VoIP Treatment: Time Warner and Vonage assess internet calling market

Posted Apr 28th 2006 5:20PM by Anne Metz
Filed under: Forecasts, Products and Services, Industry, Internet, Time Warner (TWX)

As my blogs suggest, I expect VIP treatment -- a spot behind the velvet rope, a complimentary bottle of Cristal, a second bottle for my entourage, and someone to hold my parasol.

It turns out, however, that I need to start expecting VoIP treatment.

That's right, finance fans, VoIP is short for "voice over internet protocol." It's the way internet users are starting to make calls. By using a phone connected to a high-speed internet line, they can connect anywhere and talk to anyone.

Time Warner has been in this market for a while, but it's trying to increase the market share. Skype (owned by eBay) announced today that it had reached 100 million users. Additionally, Vonage Holdings Corp., may offer up to 31.25 million shares priced at $16 to $18 each in an initial public offering, according to a regulatory filing on Friday.

Citing industry analysts, Vonage estimates the market for Internet phone service in North America may get as high as 15.3 million consumers by the close of 2007.

15.3 million consumers?! Getting VoIP treatment?!

Well, did any of those 15.3 million consumers get invites to the afterparty I'm going to tonight?

I didn't think so.

Tags: Cristal, entourage, parasol, Time Warner, TimeWarner, TWX, velvet rope, VelvetRope, VIP, VoIP

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Reader Comments (Page 1 of 1)

4-28-2006 @ 6:17PM

EJ Passeos said...

Great post.
Where is this going? TW locally is advertising heavily their $39.95 phone service, but Skype is free? Vonage is spending XM-like for subscribers, and but is it profitable. Will it continue to be with Skype's technology and the sure to be impressive free, voice functions in instant message programs?
In the end, TW already owns the pipes, and it has been quite successful with their program. It isn't costing them much investment, it is a steady cash stream, and leaves them ready for any more changes in technology (but not Verizon's fiber optic capabilities) My family switched and they love everything about it. Soon, TW will be offering cell service, with some unique Tivo-like controls by phone.
This also adds to Carl Ichann charge of breaking up TW. AOL would have a nice value right now (ebay purchase?). TW would then have an entertainment division, cable, VOIP, and celluar services.
TW should have a new leader after this theoretical breakup. Mr. Parsons has done an incredible job with settling the various AOL-related SEC and other investigations. He stabilized AOL, appointed a great leader for it and now are among the top four or five Internet brands. Nevertheless, the stock is stagnant, there are little or no synergies emerging for AOL from the meanies at TW, and Steve Case should own/chair the company with Mr. Miller continuing as CEO. Mr. Parsons is a lawyer first. Mr. Ichann was right that for the rapid changes occuring in the tech-related world, someone else may be a better leader now that Mr. Parson's has accomplished so much.

4-30-2006 @ 11:07AM

cheryl said...

finally someone else is getting there

5-01-2006 @ 9:50AM

Al Gonzalez said...

What is it with people that keep thinking that bringing Steve Case back is the answer to all of Time Warner's problems? Excuse me but he has been the root of the problem. Just because he was smart enough to hoodwink a great company in to selling to him with his inflated and overblown currency (AOL stock)doesn't mean that he has the operational skills to run AOL. Have you tallied all the billions is settlement costs for AOL's accounting shenanigans? Sort of like Deep Throat said...follow the money or in this version follow the fictitious revenue numbers. Steve Case can never apologize or take any responsibilty for what happened because of all the legal liability he would be risking. So please, let us not lose our minds and ask for someone like Steve to run ANYTHING at Time Warner or AOL. Add up all the money that Time Warner paid to settle this. Big numbers. I cannot bring the fox back in the hen house after what happened. To entertain that is foolish and irresponsible. Serious solutions can be debated on their merits. Ridiculous suggestions cannot be taken seriously. In this particular case it is not funny either.