Vonage is redefining communications by offering consumers and small businesses an affordable alternative to traditional telephone service and is the fastest growing telephony company in the US. It is sold directly through www.vonage.com and retail partners, some of which resell the Vonage broadband phone service under their own unique brands. Vonage is headquartered in Edison, New Jersey.
Kerry Ritz is Managing Director of Vonage in the UK. An IMD MBA, Kerry was previously employed by 3 as Director of Customer Strategy. Before that, he was Head of Practice at consultancy InterMatrix where he created numerous go-to-market strategies for telecoms operators in Europe, Asia and Latin America. Kerry's early career was spent in brand marketing, strategy and business development with consumers' organisations in the USA.
Kerry, tell us about Vonage and your plans for the UK market?
Our aim is to make peoples lives easier through better communications tools. That sounds like a grand statement, but is simply about providing both choice and control, for the first time in the UK.
The system hasn't changed for over 100 years, yet we will enable a number to be separated from the exchange: thus providing a number for life regardless of where you live. A customer simply selects a dialing code - of which there will be 450 rising from 120 currently - which he or she then takes anywhere. A user can also choose a secondary virtual line and pay a local rate. For example, a UK customer can have a secondary US number to make and receive calls to the US and only pay a local rate.
On the subject of consumer control, everything is web-enabled. This allows all users complete control of their account.
Has VoIP arrived as far as consumers are concerned, or do you see it being somewhat of a 'slow burner' which will take time to gain momentum, such as 3G services for example?
I see VoIP as being totally opposite to 3G. The UK is at the forefront of broadband penetration now, albeit lower than in Norway and France. With average VoIP penetration in Europe currently at 6-7%, we expect this to grow to 15-20% over the next 3-4 years. This growth, combined with very easy set-up - it only takes 5 minutes to install Vonage - represents a significant market for Vonage.
What do you think will drive consumers' purchasing decisions when it comes to VoIP?
VoIP, or Voice Over Broadband as we call it, is not just about cheap calls. A competitive price is certainly a component of the market offer, however it is really about combining this with an innovative service package. In addition to that which has already been mentioned, Vonage enables customers to receive their voicemail as email, for example.
I guess the general public might consider Skype to be your closest competitor, given your respective high-profiles. How is Vonage different?
Skype is a PC-to-PC based solution which we would categorise as a replacement for international calling cards. As such, it is an adjunct to services provided by a telephony service provider and not a replacement for such services.
Vonage offers both consumers and businesses a telephony alternative to BT, which would represent a replacement to the service provided by BT, rather than something that would run in tangent with BT, like Skype.
Vonage operates in the US, UK and Canada. How do these three markets differ in your experience?
The competitive landscapes in the US, the UK and in Canada are quite different. For example, the UK exceeds the US in terms of broadband penetration, and the fixed line market here in the UK is highly competitive, albeit that most of the UK players simply resell BT services. Cable is much stronger in the US and provides a clearly differentiated market offer.
In Canada, the incumbent is simply very strong.
In terms of Voice Over Broadband, there is an increasing recognition in all three markets of both VoIP and Vonage. Our most recent launch (in the UK) was proportionally better then in Canada, which in turn had been proportionately better than our launch in the USA: this seems to indicate that consumer awareness has risen over the period of these three market launches.
What stage has Vonage's UK business reached in its development?
We embarked upon a soft launch at the start of this year before recently progressing to a full commercial launch. The advantage of the soft launch is that it enabled us to focus on our customer care activity; we have a 24-hour customer care operation prior to full launch. Presently, we have about a quarter of a million lines activated in the UK. We will utilize the full range of media to project our message, as well as establish new categories such as retail. High street brand, Staples, sells the Vonage solution now in the UK, which is a channel that has worked well for us previously in both the US and in Canada.
You worked at 3 previously. What key learning experiences did you acquire there that would apply in your current role at Vonage?
3 is trying to create a brand new category within communications that is fundamentally different to anything that existed previously. As such, it is challenging the definition of what it is to be a mobile service provider.
This category redefinition is exactly what Vonage has embarked upon in the fixed line service provider marketplace.
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Alun Lewis, Consultant & Writer
Thought Leadership Feature: 'Next Generation Networks
need Next Generation People'.
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