Why Vonage Would Want To Sell Their Consumer Voice Biz

Yesterday I speculated that Vonage's Consumer Business is up for sale. A post that immediately triggered reaction from those in the know, including some who claimed to have had access to the exploratory talks that are already going on. 

What is leading to this speculation? A couple of factors.

1. Recent statements by Vonage execs emphasizing the focus towards unified communications for business.
2. The hiring of Chiat Day (as mentioned)
3. The fact that cable providers in the USA now have 31 million digital voice subscribers and are bundling in voice as they increase cable rates but basically give away phone service.
4. An increase in cord cutting. No cord. No way for Vonage to connect.
5. Wi-Fi Calling. For those who still have the cable cord, Wi-Fi and a mobile phone capable of Wi-Fi calling (which are increasing). Now that all 4 major U.S. mobile operators offer Wi-Fi calling the ability to use the mobile inside the house, have E911 capabilities and a single number all the time, means less need for a "landline."

In many ways Vonage wanting to get rid of their consumer business makes good sense. Just as it did for Verizon who sold off a chunk of their landline and DSL business to Frontier.

The last tell though is the reported layoff of 110-120 consumer focused employees. It's a regular tactic of companies that are going to sell off a division to lower the headcount, streamline costs a few quarters before you unload the business. This makes the numbers look better, increases profitability, so given Vonage's tone on things, this all makes sense to be selling the division.

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via Andy Abramson

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