Marc Lefar - Chief Executive Officer John Rego - Chief Financial Officer Leslie Arena - Vice President of Investor Relations

Clay Moran - Stanford Group Company Michael Rollings - Citi Investment Research

Good day, everyone and welcome to the Vonage Holdings Corporation's third quarter 2008 earnings conference call. Just a reminder, today's call is being recorded. At this time for opening remarks and introductions, I would like to turn the conference over to Ms. Leslie Arena, Vice President of Investor Relations. Please go ahead, ma'am.

Thank you, operator. Good morning and welcome to our third quarter 2008 conference call. Speaking on our call this morning will be Marc Lefar, Chief Executive Officer and John Rego, CFO. Marc will provide us perspective since joining the Company and review our accomplishments for the quarter. John will review our financial results. The slides that accompany this discussion are available on the Investor Relations website. At the conclusion of our prepared remarks, we will be happy to take your questions. As referenced on slide two, I would like to remind everyone that statements made during this call that are not historical facts or information may be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These and all forward-looking statements are based on management's current beliefs and expectations and necessarily depend on assumptions, data or methods that may be incorrect or imprecise. Such forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. More information about those risks and uncertainties is contained in Vonage's SEC filings. We caution listeners not to rely unduly on forward-looking statements and we disclaim any intent or obligation to update them. During this call, we will be referring to non-GAAP financial measures. A reconciliation of the non-GAAP measures to most directly comparable GAAP measures is available in our earnings release which is posted on the site. And now I will turn the call over to Marc.

