the retailer.

Vonage has over 75,000 active lines throughout the country, and says it is adding 2,500 lines a week to its network. The Motorola partnership came on the heels of the company’s new Residential Basic rate plan, which offers 500 minutes of local, toll and long-distance calling throughout the United States and Canada for $14.99 per month.

The partnership with Vonage also signified a broader internal shift in home telecommunications at Motorola. The company has moved its year-old cordless phone products out of the retail products division and into the Broadband Communication group which also produces the MTAs, with the hope of better integrating its voice and data products, a company spokesman said.

Motorola is now looking to offer an end-to-end solution to cable voice providers and end-users, from back-end architecture to home telephony products, including phones and VoIP modems, the spokesman said.