Never. The model doesn't work at their pricing model. They will never be
profitable.
The $279 acquisition costs don't include hardware, advertising, referral
fees, coop fees to retail partners.
Their churn is double digits.
They don't indicate how many purchase hardware and never activate.
Their acquisition cost would still be more than a year's worth of revenue.
However, that doesn't include payroll and ILEC & CLEC expenses which
probably eat up 75% of their MRC.
- Peter
Tom DeReggi wrote:
Yes but Vonage is also a poor example of your arguement as 75% of
their expendatures is in advertising.
That means 75% of their expendatures could be stopped on demand
immediately, without reducing revenue.
How quickly could Vonage become profitable, when they reach the
approrpiate scale, and they stop marketing?
I haven't done the math, but it paints a different picture of
potential profitabilty.
Tom DeReggi
RapidDSL & Wireless, Inc
IntAirNet- Fixed Wireless Broadband
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