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Vonage PR Campaign: a Damage Control Effort?
[April 25, 2007]

Vonage PR Campaign: a Damage Control Effort?

TMCnet Web Editor
Although provider Vonage (News - Alert) can again sign up new customers after being granted a court order stay in the Verizon patent dispute, the VoIP service provider has a lot to do to restore shareholder and subscriber confidence.

To that end, Vonage has decided to pull out all the stops. The embattled company announced Wednesday it would launch a national grassroots communications campaign to educate and mobilize consumers about preserving the freedom to choose their phone service provider.
Called "Free to Compete," the campaign will purportedly raise awareness of the importance of consumer choice, according to Vonage. But the campaign can also viewed as a ploy by the VoIP phone service company to rally public support in its patent dispute with Verizon (News - Alert). Vonage’s fate remains in the hands of the U.S. Court of Appeals for the Federal Circuit, which is in the midst of hearing testimony from both Vonage and Verizon attorneys on the three disputed Verizon patents Vonage was found to have infringed upon.
Ever since the March court decision ordering Vonage to pay Verizon $58 million in damages and future royalties, Vonage has refused to back down, expressing confidence it would survive and prosper. The company has had to put up a bold front despite seeing its stock prices tumble, the resignation of its CEO earlier this month, and recent reports Vonage would have difficulty finding a way to work around Verizon’s patents.
Vonage did not state how much the campaign would cost, but the company is obviously betting that the pr effort would generate enough good vibes to positive effect its bottom line.
"We want to highlight the choice that Vonage offers to the public: a choice to receive great phone service at a great price," said Jeffrey Citron, Vonage's chairman, chief strategist and interim chief executive, in a statement. "We think this issue warrants national attention because when competition is stifled, consumers literally pay the price. Vonage is the target today, but what other innovative companies might be next?"
Vonage is betting on publicizing the strength of its vast subscriber base—one that it is desperately trying to hold on to—to show that it has saved consumers hundreds of millions on local and long distance service. According to the court filing in the Verizon case, Vonage currently has 2.4 million subscriber lines, while Verizon has just 15,000 retail VoIP customers.
"Vonage has always viewed healthy competition as a good thing," Citron stated. "It encourages continued innovation and provides consumers with choices and low prices. Vonage has never shied away from going head-to-head with the competition -- no matter how big and deep-pocketed -- and we will continue to fight Verizon both in the marketplace and in appeals court."
The "Free to Compete" campaign includes a series of advertisements beginning today in leading newspapers across the country, letters to Vonage’s customers and a Web site--designed to educate and mobilize consumers about the importance of choice in the telecommunications industry. The Web site includes facts about the pending patent litigation, a petition to protect consumers' right to choose phone service providers and a feature allowing visitors to tell Verizon what they think about the company's tactics.
Spencer Chin is a contributing editor for TMCnet. To see more of his articles, please visit his columnist page.
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