Former AT&T Exec Tabbed to Run Vonage
Marc Lefar, the former chief marketing officer of Cingular (now AT&T Mobility LLC ), has been named the new CEO of Vonage Holdings Corp. (NYSE: VG), replacing interim CEO Jeffrey Citron. (See Vonage Names New CEO and New Vonage CEO Next Week?)
Lefar comes to Vonage with experience solving one of the company's biggest problems -- churn. While at Cingular, Lefar helped reduce the company's churn -- the rate at which subscribers leave the carrier -- by nearly 50 percent. He is also responsible for launching the carrier's well known "Raising the Bar" advertising campaign that helped triple the subscriber base.
Reducing churn at Vonage will be critical. The company's subscriber defection rate continues to climb due to poor service quality and customer service and now stands at 3.3 percent as of March 31, 2008. (See Vonage Reports Q1.)
But while Lefar certainly has experience in that area, he has never run a public company before. Prior to his role at Cingular, he worked at Verizon Wireless and GTE Wireless. He most recently founded Marketing Insights, a technology and media consultancy firm.
While reducing churn will be crucial, first and foremost, Lefar will have to help eliminate the $253 million of debt Vonage accrued during the string of patent lawsuits brought against it last year by Verizon Communications Inc. (NYSE: VZ), AT&T Inc. (NYSE: T), and Sprint Corp. (NYSE: S).
That debt is set to mature in December. While the wheels have been put in motion to refinance the debt, nothing is set in stone just yet. (See Vonage Takes Step Toward Recovery and Vonage Commits to Refinance.)
Meanwhile, current CEO Jeffrey Citron will remain with the company as chairman. Citron founded Vonage and was the company's chairman and CEO until he relinquished the CEO title to Michael Snyder. Snyder stepped down last April and Citron reassumed the CEO role until now. (See Vonage CEO Leaves; Job Cuts Begin and Departing Vonage CEO May Get $1.2M.)
After going public with an IPO price of $17 in May 2006, Vonage's stock now sits at $1.44.
— Raymond McConville, Reporter, Light Reading