Vonage Targets Prosumers

July 30, 2008

Vonage Pro, a first-of-its-kind digital voice offering featuring five components that keep you connected to your home life while on the go, including the ability for customers to use their home phone number virtually anywhere they have access to a high speed Internet connection has been launched. Vonage Pro is the next step in the MyVonage product strategy, which is focused on developing products and services based on the requests of customers who have a wide variety of lifestyles and communication needs.

"Vonage revolutionized the communications industry when we launched our digital phone service eight years ago," says Jamie Haenggi, Chief Marketing Officer. "Today, our customers' lifestyles dictate more demanding communication needs and we are again driving the industry forward by providing customers with innovative communication solutions that are designed with their lifestyle in mind. Vonage Pro provides consumers with services they don't just need, but they really want."

Vonage Pro features five components that specifically accommodate the lifestyle of "prosumers," or professional consumers who are comfortable with and understand the benefits of using technology to improve their personal and professional lives.

The offering includes Vonage SoftPhone client, Vonage Companion, that allows the residential or home office user to access their home number from any desktop or laptop PC connected to a high speed Internet connection, enabling them to communicate as if they are at home.

-- Incoming calls ring both the customer's home phone and their Companion, and customers can make outgoing calls on both devices simultaneously -- essentially providing a second phone line.

-- Vonage Companion also offers customer requested features such as selective call block, conference calling, personalized ringtones and call recording.

-- Customers can use their PC's built-in microphone and speakers or plug in a headset with microphone to make and receive calls.

-- Vonage Companion automatically synchronizes with Vonage Contact Center

-- Home office users will never miss an important call when away on vacation or on a business trip.

"In a competitive communications landscape, VoIP services need to differentiate themselves on more than price," says Patrick Monaghan, Senior Analyst in Consumer Research at Yankee Group. "Advanced, flexible features that allow consumers to communicate anywhere will continue to grab market share."

Vonage Pro also includes Unlimited Vonage Residential Digital Voice service, 25 Vonage Visual Voicemail messages, 25 411 Directory Assistance calls, and automatic integration of Vonage Contact Center -- all for one monthly rate. Vonage Visual Voicemail automatically transcribes voicemails to email or SMS text so customers can read, store, search, and respond to their voicemail messages on their phone, laptop or mobile device wherever and however they choose. Contact Center provides customers with the ability to synchronize all contacts from their home, desktop and mobile address books while providing additional features such as Voice Activated Dialing and Speed Dial.

"Vonage Pro is the VoIP offering that prosumers have been asking for to help them stay connected while on the go," said Haenggi. "We've already received feedback from beta users that indicates Vonage Pro will be a success, both in the quality of the phone service and the unique features it offers."

Vonage Pro, which comes together with Vonage's Residential Premium Unlimited Plan, will be offered to new customers for a plan fee of $34.99 per month (plus taxes and fees), and the plan fee for the first month will be waived as part of an initial promotion of this plan. Existing customers on the Residential Premium Unlimited Plan can add Vonage Pro for an additional $10 per month and they will also have their first month's Vonage Pro fee waived as part of the initial promotion.

Separately, Vonage has appointed Marc Lefar Chief Executive Officer of Vonage. Lefar replaces Interim CEO Jeffrey Citron, who had assumed the additional role in April of 2007. Citron will assume the role of non-executive Chairman of the Board and serve as a consultant on long-term strategy.

"I believe there is no better person than Marc to lead Vonage at this time. He possesses a wealth of telecom experience and a strong mix of strategy, finance and operating skills. His marketing expertise is second to none," said Citron. "The Board believes he will bring a fresh perspective to addressing the opportunities and challenges ahead and will help the Company to realize future growth and profitability."

"Jeffrey and the talented Vonage team have helped to change the way people think about communication," said Lefar, commenting on his appointment. "Moving forward, we will continue to improve the customer experience from end to end. A friendly user experience combined with meaningful, intuitive features will accelerate growth and improve loyalty."

For more than four years, Lefar served as Chief Marketing Officer of Cingular Wireless, (now AT&T Mobility). During his tenure, the company's customer base more than tripled and subscriber churn declined by nearly 50%. He played a critical role in the successful integration of AT&T Wireless, launched the award-winning "Raising the Bar" advertising campaign and drove product initiatives that yielded several billion dollars in new revenues. After leaving Cingular, Lefar founded Marketing Insights, a technology and media consultancy.

Prior to joining Cingular, Lefar was Executive Vice President, Marketing and Value-Added Services at Cable & Wireless Global. He also held senior leadership roles at Verizon Wireless and GTE Wireless. Lefar started his career at Procter & Gamble.

Vonage also entered into a commitment letter to raise up to $215 million in a private debt refinancing. The company will use those proceeds along with some cash on hand to repay its existing debt which could come due on December 16, 2008.

"We believe this arrangement will eliminate much of the uncertainty surrounding our financial prospects and demonstrates our commitment to enhancing the long-term value of our business," said Jeffrey Citron.