Can AARP Really Add to Vonage Growth?

Do retirees use VoIP phones? This is not meant to be a bash against older people at all, but it is meant as a legitimate question. News was issued by Vonage Holdings Corp. (NYSE: VG) that it has entered into a new relationship with AARP to offer members a unique discount offer on its home phone service. The problem is that this was telegraphed with its earnings back on October 31.

As far as why this matters, it would seem that a traditional AARP member is still married to the landline telephone that they have had since before they can remember. Vonage is offering AARP's more than 37 million members a unique discount offer on Vonage home phone service with international long distance calling. This also targets AARP members living in the United States or internationally.

The World AARP Member Plan is offered at $21.99 per month, plus taxes and fees. Vonage is also offering a 15% savings exclusively for AARP members with unlimited calling to more than 60 countries with a savings of $590 on average when compared to major carriers.

Vonage's total subscriber lines were recently listed as follows:

• 2,365,524 as of 9/30/2012

• 2,356,084 as of 6/30/2012

• 2,388,721 as of 9/30/2011

As far as what to expect from this, well it seems that the market is still not willing to assign much of a premium to it at all. Shares are down a penny at $2.26 on the day with light trading volume. Vonage has traded in a 52-week range of $1.63 to $3.16 and its market cap is $499 million.

JON C. OGG

Filed under: 24/7 Wall St. Wire, Telecom & Wireless Tagged: featured, VG