Thank you, Leslie. Good morning, everyone and thank you for joining us on our third quarter earnings call. When I joined Vonage roughly 12 weeks ago, I spoke to you about the growth opportunities that attracted me to Vonage, my outlook on the marketplace for additional voice and internet telephony and my belief in the Company's unique business model. Today, having had an opportunity to drill into the business, I remained firm in my belief that Vonage had the potential to be a vibrant, profitable business. We face significant near-term challenges. Dramatic improvement in operations and rapid acceleration in growth will not happen quickly, but I am optimistic that we can improve the yield on our marketing investments, enhance the performance of our distribution channels and improve the quality of our core product while further reducing costs. Before we review our results for the quarter, I would like to spend a few minutes sharing my observations and action plans after my first three months from the job. During the first weeks, I spend a great deal of time with frontline employees and customers. I listened to dozen of live customer calls with our call center agents, reviewed hundred of letters and emails and held over a dozen small group meetings with employees. What I learned was truly enlightening. There is no doubt that Vonage have a dedicated and motivated workforce that wants to win. Despite the challenges that the Company had faced over the past two years, the key was energize and ready to do what is necessary to succeed and while our teams are very proud of the 76% of customers who stated that they cannot envision changing their service from Vonage, our employees also understand where we have failed to deliver against our customer expectations. The market opportunity remains robust and digital voice penetration is still less than 30% of broadband households. We provide a strong value proposition. Our pricing ranges from 15% to 20% below our competitors comparable offers even against the voice component of most bundles, we provide meaningful savings after promotions expire and we have a number of unique features that customers love. We simply have not done a good enough job of communicating the differences and making it easy for shoppers to become customers. The fundamental profitability of our customer base is strong. Our incremental pre-marketing operating income margins are approaching 60%. This is a good business. That said, there are four primary areas where we have either not executed satisfactorily or we have not provided adequate resources that truly fix the fundamentals. First, our on boarding processes for new customers are not sufficiently reliable to ensure a satisfying experience. In fact, early life churn, those customers who canceled service within 31 to 90 days is a 180 basis points higher than those in the following nine months. Interestingly, a large number of these customers are not complaining about the quality of the service itself. They simply could not get properly activated and registered on the network. These issues range from problems related to number porting, to device delivery, to installation procedure and sometimes, information provided during our own sales process. When we do get these customers into the hands of our most highly skilled agents, we find that we can remedy the vast majority of issues over the phone many times in one call. As a result, we have recently established a dedicated team. The mission of which is to radically simplify the on boarding process and to ensure that each customer we have sold is up and running quickly. An improvement in this area would not only improve churn by roughly 10 basis points but it would help to improve our gross add yield as well. Many of the same issues that are experienced by early life churners are causing returns among customers at their first 30 days. As you know, these returns are simply netted against gross ads. So, fixing the on boarding process will not only improve churn but will also improve our gross ads and slack. Fixing the on boarding process is a major priority for the Company. It is not an overnight fix. Some of these efforts require significant changes in our core processes with strategic partners where we are already seeing improvements and we expect significant benefit in 2009. As we discussed on our second quarter call, our key customer service metrics of first call resolution and customers sat continue to show improvements. In the third quarter, FCR and customer sat were 74% and 86% respectively but we still have work to do in enhancing the technical knowledge of our agents, improving IVR call flows and providing better information through our tool sets. The second area of enhance focus is the quality and reliability of our network products and core operational platforms. While the majority of our customers are highly satisfied with the performance of our service, we still have a large opportunity to improve further. With better prioritization of resources and clear accountability, we can and we will identify quality issues much earlier and remedy problems before they are noticeable by our customers. Despite the fact that some quality issues are driven by problems with our carrier partners, better early warning signs and proactive trouble shooting are already improving the customers' experience. Unfortunately, this is an area where we have not adequately focused in the past. Beyond this, we are revisiting the features of our enhance services to ensure they work exactly the way customers expect that they are easy to set up and to modify. Lastly, we must improve the reliability or uptime for our core internal platforms that allow us to sell, provision and service our customers. There is no silver bullet through this churn and I know that this has been mentioned in the past. However, we now have very specific initiatives and accountable individuals to execute against our plans. We will not waver from our focus and execute it well. These activities will have an material improvement on churn during the coming year. In order to better align resources with our most critical needs, we have also decided to delay the integrated rollout of broadband with Covad. In addition, the Company will apply mobile resources only on applications-based products that are highly consistent with our core offerings. We will not let this distract us from our pursuit of operational excellence. There is tremendous growth and financial upside in our primary business. We simply need to execute better. Specific programs, accountable leaders, defined resources and measurable results will be the cornerstones of a back-to-basic approach in the New Year. The third area of focus is distribution and marketing effectiveness. Notwithstanding our less than exciting subscriber growth in recent months, we do have a phenomenal opportunity to grow. We have over 650,000 sales prospects that proactively inquire about purchasing service every month with our telesales centers and our online store and our retail partners continue to express their desire to help us build this category. However, our close rates are unacceptably low. There is a large variation in the success of our inbound telemarketing channels. Optimization of our partner mix, enhanced agent tools, trainings, scripting and better consultative selling should drive dramatically enhanced close rates. Our online platform requires a significant overhaul. Over service is ideal for an online shopping experience but we believe that dramatic improvements in our web presence will enhance satisfaction, increase close rates and reduce slack. While the online store represents roughly 30% of gross ad today, we plan to shift this mix substantially over the next 18 months. As I have mentioned, our flow of prospects remains quite solid but it does not mean that it cannot improved and those that do express interest in our services need to be better educated and better ready to buy. I have spent a fair amount of time over the first couple of months reviewing our advertising messaging and media plans. For competitive reasons, I will not get into the specific enhancements that you will see in the next several months but it is clearly evident that our current advertising is tired and overly complex. It contains no less than a dozen separate messages and customers still do not fully understand what we do, why it will work well for them and why they should choose us versus competitors. New commercials will be simpler and will provide more targeted messaging for key segments such as value seekers, international users, feature lovers and frequent business travelers. Our media strategy and plans were also being reevaluated. In the past, our strategy has been dominated by a direct response, remnant inventory buying strategy. While there is a place for this approach, the pendulum had slung too far and we are not successfully reaching and engaging our best prospects. Finally, we need to tighten down our non media marketing investments. Unproductive sponsorships and legacy agreements with fees and commissions well above market rates must be phased out or eliminated. Legacy sponsorships, those that will be expiring this year represented roughly $15 of slack in the third quarter with little positive impact on gross ads. I believe strongly that improvement and distribution in marketing can meaningfully increase gross ads in 2009 versus 2008 and I believe we can do this without any material change to our spending levels. Our fourth area of focus is cost structure optimization. We have made great strides in the cost of telephony services in recent years. As mentioned previously, these improvements, along with an improved G&A discipline, had allowed us to generate incremental margins on incremental subscribers or PMOI of 59% but we have more work to do. There are opportunities in all aspects of our business including third party contracts, customer care vendor and exciting optimization, customer self service and further vigilance in G&A spending. As we progress into 2009, the senior leadership team will be laser focused on improvement in these four areas. We know that we must get this business growing again and we will do it profitably. Let me also take a moment to talk about the debt transaction. John will go through the details. I want to start by saying that the refinancing of the $253 million in convertible debt was a tremendous undertaking in one of the most challenging credit environment in history. Even companies with the highest credit quality found it nearly impossible to obtain financing. The funding, which was completed on November 3, provides us with financial stability and allows us to place our full attention on running the business. The agreement does require strong management discipline to meet certain lender requirements but I do believe that we have sufficient flexibility to invest in the growth of our business even in the highly competitive market. Now, let us move on to the results for the third quarter. Operationally, the quarter was slightly below our expectations. John will look to details but total revenue for the quarter was $226 million, a 7% year-over-year increase and a 1% sequential decline from $228 million. We increased our net line additions from the second quarter but are not growing at the pace we need to. Although it is difficult to isolate the individual variables, we believe that the economic slowdown partially offset some of the churn reduction that we would have seen from our customer care improvements. Net loss for the third quarter of 2008 narrowed to $8 million or $0.05 per share, down from $12 million or $0.08 per share excluding charges a year ago. We delivered record level pre-marketing operating income or PMOI of $91 million and adjust the operating income of $12 million in the third quarter. This is the fourth consecutive quarter of positive and consistently increasing adjusted operating income. These two metrics demonstrate the stability and the potential of our business model and we are pleased with our continuing progress in these areas. In summary, my first twelve weeks have been very productive. We are already making improvements that will position us well for 2009. The core business model and marketing opportunity remain robust but we believe we do have a great deal of work still ahead of us. Our problems our largely of our own making but they are fixable. We are working aggressively but our performance will not improve overnight. With the completion of the refinancing, the Company can fully focus on positioning the business for future profitable growth. Now, I would like to pass it on to John Rego to go through the detailed results for the quarter.

