Evenings around here are not typically a time when I devote significant concentration to thinking about VoIP. I mean, last night the X-chromosomal unit and I went out for ice cream, and then came home to watch a Law & Order rerun about a longshot horse that truth be told, shouldn't have been rated such a longshot.
But then again, there are legit longshots.. which brings me to the subject of this post.
Since the news cycle never really stops, I spent part of last night and this morning mulling over the possibilities posed in a report that said Vonage was rumored to be in merger talks with Atlanta-based regional phone powerhouse BellSouth. I first noticed the report on the Vonage VoIP Forum, where a Forum member started a thread that linked to the initial report. The report was of such high interest, that I even posted something about it last night.
My first thoughts were about BellSouth, the company. Of all the leading independent local exchange carriers, BellSouth has always been the most conservative in terms of business acquisition strategy. Sure, they partnered with SBC to spawn Cingular Wireless, but that was and is an alliance with a peer, not an outsider. Plus, in terms of raw subscriber count, cellular was and is ahead of VoIP. A straight-ahead acquisition or even an alliance outside the ILEC (Independent Local Exchange Carrier) family might be too much of a corporate cultural leap for this quite button down company to stomach.
I then checked to see what some colleagues were saying. After doing the math, the redoubtable Om Malik says that the rumored price tag of $3.5 billion - plus the reality of subscriber churn, make BellSouth buying Vonage "unlikely." He says that if BellSouth really feels the need to snap up an existing Internet voice provider, they might go after a company such as Net2Phone, which would be "a cheaper option."
Fellow VoIP blogger Andy Abramson also does the math. As to the $3.5 billion, he finds the price tag "almost excessive." He adds that given Vonage's current customer count and "no real in-house technology," he doesn't see the value of such a transaction.
Not that it will happen, but if Vonage is ever in the mood to put itself up for sale, this would make the most sense.
Should Vonage put itself up for sale now, or any time in the forseeable future? What do you think makes the most sense? Post a TalkBack and let us know your thoughts.