Vonage has just come out with a press release that they are dropping per minute charges to select international destinations to ONE CENT a minute. Now, I see international rate decks from major carriers all the time. No one can charge that kind of rate and make a profit.
This is definitely a suicidal move by Vonage – what will be next?
UPDATE – Just had a second look at the rates. For example Israel – landlines they are charging 1 cent (wholesale cost is 1.1 -1.2 cents a minute) BUT – they are charging 22 cents for Israel cell (where wholesale cost is only about 6.5 cents a minute). So, maybe they are going the way of using one of the old tricks of the calling card industry. Pull them in with the low rate and then gouge them on other destinations. And I thought they were a new kind of Phone Company?!?
I was cheering for Vonage, but this is too much.