Will Vonage's wireless services strategy succeed?

Vonage is planning to offer wireless services in second quarter of 2007. Since Vonage has been facing stiff competition from cable companies in VOIP space, it is looking to diversify its service offerings, and provide a bundle of services, and essentially become an MVNO that provides mobile services along with VOIP. We all know successful MVNOs including Virgin Mobile, that just play in mobile space.

MVNOs are about brand, and a segment of the user base to which carrier does not want to market or support. Virgin Mobile plays to the young audience and offers phones targeted to that segment of the market. Vonage is going to offer services to general consumers and small businesses, and that is very price sensitive market. Vonage will compete with the likes of Comcast, that provides all the services what Vonage is thinking of providing. If Vonage can not add any other differentiators to its service, it will have hard time selling its service.

Other than bundling its VOIP software on mobile phones, Vonage will have to provide other mobile device management functions and mobile applications that make the user's life easier. I would love to see applications like easy location based content share.