Well, thank you, Marc. The results in the third quarter were generally mixed; there are a number of metrics that clearly demonstrate that the underlying performance of the business is strong. Beginning with slide three, we continue to effectively manage our cost structure and as a result, our reporting of our fourth conservative quarter of positive and increasing adjusted operating income. This number, which is operating income before depreciation and amortization and share based expense, was $15 million compared to a loss of $1 million excluding certain litigation and severance expense a year ago and $12 million sequentially. Additionally, on slide four, you will see that we generated a record high pre-marketing operating income or PMOI. PMOI, which reflects the cash flow generated from our existing customer base, increased to $91 million, up from $71 million X charges a year ago and $87 million sequentially due to improving scale and cost reductions. On a per line basis, PMOI was $11.55 in the third quarter, up significantly from $9.53 in the year ago quarter. Incrementally, we generated $16.25 of PMOI. This number, which excludes marketing, cost of good sold and equipment and shipping revenue translates to a 59% margin on service revenue of more than $27. Clearly, the customer base generates significant cash and margins. On slide five; net loss for the quarter of third quarter of 2008 narrowed to $8 million or $0.05 per share, down from $12 million X charges or $0.08 per share a year ago. So, let us look at the details behind these numbers. Beginning with revenue on slide six; revenue of $226 million grew 7% from the third quarter 2007 but declined 1% sequentially. The sequential revenue decline was caused principally by a decrease in telephony services ARPU. Average monthly telephony services revenue per line, which is the ongoing monthly revenue we collect from our customers, was $27.52 up $0.20 from the year ago quarter driven by a benefit from the reduction in the period over which activation fees are amortized. On a sequential basis, however, average monthly telephony service revenue per line declined 1% or $0.40 principally due to promotions as well as an increasing credits granted to existing customers. In the competitive environment, promotional activity will always be a part of driving customer acquisition. In recent months, economic trends had some impact on price-sensitive customers and while we have experienced all those pressure on ARPU, we see no significant changes in service pricing and thus, continue to expect a stable pricing environment. A consistent bright spot in our results has been our ability to meaningfully reduce cost of telephony services. Moving to slide seven; in the third quarter of 2008, direct cost of telephony services was down to $7.20. We continue to aggressively manage cost, which on the per line basis just decline 33% excluding customer USF since 2004. We believe opportunities still exist to reduce cost of telephony services over the next year as we work closely with our suppliers and optimize call traffic routes. Cost of good sold increased to $21 million from $19 million on the prior quarter and $17 million a year ago as the Company assumed additional expense for customer activation charges due to the aforementioned change in amortization policy as well as an increase in wave activation fee for new customers. Direct margins fell slightly to 66% in the third quarter down from 67% sequentially. Moving to slide eight; we continue to reduce SG&A which decline from the third consecutive quarter coming in at $73 million. As the percentage of revenue, SG&A fell to 32% from 34% sequentially and 38% X charges a year ago and while we will continue to focus on improving efficiency, we do not anticipate significant changes in the level of SG&A spend over the next few quarters. On slide nine; marketing expense of the third quarter was flat sequentially at $65 million and up $3 million from the third quarter of 2007. Cost of acquisition declined $11 sequentially to $272 on the third quarter but was less sufficient than the $206 in the third quarter of 2007. As Marc discussed, we expect changes in our messaging, media mix and channel efficiency will lead to improvements in gross side yield and higher returns in our marketing investment. Gross line additions for the quarter were $238,000 down from $300,000 year-over-year. In the third quarter of 2007, gross additions were inflated by the acquisition of tens of thousands of customers who obtained the advantage after SunRocket abruptly discontinued their service. The Company had 9500 net line additions and ended the quarter with more than 2.6 million lines in service. We believe that current economic conditions have had some impact on our business. For the third quarter of 2008, our churn comes in at a reported 3%, which is flat with second quarter of 2008. Turning to the balance sheet on slide ten; cash, marketable securities and restricted cash at the end of the third quarter was $154 million, which includes $42 million in restricted cash, $2 million of which is short term used for routine business operations. Cash used for operations was $27 million driven primarily by the timing of vendor payments and transaction cost associated with the debt refinancing. The decline in cash from operations was driven by advance payments for devices to procure materials for production, timing of vendor payments and transaction cost relating to our financing. I would like to spend some time discussing the details of our debt refinancing. Let me say that we are thrilled to have completed that transaction in this challenging financial time. We worked diligently for more than a year to refinance that $253 million in convertible notes that could have been put to us this December. This financing consists of a $130.3 million senior secured first lien credit facility, a $72 million senior secured second lien credit facility and the $18 million of senior secured third lien convertible notes. The lenders under the first and second lien and the purchasers of convertible notes with Silverpoint finance, certain of its affiliates, other third party lenders and affiliates of Vonage. It is important to note that the purchase of third lien notes was only permitted if investors participated in other liens. In fact for every dollar invested in the third lien, investors with their affiliates invested several times more than that amount in the first or second lien facilities. On the run rate commencing to the first quarter of 2009, we expect our quarterly cash interest to be approximately $5.2 million and non cash or peak interest to be $4.5 million relative to the new facility. We have modeled in these incremental payments and are confident that they will not impede our future operations. We have spent the past 18 months drastically reducing the Company's cash burn and are now in the position to resume generating positive cash from our operations. In light of that, we expect to have sufficient liquidity to invest and grow the business. The details of our debt refinancing can be found in our 8-K that was filed on October 20. Now operator, let us open up the line for some questions.

