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Vonage's forthcoming yearly plan: it's all about generating ca$$h

Word is spreading quickly today that Vonage is set to announce a pre-paid, annual option for its Residential Premium Unlimited Plan.Subscribers would pay $249.
Written by Russell Shaw, Contributor on

Word is spreading quickly today that Vonage is set to announce a pre-paid, annual option for its Residential Premium Unlimited Plan.

Subscribers would pay $249.99 for twelve months of service. That's about a 20 percent savings from the $24.99 a month payment option.
 
I don't think all that many current and prospective Vonage users will go there. Why? Vonage subscribers have especially been marketed to on the basis of price and cost-savings. And although the annualized cost savings are plain to see with this offer, it sounds kind of counter-intuitive to switch gears and then ask those same users to dig in for, well, $250 bucks.
 
If I signed up for Vonage because I wanted to cut my PSTN bill in half- say $50 to $25- I am now fo $250 in the hole. Maybe I've budgeted that $225 (difference between $250 and the savings already in place) for something else this month. Even if I didn't, it will take several months for the net savings to kick in.
 
No, this deal is not for customers. It is about trying to stem losses and thus, reassure skittish investors by extracting more cash from a customer base that is is growing slower and churning faster.
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