Vonage, You’re Making A Mistake, And Losing A Customer

Vonage Customer Since 2004

We’ve been Vonage customers for 5 years come mid-July. This very likely ends soon.

Let’s first say something, though: overall, we’ve enjoyed having Vonage. It was nice to be able to tell Ameritech/SBC where to stick their lackluster customer service and ridiculous billing. The Ameritech/SBC rep at the time had no idea what Vonage even was (which would hopefully no longer be the case).

They also couldn’t touch Vonage’s pricing. And it’s recent Vonage pricing changes that have us seriously considering surrendering our account with them…

We’ve had Vonage for our mixed-use/SOHO line since 2004. It’s been pretty good for us, mostly. We’ve never used it that much, so the 500 (outbound) minutes per month plan for $15/month seemed like a pretty good deal. It was actually more than we needed at the time; as it turned out, we had to work pretty hard to even use 300 minutes in a month–and that’s only happened a handful of times.

So for $15/month, we had a fairly nice, relatively-inexpensive solution to keeping a landline in our home for the random phone call we needed to make or–more critically, really–receive. And it worked pretty well. Once we worked out the router QoS settings and gave it the right amount of bandwidth, you’d never know it wasn’t a ‘real’ phone line.

We did go through a period where we had a lot of problems with Caller ID, though… even going without it at all for more than a year at one point. We wrote and called them and attempted to get someone to even acknowledge the CID issue, but Vonage was unwilling and/or unable to work with or help us. In the end, Vonage additionally refused to issue us a credit for any of our hassles at all–despite it eventually being a well-established issue by many other Vonage customers on many Vonage-related forums and other websites–because, in their words, “you’ve had active service all along”. We’re not paying for just the dialtone, Vonage; way to miss the point!

We were not amused, but at the same time, it was still the best bang/buck option available to us… so that came and went, and came again briefly, and went again… and overall, for fifteen lousy bucks a month, there’s just not that much complaining you can do.

And then the fees started to accumulate, bloating our bill.

Vonage started acting like a Real Phone Company, insofar as feeling it necessary to preemptively charge us for taxes and other fees they felt they might eventually have to start paying should they not get a pass on VoIP-related legislation. We were getting Milwaukee County Miller Park renovation fees tacked onto our Vonage bill. Really, Vonage? We started feeling like we were back with SBC/Ameritech, getting nickeled and dimed all over again.

Vonage was also involved in a lawsuit or two along the way, which no doubt redoubled their efforts to be as “preemptive” as possible collecting as much money from their customers as they could get away with. Our $15/month was rapidly turning into $18, $19, $20/month… a sizeable increase for something that shouldn’t really increase at all. It’s really no different than having a subscription to an online game, after all. It’s an online service we use over the Internet. Not really any different than web browsing, instant messaging, telnet, ssh, irc, and on and on.

Well, it seems Vonage is on another money grab. As of February, they’ve raised the rates on their $15/month plans to $18/month. With the fees, this jacks up our monthly bill to nearly $23/month. For a 500-minute plan.

Vonage’s solution to our $23/month dilemma? “Upgrade to our $24.95/month unlimited plan!”

Yeah, we’re just dying to do that. Looking at a recent billing statement, we used… thirty minutes the entire month of April. Thirty. Our $23/month bill, including fees and taxes, means we’re paying a nearly-ridiculous $0.77/minute.

If we upgraded our plan to the “unlimited” (note: not really unlimited-read the fine print!) $25/month plan, after taxes and fees, we’d be paying right around a dollar a minute. A dollar a minute!

So, as a result, Vonage will almost certainly be losing our business. We’re apparently not tethered enough to our phones to make it worthwhile, and they’d rather not bother. it’s a shame, because VoIP with Vonage could be one of those Great Equalizers, able to accommodate everyone at every usage tier and/or income level. And indeed, I thought that was kind of the point of Vonage in the first place. A for-profit business, to be sure, but also a company clearly interested in being a reasonably-priced VoIP provider that could and would dominate and maybe even destroy the Bells, bringing everyone along into VoIP fold.

Maybe Vonage feels they’ve succeeded at that, I don’t know. If so, they’re wrong. They’re certainly facing increased competition from Internet providers that are offering similar–and often more featured–telephony options alongside their Internet service.