(Operator Instructions) Your first question comes from the line of Clay Moran - Stanford Group Company. Clay Moran - Stanford Group Company: I have three questions. First question, I was little surprised about the economic impact on your business. You say it negatively impacted churn. I am just curious if you have a sense of where those subscribers are going? Are they going to wireless and then, does that therefore make wireless the value leader and not you guys? And then any other sense you have about the economic effect? Is there any gain that you had given that you have the lowest cost home phone service?

So, let me take the first one, Clay. First in terms of the economic effect, what we said was we believe we had a modest effect. We do get phone calls into our retention centers where folks are looking for credits. They are optimizing and belt tightening as you see in every industry. We are not hearing so much a significant number of folks canceling specifically for economic reasons but we have seen improvement in a lot of our call center metrics and some other quality metrics and we expect that this is probably a net zero gain there. We were flat on churn. We, frankly, would have expected to see a little bit more improvement during the time period. That is not a significant impact at this point in time but I think right now where the economy, it will be imprudent for me not to suggest that we are receiving some phone call that talk about it and something we will watch carefully in the future months and quarters. It is not something that tremendously concerned about. It is something we watch carefully. In terms of wireless being the value leader, we still believe that there is an off a lot of people, certainly you have seen wireless only substitution continuing. We believe that is going to continue for some period of time but we still recognize that for multi person homes. There is still a strong demand for cost effective, highly functional home phone service that allows people to use that one number across multiple users and we are not seeing as many folks or any increase in the number of folks that are canceling for wireless only. It has been steady but we have noted any material increase in the past three months. Clay Moran - Stanford Group Company: Okay, second question. The last two quarters have really shown essentially no net subscriber growth but still fairly heavy marketing expense. Does that, to me, that implies maybe that maintenance marketing is very high. I am sure you disagree but why am I wrong on that?

