Vonage Holdings Corp., which claims to own half of the US residential voice over IP services market, is ramping up its retail channel with OEM and distribution deals with Cisco Systems Inc. and NetGear Inc., announced yesterday.
CFO John Rego told ComputerWire the firm is rolling out a multiple CPE [customer premises equipment] manufacturer strategy. The company once used Cisco, switched to Motorola last year, and now has added NetGear and Cisco-owned Linksys.
The deals, which broaden Vonage’s retail strategy and will provide an element of customer lock-in, come at a time when the firm is on the verge of increased competition from the big incumbent telephone and cable operators.
Under the deal with Linksys, which will bear fruit first, the companies will deliver two sets of co-branded VoIP adaptors via Linksys’s retail channel, both of which use the Vonage chipset, developed by Texas Instruments.
Linksys will first deliver the PAP2, for Phone Adapter with two phone ports, and the RT31P2, Broadband Router with two phone ports. In a few weeks, Linksys will also start selling an 802.11g router with two phone ports, called the WRT54GP2.
The devices allow customers to plug their phones into Vonage’s services, and make IP phone calls to other IP or regular PSTN phones. They have web-based configuration and are compatible with features including caller ID, call waiting and voicemail.
The NetGear deal has its first deliverables in October. Its wireless 802.11g wireless router devices will come first, to be followed by their wired equivalents. The devices from both firms will support Vonage’s VoIP service, but not rivals.
While Vonage has over 250,000 subscribers and a nice big slice of the VoIP pie, cable companies and phone companies such as AT&T are taking aim at the VoIP market, which is still under-regulated and has massive growth opportunity.
With the reach of Linksys’s and NetGear’s channels, and some separate retail deals for its other equipment, Vonage clearly hopes it can head these giants off at the pass and keep its impressive growth rate in the face of increasing competition.
The company also announced yesterday a deal to sell the Vonage/Linksys package at 1,200 Staples stores. Rego said the firm now has 5,200 stores, including Best Buy and Radioshack, selling its products.