Technology

Direct Dial for Vonage

11/10/2006 7:00 PM Eastern

In an effort that will also help retail partners boost broadband and telephone hardware sales, voice-over-Internet Protocol phone provider Vonage Holdings has forged a deal that will enable consumers to initiate phone service at the point of purchase in Circuit City stores nationwide.

To facilitate that activity, Vonage has contracted with Boston-based GetConnected, a transaction-processing platform provider that also powers up in-store kiosks. Those booths enable point-of-purchase service connections for such GetConnected clients as Comcast, Time Warner Cable, AT&T, Cingular Wireless and Verizon Communications.

Vonage has reached the early adopters, said vice president of sales Dave Goodwin, and now counts 2 million active customer lines. Its most popular residential package affords unlimited calling to the U.S., Canada and five European countries for $24.99 per month. Those consumers have bought the hardware from such retailers as Wal-Mart, Best Buy, Target and Circuit City.

But as the company reaches out to the less-tech-savvy, buyers need more information to make the service decision that’s right for them. Goodwin said that Vonage offers consumer rebates for hardware purchases, but some takers put off filing the paperwork, decline the rebate or forget about it. With in-store technology, Vonage can authorize rebates when the hardware is sold, he said.

Though GetConnected has deals with Vonage and its cable-operator competitors, it remains neutral on which products are promoted to consumers, said vice president of sales Jack Connors.

“We view ourselves as an enabler,” he said, adding that merchants decide which services are offered, how they are offered and to whom. “Whatever they choose, we can simplify.”

Anecdotal evidence offered by retailers indicates they sell more broadband services if they can offer phone service and high-speed Internet connections simultaneously, Connors said.

At this point, though, Vonage will not be bundled with a specific broadband provider or other services, said Goodwin. But there’s potential for such alliances down the road.

Circuit City stores nationwide can offer the in-store connections and will promote Vonage by offering gift cards as incentives for immediate activation, the VoIP provider said.

The provider pays a sales commission, or a portion of ongoing revenue, to the retailers for promoting in-store activation.

The retailer determines the compensation method, Goodwin said.