What Vonage needs to do is consider the lower end of the market; something no one else is really doing effectively. “Skype”, you might say… but Skype isn’t really pedestrian enough a solution for most people. People want what seems and feels like a real phone. Skype too often feels like a toy (and frequently sounds like one, too). It’s great for all the geeks, but it’s not such a hot solution for the grandparents.

Vonage could easily offer lower-end services, at even lower prices, for people interested in paying less because, hey, they use the service less. What will be happening instead is Vonage will be losing those customers they’re attempting to force to upgrade, that already don’t get full use of the lower-tier plan. And again, after taxes and fees, I’m guessing Vonage’s $25/month unlimited plan would top out over $30/month, which means last month’s 30 minute of usage here would end up costing us a buck a minute. No thank you.

So Vonage, either offer us something that will keep us around, or they’ll lose us. And others like us, no doubt. I’d think even $10/month is still better than $0/month, for those that barely use the service, but would still like to have something around that works reasonably well. Even a cheap parking/forwarding service, to keep the number and allow inbound-only calls… I’d strongly consider it, and I’m sure others would, too.

We’ve tossed around the idea of a $200 Ooma box, but we’re not quite sold on their business model, although the break-even point after purchasing the box is at around 10 months. There are no mandatory monthly fees with Ooma,, but there’s a premium package that’s certainly got our attention. That’s still $100/year (minus the hardware cost) for a few dozen minutes a month, though…

And of course, too, we want something we can hang onto and not have to change. We also don’t want a Sunrocket situation with Ooma going belly-up and leaving us and our phone number stranded and difficult if not impossible to recover.

Of course, I have no idea what it costs Vonage to maintain a line and number for a customer, so maybe that’s part of their pricing, too… but surely there’s some kind of option to keep Vonage from losing the lower-tier customers. Jacking up the price, by the way, if it wasn’t already clear… isn’t really one of them.

So, Vonage, we prepare to bid thee adieu. Will you be around still in 2, 3, 5 years? Who knows. It’s no longer a bet we’re willing to take.

Update: Vonage has been running commercials recently bragging about how they’ve never raised prices. Watch the commercial closely. They specifically limit their claim to their $25/month “unlimited” plan. They conveniently leave out the gouging they’ve been doing trying to force people off thei 500-min/mo plan, jacking that up from $15/mo to $18/mo. They’ve also not mentioned they’ve kept adding fees to the bills over time, causing increases of several dollars over the years in the total price of the service per month. In a nutshell, the commercial’s technically truthful, but otherwise fairly dishonest and deceptive. Buyer beware.

7 thoughts on “Vonage, You’re Making A Mistake, And Losing A Customer”

  1. I’m also getting pretty fed up with Vonage’s price increasing. Seems to be every 4-6 months they are sending me an e-mail saying that unfortunately, a couple of services are going up 50 cents each. I’m one of the lucky ones who had to agree to 2-years of service, or I will be tagged with a $40 disconnect fee.

  2. @Justin: Wait ’til you try to leave, even after your two years are up. They will always try to keep you, find some way to bill you more on your wait out the door, or otherwise berate you or lie to you to retain you. It’s one of of the most customer-unfriendly experiences I’ve ever had. Reading around, you’ll easily find similar if not identical complaints from others. Good luck!

  3. LtVu: There are indeed fees put in place by govt entities, but Vonage is/was collecting several they were not at all required to collect, “just in case”. For a company that–at least initially–swore up and down they’d never be like a regular phone company, they’ve turned into pretty much exactly that. I suppose it could be argued that it’s all inevitable, but I’m not easily convinced.

    Thank you very much for stopping by and for your comment.

  4. Vonage’s fluctuating bills every month keeps me wondering what happened this time. It’s the fine print that gets us off guard.

    I travel a lot and need a telephone number that travels with me. I have to admit there are no real good alternative VoIP services. Vonage remains the most reliable of all. Until then I’m forced to stay with them.

  5. These days I rely pretty heavily on Google Voice. It’s not perfect, but for roughly the same level of performance and reliability, coupled with a zero-dollar price tag, it wins out over Vonage, for me. I at least feel I’m getting more than what I’m paying for. 😉 Good luck with Vonage. 🙂

  6. Unlimited is not unlimited. They claimed I have used over 3,000 minutes and without my permission, they changed my rate to $49.99 . With taxes and fees, it was over $65 pee month. Have anyone looked in to filing a lawsuit? Their advertising says unlimited minutes. But it is not.

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