Vonage Settles With Sprint… Prelude To A Sale?

from the maybe-possibly dept

Just a couple weeks after losing yet another patent lawsuit, Vonage has decided to settle its patent lawsuit with Sprint, agreeing to pay $80 million, covering both past and future licensing costs. The company is still fighting over Verizon’s questionable patents. Again, it seems pretty silly that the company that actually figured out how to bring phone-based VoIP to the market in a way that people wanted now has to pay the incumbents who were unable (or unwilling) to do so. Of course, there’s also been lots of talk that these patent lawsuits were really an attempt by the telcos to crush Vonage to the point where it was an easy buyout target. Thus, settling with Sprint, could open up the possibility of a Sprint purchase… but it probably would have just made more sense to do the buyout first before “settling,” as the news of the settlement has sent Vonage’s stock soaring. Based on that, don’t be too surprised if Vonage reaches a bit deeper into its dwindling cash reserves to to pay off Verizon as well — the resulting stock bump could effectively pay for the licensing fees. All in all, though, it does highlight how silly the patent system has become. The uncertainty over the suits hurts a company’s stock and pushes companies to settle, even if they shouldn’t. That’s exactly what happened with RIM and NTP, and it looks like what happened here.

Filed Under:
Companies: sprint, verizon, vonage

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Comments on “Vonage Settles With Sprint… Prelude To A Sale?”

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JS Beckerist (profile) says:

Really? Great the WHOLE time?

Not to be TOO pessimistic, but I’ve found that Vonage is actually quite unreliable in terms of call quality and support. If my router is using ANY bandwidth more than maybe my xbox playing Halo, calls will be dropped or sound spotty like a cell phone with bad reception. Yes, I set up QoS on my router. Yes I know how to throttle, YES I’ve used it for years but it makes no difference. Whatever tweaking I do seems to only worsen the problem.

With that said: VoIP has come a long way in the few years I’ve experienced. The bandwidth problems I have now don’t even come CLOSE to comparing what they were even a year ago. Also, it’s sad to see the big companies (Verizon especially, which gets a solid 10% of my income!) taking advantage of this, and instead of innovating on their own end, they are basically bullying the “little guy.” My guess is, once Vonage is beaten into submission (which I believe is inevitable) it will either be bought out by one of these bigger companies, OR the big daddy companies will create their own VoIP startups, and prevent companies like Vonage from using their lines, essentially furthering their monopoly on the market. I don’t see:
A) How Vonage can come out on top and
B) How any of this helps me (the end user.)


I have had Vonage for over two years and NEVER have I had anything but crystal clear conversations. I have never had a dropped call. Even if I am downloading torrents from both PC’s, and playing online games, I am able to have perfect calls. All this patent BS is just big corps playing hardball. If they put Vonage out I can guarantee I will not be sending them any of my money for the same service.

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