Vonage 2010 Annual Report Download - page 10

>
M
o
bil
ean
d
ot
h
er connecte
dd
ev
i
ce serv
i
ces
.
W
e are
d
eve
l
op-
in
g
next-
g
eneration services to meet the increasin
g
deman
d
f
or services b
y
users of mobile and other connected devices
.
W
e believe that our e
ff
orts will ca
p
italize on
f
avorable trend
s
includin
g
the proliferation of low or no-cost Wi-Fi and other
b
roa
db
an
d
aroun
d
t
h
e wor
ld
, acce
l
erat
i
ng smart p
h
on
e
a
doption rates, and the
g
rowth o
f
social communities. We
p
l
an to
d
e
li
ver easy-to-use app
li
cat
i
ons t
h
at prov
id
es
i
g
-
ni
f
icant cost savin
g
s in lar
g
e existin
g
markets, which coul
d
include such services as international calling plans for
a
broad range o
f
mobile phones to provide an alternative t
o
roamin
g
services o
f
mobile carriers, lower cost domestic an
d
international short message service
(S
M
S)
text messagin
g
services, and enhancements to
f
acilitate social communit
y
c
ommun
i
cat
i
ons.
Whil
emo
bil
e serv
i
ces are a
k
e
yd
r
i
ver, we
a
lso believe that a
f
ully-integrated communications experi-
e
nce that works seamlessly
f
or an individual across multiple
c
onnected devices including P
C
s, tablets, readers, and larg
e
screens, will ultimately be most desired by customers
.
>
Expansion opportunities outside of the United States
.
W
e
c
urrently have operations in the United Kin
g
dom and Canada
.
O
ur low-cost Internet-based communications platform allow
s
c
ustomers to make and receive calls almost anywhere in th
e
w
or
ld
t
h
at a
b
roa
db
an
dI
nternet connect
i
on
i
s ava
il
a
bl
ew
i
t
h
a
V
onage-enabled device. This provides us with the
f
lexibility t
o
pursue opportunities to expand into new
g
eo
g
raphies wit
h
a
ttract
i
ve
ly
pr
i
ce
d
serv
i
ces.
W
e
b
e
li
eve t
h
at our ear
ly
success
w
ith the introduction of Vona
g
e World for Canada and the
c
urrent use of our services in countries outside of the
U
nited
States, Canada, and the United Kin
g
dom by our customers
d
ue to its portability, demonstrates the viability of our serv-
ices outside the United States.
O
ur operational progress has been driven by focusing o
n
activities addressin
g
strate
g
ic imperatives implemented across
our or
g
anization. We established the followin
g
seven strate
g
ic
imperatives
f
or 2010:
>
O
n Boarding and Early Life
S
atisfactio
n
.W
e expan
d
e
d
t
h
e
u
se o
f
our on boardin
g
queue, which we
f
irst established i
n
m
id-2009 to
p
rovide s
p
ecialized assistance to new custom
-
e
rs to reduce earl
y
li
f
e churn. As o
f
December 31, 2010, these
ag
ents supported all new customer call volume resultin
g
i
n
improved earl
y
life satisfaction and lower churn
.
>
Distribution and Marketin
g
Effectiveness
.
With
ou
r
co
ntin
ued
f
ocus on delivering value to international callers as part o
f
ou
r
V
ona
g
e World plan, we developed tar
g
eted marketin
g
and
in-language advertising for attractive international long dis
-
tance markets, while lowerin
g
mass marketin
g
spendin
g.
>
Network, Product, and Platform Reliability and Quality
.W
e
d
eveloped additional call quality metrics that enable us t
o
c
ollect more robust data on the frequenc
y
and breadth o
f
c
ustomer issues at a
g
eo
g
raphic and subscriber level. Thi
s
information has helped us to continuousl
y
improve call qualit
y
a
n
d
re
li
a
bili
t
y
.
>
New and Enhanced Products and
S
ervices. We focused o
n
the development o
f
next-
g
eneration products
f
or mobile and
o
ther connected devices that meet the needs of specifi
c
c
ustomer segments w
hil
e promot
i
ng usage an
db
ran
dl
oya
l
ty.
In Au
g
ust 2010, we launched the Vona
g
e Mobile applicatio
n
f
or Facebook
,
with additional introductions from these effort
s
e
x
p
ected in 2011 from our United States and Israel-base
d
d
eve
l
opment teams
.
>
Cost O
p
timizatio
n
.