Well, I think that it gets a little bit of couple of items, some of which I have already talked about. One, there is a lot of marketing inefficiency and its spend is out there. In the third quarter alone, there was $15 in slack spends on legacy sponsorships. I will not get into a lot of details frankly. There are multiyear sponsorships that were entered into a long time ago but millions of dollars are being spent. We frankly are not getting our message out to customers telling of our story, engaging them and turning them into two parts of our funnel. The second issue is I think you probably will weary of the commercials that we have run. We have not had fresh advertising on air for a long period of time and our research taken make it very clear that folks still do not understand that we are in fact a substitute for your home phone service that you can use through existing home phones, that it works on your existing high speed broadband connection and we have not done a good job of actually clearing up the mess that is promotional confusion brought out by the telcos and the cable companies to help people understand where we really have significantly better value. So this is about core fundamental messaging. It is about the efficiency in the money that we do spend and then the last point is our channel of distribution. I do not know if you have visited our website lately and while it is certainly improved overtime, it is not the easiest place to shop and the online signup process takes too long and does not allow the customer to actually do the shopping and learning that they need to as quickly as they do and our inbound telemarketing channels has had a chance to visit our processes, procedures and listen to many calls there. We have tremendous upside opportunity to close better by explaining and doing more consultative selling. So, I know the purpose in the putting, Clay and I am sure that hold me the task for the results behind it but within the dollars we are spending, even modest percentage increase in yield at flat dollars spend drops tremendous numbers to the bottom line and you can look to those improvements in the coming quarters. Clay Moran - Stanford Group Company: Can you give us the sense of where you think maintenance marketing is in terms of dollars?

No, that is not something that we broken out before and I do not think we will probably start doing that. We still look at the majority of our investment however as acquisition driven. So, you should think about that the bulk of marketing spend and as you look at slack, remember that includes our distribution channel cost as well as primarily acquisition. Clay Moran - Stanford Group Company: Okay, last question. Can you share with us the one or two most restricted covenants on the debt? Thanks.

John Rego here. Clay, how are you? We have a fairly normal covenants set with these transaction. We have financial covenants that we have to hit. They are all fully disclosed and the 8-K that we did with the debt attached to it and the ones that you would expect. There is an EBITDA covenant. There is a liquidity covenant. There is ratio covenant so we feel pretty comfortable with the covenants that with us right now.

Clay, this is Leslie. You had also asked about the share base compensation expense in a separate email. It was $4.2 million for the quarter, up from $3.2 with the prior quarter. Clay Moran - Stanford Group Company: And is that in G&A?

Yes. Clay Moran - Stanford Group Company: Thanks.

Next question, operator.

Your next question comes from the line of Michael Rollings - Citi Investment Research. Michael Rollings - Citi Investment Research: Marc, I was wondering if you can just talk a little bit more. I know you talk a little bit about trying to retune the marketing and getting both churn down in the gross up. In your mind, how do you position volumes? Do you think it still works as a strong standalone product for users or do you think you have to somehow be bundled in with some other functionality or other products and then just the other questions I have is, what are you doing on the distribution side? Do you see the net and telemarketing and direct mails still the key distributions here close for you or do you think there is a retail opportunity that can work for you overtime? Thanks.

