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ncum

ent p

one an

e compan

es rout

sen

echnicians to customers’ premises to initiate service. Althou

his is ex

ensive, it also can be more attractive to customers than

nstallin

their own router. In addition, these technicians ma

nstall an independent source of power, which can

ive customer

assurance that their phone service will not be interrupted durin

ower outa

he incumbent phone and cable companies have lon

tandin

relationships with re

ulators, le

islators, lobbyists, and

he media. This can be an advanta

or them because le

islative

ulatory or judicial developments in our rapidly evolvin

industry

could have a ne

ative impact on us

In many cases, we char

e prices that are lower than price

char

ed by the incumbent phone and cable companies. In addi

ion, some o

our competitors o

er low introductory pricin

owed by an increase in price a

ter a certain period o

time. W

elieve that these step-up promotions enable us to

ain marke

hare by attractin

customers who leave our competitors

ollow

these price increases. We believe that we also currently

compete success

ully with the incumbent phone and cable

companies on the basis o

the

eatures we o

er that they do no

(

such as area code selection,

ortable service, virtual

hon

numbers, and readable voice mail). We offer man

of these fea-

ures at no extra c

arge.

ess te

one compan

so compete w

ess p

one compan

es, suc

AT&T,

print, T-Mobile, and Verizon Wireless, for both our broad-

and telephone services and our mobile services.

ome consum

ers use wireless phones, instead of VoIP phones, as

eplacement for a wire line phone. Also, wireless phone compa-

ncreas

y are prov

idi

ng w

ess

roa

nterne

access to their customers. As wireless providers offer mor

nutes at

ower pr

ces an

er serv

ces t

mprove ca

lli

qua

r serv

ces

ave

ecome more attract

ve to

ouse

lds

as a competing replacement for wire line service. For example

man

wireless phone companies now offer dual mode phones,

perm

tvo

ce commun

cat

ons over a

networ

ava

ean

o not count aga

nst mo

bil

an m

nutes.

ertain wireless phone companies have also made availabl

roducts incorporating femtocells that utilize broadband con-

nections to act as a miniature cellular tower, listening for and

enhancing signals from a subscriber’s cell phone, improving cal

qualit

at a subscriber’s residence or other location.

alls con

nected via a femtocell si

nal are carried over the customer’

home broadband network allowin

the wireless carriers to offer

unlimited callin

or discounted rates for calls from home. Wireles

elephone companies have a stron

retail presence and have si

nificant financial resources. We are developin

next-

eneration

ervices to meet the emer

needs of mobile and other con

nected device users by deliverin

easy-to-use applications that

rovide si

icant cost savin

s in lar

e existin

markets. W

elieve that our e

orts will capitalize on

avorable trends includin

he proli

eration o

low or no-cost Wi-Fi and other broadban

aroun

e wor

, acce

erat

ng smart p

one a

opt

on rates, an

he growth o

social communities.

ternat

ve commun

cat

on prov

ers

so compete aga

nst esta

bli

ternat

ve commun

ion providers such as

kype,

oogle Voice, magicJack, and

ndependent VoIP service providers, some of which are larger

an us an

ave t

bili

ty to

evote greater resources to t

communications services.

ome of these service providers

ncluding Internet product and software companies, have chose

o sacrifice telephony revenue in order to gain market share or

attract users to their platform and have offered their services a

ow prices or for free. While not all of these competitors currentl

offer the ability to call or be called by anyone not using their serv

ce,

ne porta

bili

911 serv

ce, an

customer serv

ce,

future they may integrate such capabilities into their service offer

ngs. As we continue the introduction of applications tha

ntegrate different forms of voice, video, and messaging services

over multiple devices, we are likel

to face competition from

emerging competitors focused on similar integration, as well a

from established alternative communication providers

here is a continuin

trend toward consolidation of tele

communications companies, includin

the acquisition of alter

native communication providers by Internet product and softwar

companies with si

nificant resources. In addition, certain of ou

competitors have partnered and may in the

uture partner with

other competitors to o

er products and services, levera

thei

collective com

etitive

ositions. We also are sub

ect to the risk o

uture disruptive technolo

ies, which could

ive rise to si

ican

new com

etition

EMPLOYEES

As o

December 31, 2010, we had 1,140 employees. None o

our employees are subject to a collective bar

ainin

reement

AVAILABLE INFORMATION

We were incorporated in Delaware in May 2000 and chan

our name to Vona

e Holdin

orp. in February 2001. We main

ebs

with th

e add

ess

www.vona

e.co

.Th

nformation contained on our website is not included as a

art of,

or incorporated by reference into, this Annual Report on For

0-K.

ther than an investor’s own Internet access char

es, we

ake available

ree o

char

e throu

h our website our Annual

Report on Form 10-K,

uarterly Reports on Form 10-

and

rent Re

orts on Form 8-K, and amendments to these re

orts, a

soon as reasonably practicable a

ter we have electronically

ile

such material with, or furnished such material to, the Securities

and Exchan

e Commission

E ANN

AL REP

RT 2010