Vonage Playing Lingo

Finally Vonage is offering a subset of Lingo’s free calls to Europe:  if you’re on the unlimited ($24.99) plan, calls to France, Ireland, Italy, Spain and the UK are now free. Too bad Lingo whose unlimited plan is five bucks cheaper has been offering free calls to most Western European countries ever since they launched. 

Before anyone thinks I am on Lingo’s payroll: no relationship whatsoever, in fact I’ve been a faithful Vonage customer since the beginning. I still  am – just don’t know why… probably since I am too lazy to switch, and $5 a month savings was not a strong enough incentive (hm… let’s see… Lingo has been in business for about 2 years, that’s a $120 in “lost” savings…).

But the real threat is not Lingo:  ZDNet crunches the numbers for us: 

“Let’s just say that I am a U.S.-based caller who talks to other U.S. local and long distance numbers 16 hours a month, as well as spends four hours a month speaking to colleagues and friends in the nations now part of Vonage’s new plan.
If I am on Vonage’s Premium Unlimited, I can do it all for $24.99. If I am on SkypeOut, 20 hours= 1200 minutes or around $25.00.
So that’s pretty much a wash.” 

But Skype is not the only threat, there are zillions of competitors – Yahoo IM is less expensive than Skype, but I don’t even want to do the math on it, let’s jump to almost-free right away:  VoipStunt  allows (almost) free calls to landlines in 46 countries.  “Almost”, since there’s a flat fee of 10 euros (roughly $12.70) that has to be renewed every 4 months – that’s about $3.25 a month.   That’s what I call a squeeze.

And that’s why the Vonage IPO is a dud.

Tags: VOIP, Vonage, Lingo, Skype SkypeOut, Yahoo, VoipStunt, IPO