A discussion about the Telecommunication Industry

Vonage, the largest private VoIP service provider, has weathered a host of storms in the past year.  Vonage has settled numerous patent infringement lawsuits and has stemmed the tide of customer defections.  Vonage has yet to turn a profit, but it’s getting closer.   But there is a dark cloud hovering over all these silver linings.  Vonage has $250 million in bonds that are due in December.  Vonage does not have nearly enough cash on hand to pay off the notes.  If Vonage can not renegotiate terms with its bondholders, the carrier may be forced to declare bankruptcy.  It’s not clear what would happen to Vonage subscribers in that event, but when smaller VoIP provider Sunrocket when bankrupt last year, it cut off all 200,000 of its customers with little or no notice.