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Oct 8
Vonage Settles Sprint Lawsuit
Andrew Taub October 8, 2007
Know More: Network Services
Internet phone company Vonage Holdings Corp. took a step back from the brink today, saying it has settled a patent suit filed by Sprint Nextel Corp. for $80 million

 

In Spetember, a jury found that Vonage infringed on six Sprint patents, and ordered Vonage to pay $69.5 million in damages.

 

Monday's settlement resolves all claims in the dispute, the companies said.

 

Sprint agreed to license Vonage more than 100 patents relating to Voice over Internet Protocol phone calls.

 

The $80 million Vonage agreed to pay consists of $35 million for past use of the patents, $40 million for a fully paid future license, and $5 million in prepayment for services.

 

Vonage's troubles, and the sudden shutdown of rival Sunrocket in July, have raised questions about the future of standalone Internet telephone companies. Many existing subscribers have left Vonage for fear of service disruption.  Many others potential customers never signed up for the same reason.

 

Vonage was a pioneer in this market and was until last year the biggest player. But its subscriber growth has stalled this year, leaving it with 2.3 million subscribers at the end of the second quarter.

 

Meanwhile, cable companies, such as Comcast, Cablevision and Time-Warner, have rolled out VoIP technology and have quickly gained customers among their video subscribers. Comcast Corp. ended the second quarter with 3.1 million subscribers.

 

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