Yes, on your first question, the first question with the standalone product, we actually believe that there is a need for standalone product and people buy. In fact, to be perfectly candid with you, where I have been in the past, the bundle is nothing more than a price discount. There is no functionality that makes that bundle work anyway better for customers. So the first thing we have to be able to do is help people understand the value proposition that we have and when you cut through the clutter of some of the promotions that start low and then increase quickly and then once you got that tied up with your video service, you all of a sudden get slammed because you realize your price is going to change radically if you actually want to disconnect your voice. There is no features that keep you together. We need to make sure people understand that buying us along in many, many cases is still a lot cheaper than the voice element of the bundle and our messaging will do a fair bet to help to explain to people where you get that value. So, that is piece one and we are clearly a value brand that provide a good level of service. But the broader issue for us as we think about the long term positioning, we have the ability to basically deaggregate the number from the physical device and this idea of one number for life and a single number that allows you to be accessed wherever you are, a single number that can wring multiple phones simultaneously and the flexibility you have to use messaging from your PC to your phone and think about messaging of some that works in integrated way across multiple devices, we actually in many ways provide better bundled services that those folks who claimed to be selling the bundle themselves. So, buying service from Vonage provides you the flexibility of feature sets that is at least as good as the bundle and we have to do a better job of making sure folks understand the actual value proposition, what you get for what you pay compared to that bundle. In terms of the distribution question around inbound telemarketing and direct mail, I think that you will see from us a shift overtime in terms of percentage of the mix. Inbound telemarketing is fairly expensive but more importantly, it is not necessarily the place where a product that should be relatively simple. It is one core service. It is a couple of great plans. It has a handful of features that you want to be able to see demonstrated, set up to be able to change. It is perfect for well-driven online environment and we think if we focus on advertising and outbound messaging in a way to drive more traffic to a properly organized highly functional website not only where we will be able to do better in terms of gross ad yield and the slack that comes out of it but we are think we can get customers to use our features more frequently and they will become stickier. In terms of direct response, we still get pretty nice yield and a pretty good slack on a direct response program. The challenge there is to use sophisticated analytics to constantly ensure that we are heading to the right people with the right message and it is also been proven many times that you have to have a right kind of air cover in terms of television messaging to improve your yield on direct mail response. So we are working to try to understand those combinations a little bit better and perhaps enhance our yield and relative to retail, we continue to get this support from mass merchants. We are still experimenting with them while we are trying to figure out exactly what we can do to make sure people know, to shop us there and what kind of through put we can improve. We see large variation building by building, channel by channel and I do think retail has a long-term place in our distribution mix setting balance to distribution is very importance but is unclear how much that will be over the next 12 to 18 months. We still have some work to do there. I think the bigger shift you can think about is over 18- to 24-month period of time. We will make a consorted effort to do better job in messaging and shift the inbound telemarketing volume which is nearly two-thirds of all of our gross additions to web base channels and I think you will see that shift begin in 2009. Michael Rollings - Citi Investment Research: And just one follow up as we try to think about churn on a go-forward basis, do you have a percentage of customers that you have identified as low activity or no activity where you either have to remarket to those customers to get them active again or you run the risk of losing them?

Mike, we do look at customer usage. We do have folks who use similar phone or lines of second line. We have some that are primarily had some that are extraordinary heavy users and we do segment that. We do not see and significant need or activity to remarket the core service. What we do is based upon people's usage. We bring to them opportunities to cross sell to other features that can then drive some of that usage. That is kind of the core of what we do. So we do have that data. We do not report it publicly and we do look at it in those cohorts because it changed in the kind of marketing activities. Michael Rollings - Citi Investment Research: I am sorry one last follow up to that. Is that part of what is driving churn like when you try to identify the reasons for the elevated churn and the early life churn, is there a high correlation between usage levels or do you find it really is other factors driving the churn.

I do not think there is a terribly high correlation between the usage levels. I mean obviously somebody who is about to churn, sometimes they borrow a churn off and you do not hear about until later and if you look at their frequent usage, it is very low. But we have a lot of folks who have modest to low usage where they have got wireless service and they are using several hundreds minutes of our service each month and they use that for certain calls and they are happy with the value they get from us as well as their wireless service and we do not see a decay in their usage over a period of time. We also see folks that have very light usage. They are very long-time customers that show no propensity to churn at all. So, it really is over the factor and on the early life piece, I cannot emphasize too much. This is about, if we do not do a great job of getting the ports completed, the device in their home making sure that it is active and registered in their home and are working in the way they expect it to frequently enough means much of the churn we see in those first couple of months and remember keeping an early life churn is only in month or two since we have returns in month one and we turn it back in the first month. It is net out of gross ads. What we are seeing is that first year, we are constantly remedying problems that are related to how we got them up and running in the first place. If we get that sold, we will have the material improvement in churn.

Next question, operator.

(Operator Instructions)

Okay, thank you operator. We will conclude the call now.

That does conclude our teleconference for today. We like to thank everyone for your participation and have a wonderful day.

Thank you.