Vonage

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Vonage Comments on Recent Court Proceedings, Outlook for Appeal and Market Overreaction

Company Confident in Appeal

HOLMDEL, N.J., March 26, 2007 /PRNewswire-FirstCall via COMTEX News Network/ -- Vonage reaffirmed its confidence in prevailing on appeal and in continuing to meet the needs and expectations of its over 2.2 million subscriber lines despite a ruling March 23 in Verizon's favor and a disproportionately-negative reaction from the market.

"To paraphrase Mark Twain, the rumors of Vonage's death have been greatly exaggerated," said Mike Snyder, Vonage's chief executive officer. "Friday's events represented one small step in what is sure to be a long legal battle.

"The fact is we've been preparing for this verdict and the possibility of an injunction for months," Snyder added. "For the market to react the way it did to the recent rulings shows an unfortunate lack of understanding of the judicial/appellate system, a lack of appreciation of Vonage's resourcefulness, or, perhaps, both. Anyone who's counting Vonage out is making a huge mistake."

If, as expected, the judge enters a permanent injunction against Vonage on April 6, 2007, but fails to grant the company's request to stay the injunction pending its appeal, Vonage will immediately file for a stay with the Court of Appeals for the Federal Circuit. In addition, the company reconfirmed its plan to file a notice of appeal to the Circuit Court of Appeals to set aside the jury verdict which was handed down on March 8, 2007.

"No matter what happens on April 6, the reality is this litigation is going to take years to make its way through the legal system," said Sharon O'Leary, Vonage's executive vice president and chief legal officer. "We are optimistic the trial court judge will stay the injunction. If he doesn't, however, we're very confident the Circuit Court of Appeals will stay the injunction through the entire appeal process.

"And once the case is up on appeal, we are confident that the appellate court will overturn the verdict based on the faulty claim construction of the patents involved." The Circuit Court of Appeals, which will hear the case shortly, has reversed prior verdicts involving flawed claim constructions approximately 40 percent of the time, noted O'Leary. Verizon's overly broad construction of the patent claims was adopted across the board which is unprecedented, given the large number of claim terms.

Vonage's accomplishments continue to validate its business model and strategy. The company has achieved 19 consecutive quarters of double digit revenue growth, doubled revenues to $607 million in 2006 alone, and added nearly 1 million net subscribers last year.

"We're continuing to innovate and provide reliable, affordable phone service to millions of customer lines. And that isn't going to change," Snyder added.

About Vonage

Vonage (NYSE: VG) is a leading provider of broadband telephone services with over 2.2 million subscriber lines. Our award-winning technology enables anyone to make and receive phone calls with a touch tone telephone almost anywhere a broadband Internet connection is available. We offer feature-rich and cost-effective communication services that offer users an experience similar to traditional telephone services.

Our Residential Premium Unlimited and Small Business Unlimited calling plans offer consumers unlimited local and long distance calling, and popular features like call waiting, call forwarding and voicemail -- for one low, flat monthly rate. Vonage's service is sold on the web and through national retailers including Best Buy, Circuit City, Wal-Mart Stores Inc. and Target and is available to customers in the U.S., Canada and the United Kingdom. For more information about Vonage's products and services, please visit http://www.vonage.com .

Vonage Holdings Corp. is headquartered in Holmdel, New Jersey. Vonage(R) is a registered trademark of Vonage Marketing Inc., a subsidiary of Vonage Holdings Corp.


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Safe Harbor Statement

This press release contains forward-looking statements regarding Vonage's financial position. In addition, statements in this press release that are not historical facts or information may be forward-looking statements. The forward-looking statements in this release are based on information available at the time the statements are made and/or management's belief as of that time with respect to future events and involve risks and uncertainties that could cause actual results and outcomes to be materially different. Important factors that could cause such differences include, but are not limited to, our history of net operating losses and our need for cash to finance our growth; the competition we face; our dependence on our customers' existing broadband connections; differences between our service and traditional phone services, including our 911 service; uncertainties relating to regulation of VoIP services; system disruptions or flaws in our technology; our ability to manage our growth; the risk that VoIP does not gain broader acceptance; and other factors described in the "Risk Factors" section of our registration statement on Form S-1, as amended (File No. 333-136773), and in our subsequent periodic reports filed with the SEC. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, and therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today.

SOURCE Vonage

Brooke Schulz, Vonage, +1-732-528-2627, brooke.schulz@vonage.com
http://www.vonage.com/

Copyright (C) 2007 PR Newswire. All rights reserved

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