VONAGE® TO SELL ITS LEADING BROADBAND TELEPHONY SERVICE AT COMPUSA

Vonage is now available in Over 8,000 Retail Outlets Within North America

Edison, N.J., December 21, 2004 - Vonage Holdings Corp., the leading broadband phone company, today announced CompUSA will offer Vonage's service in all of its 200 plus nationwide stores throughout the United States and online at www.compusa.com.


High -speed Internet customers, who have a standard telephone, can sign up for Vonage service by purchasing one of two Vonage starter kits at CompUSA, featuring Linksys devices. These devices will allow customers to make calls in the U.S. and Canada for one low, flat monthly rate starting at $14.99. The devices are competitively priced and offer the consumer a $50.00 mail -in rebate, ninety days after the Vonage service is activated.

"CompUSA's national roll -out of Vonage's service is evidence of the transformation of the telecommunications industry and the need to make broadband telephony more readily available to the general consumer market," stated Dave Goodwin, vice president, Retail Sales Channel for Vonage. "We are looking forward to a successful sales relationship with one of the nation's leading retailers of technology equipment."

What is Broadband Phone Service?

Broadband phone service works by turning voice calls into data packets and sending them over the Internet. When the data packets approach their destination, they are reassembled, and delivered in the form of a traditional call. Vonage customers require only a high -speed Internet connection, a broadband telephony terminal adapter or router and a regular home telephone to utilize the service.

The company offers rate plans, ranging from $14.99 for residential customers to $49.99 for small businesses. All rate plans include a full set of features, including caller ID, call waiting, voicemail, call forwarding, and emergency calling service. In addition, Vonage offers a number of enhanced voicemail and area code selection features:

Voicemail: Vonage offers three options for checking voicemail: you can dial into a menu and listen over the phone; listen to voicemail online, or listen to voicemail in your email box (a .wav file will be sent to your account).

Area Code Selection: Vonage customers can choose any area code, regardless of location.

Vonage's technology offers substantial benefits to customers, including:

· Huge cost savings

· Increased functionality

· Improved call quality

· Free calls to other Vonage subscribers

· Improvements in employee productivity and mobility

· Service portability, wherever broadband is available


The company continues to enhance its service and features.

"The introduction of Vonage fits perfectly with the CompUSA Digital Services strategy," stated Daniel Perrone, director of Consumer Services. "The world is different than ten years ago when electricity was the only service necessary to power the electronics that the consumer purchased in our stores. Broadband now is the electricity of today's consumer electronics. Layered on top of that broadband pipe are all of the complimentary services, like broadband telephony, that our customers are looking to CompUSA to explain and assist in the sign -up process."

About Vonage®

Vonage is redefining communications by offering consumers and small businesses an affordable alternative to traditional telephone service. The fastest growing telephony company in North America, Vonage's service area encompasses more than 2000 active rate centers in over 130 global markets. Vonage is sold directly through www.vonage.com and retail partners such as SAM's Club, Amazon.com, RadioShack, Best Buy, Circuit City, Staples, Fry's Electronics, CompUSA and Office Depot. Wholesale partners such as EarthLink, ARMSTRONG®, Advanced Cable Communications and the Coldwater Board of Public Utilities resell the Vonage broadband phone service under their own unique brands. With more than 300,000 lines in service, Vonage continues to add more than 30,000 lines per month to its network. Over 10 million calls per week are made using Vonage, the easy -to -use, feature -rich, flat rate phone service. Vonage is headquartered in Edison, New Jersey. For more information about Vonage's products and services, please visit www.vonage.com or call 1 -VONAGE -HELP. Vonage®, Vonage Digital VoiceTM, Toll Free PlusSM and Virtual Phone NumberSM are trademarks of Vonage Holdings Corp.

About CompUSA

CompUSA, Inc. is one of the nation's leading retailers and resellers of technology products and services. CompUSA now offers its customers a complete lifestyle solution with the recent addition of a digital entertainment department, blending its expertise in technology and home entertainment for a one -stop solution. CompUSA currently operates 229 CompUSA Superstores in over 90 major metropolitan markets across the United States and Puerto Rico that serve retail, small -to -medium businesses, corporate, government and education customers and includes technical service departments. Many of the stores include classroom -training facilities. CompUSA also operates a web site that offers an assortment of over 120,000 items at www.compusa.com.

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