We levera
g
ed hi
g
her international callin
g
volume to drive a 25
%
reduction in international lon
g
dis
-
tance termination rates durin
g
2010, miti
g
atin
g
the hi
g
her
cos
t
sf
r
o
min
c
r
eased
int
e
rn
a
ti
o
n
a
l
ca
ll v
o
l
u
m
e assoc
i
a
t
ed
w
ith Vona
g
e World. We also reduced sellin
g
,
g
eneral an
d
a
dministrative expenses by 10
%
and reduced customer care
c
osts by 20
%
per line in 2010 compared to the prior year. I
n
a
ddition, we reduced the cost
f
or the devices that enable ou
r
service by more than 20
%
throu
g
h an equipment redesi
g
n.
>
O
rganizational
C
apacity and
S
kills Enhancemen
t
.
S
ince w
e
b
egan t
hi
s
i
n
i
t
i
at
i
ve
i
n 2009, we
h
ave attracte
d
seasone
d
e
xecut
i
ves to
l
ea
d
customer care, pro
d
uct
d
eve
l
opment an
d
IT
, pro
d
uct management, researc
h
an
dd
eve
l
opment, net-
w
ork operations, finance, and legal that we believe are well
-
q
ualified to continue to drive our transformation. We als
o
a
dded telesales and customer care centers in
C
osta Rica and
C
hile in 2010 as part of offering an end-to-end
S
panish lan-
g
uage exper
i
ence, an
d
we can a
dd
more capac
i
ty at t
h
es
e
c
enters as our nee
d
s grow.
W
e cont
i
nue to
i
mp
l
ement a
ddi
-
tional training programs to enhance the skills of our employee
b
ase
.
>
Focus on Technolo
gy
Trans
f
ormatio
n
. In mid-2010, we hired
a
new vice
p
resident o
f
research and develo
p
ment to lead our
technolo
g
y strate
g
y, evolve our network plat
f
orm, an
d
d
evelop our next
g
eneration mobile and web-based prod
-
u
cts. We o
p
ened a
p
roduct develo
p
ment center in Tel Aviv,
I
srael to su
pp
ort these e
ff
orts and to ta
p
the talent
p
ool in the
re
g
ion. We are makin
g
substantial investments in in
f
ormatio
n
technolo
g
y systems includin
g
enhanced orderin
g
and billin
g
c
a
p
abilities to better suit the current and
f
uture needs o
f
th
e
bus
in
ess
.
C
ertain of these strategic imperatives now have bee
n
i
ncorporate
di
nto our
d
a
ily b
us
i
ness act
i
v
i
t
i
es an
d
em
b
e
dd
e
din
our corporate cu
l
ture.
W
ew
ill b
u
ild
on t
hi
s operat
i
ona
l
progress
in
2011
b
y execut
i
ng on new or a
d
vance
d
strateg
i
c
i
mperat
i
ves.
We
h
ave established the following five strategic imperatives that w
e
believe will help drive our results for 2011
:
>
O
r
g
anizational
C
apacit
y
and
S
kills Enhancement
.
C
ontinuin
g
e
fforts initiated in 2010 to further broaden the ca
p
abilities an
d
d
evelop the skills of our workforce by improvin
g
talent man-
ag
ement and enhancin
g
employee en
g
a
g
ement.
>
D
rive To
p
Line Revenue Growth. Drivin
g
revenue throu
g
h
f
urther penetration o
f
underserved market se
g
ments and b
y
launchin
g
services that capitalize on existin
g
consumer
b
e
h
av
i
ors an
d
mar
k
et opportun
i
t
i
es, w
hil
e cont
i
nu
i
n
g
to pro-
vid
eva
l
ue to our ex
i
st
i
n
gd
omest
i
c
b
ase
.
>
Achieve
S
tructural
C
ost Reductions to Increase EBITDA.
P
lanning and implementing systems and platform enhance
-
ments t
h
at w
ill
ena
bl
e customer care, carr
i
er operat
i
ons, an
d
networ
k
operat
i
ons to
d
e
li
ver
hi
g
h
qua
li
ty w
hil
e
l
ower
i
ng t
he
o
vera
ll
cost structure.
>
D
eliver a Best in
C
lass
C
ustomer Ex
p
erience. Deliverin
ga
c
ustomer ex
p
erience across all customer touch
p
oints that
resu
lt
s
in l
o
w
e
r
c
h
u
rn
a
n
dfe
w
e
r
cus
t
o
m
e
r
ca
r
eco
nt
ac
t
sa
n
d
e
scalated com
p
laints
.
>
T
ransform Technolo
gy
S
y
stems to Support Revenue, EBITDA,
a
nd Churn Objectives.
C
ontinuin
g
the transformation of our
technology capabilities to deliver
f
lexibility, improved time to
market
f
or new products, and a superior online experience.
3