A few days ago, I signed up for Vonage’s Internet-based telephone service. Simply enough, I was tired of paying high phone bills. Why not pay only $24.99 per month?

With such prices, it’s no surprise that Vonage is growing at breakneck speed. Apparently, the company has in excess of 1 million subscribers and, of course, a strong consumer brand.

But in order to maintain any sort of competitive edge, Vonage needs a strong infrastructure. So yesterday, the company announced a deal with Sonus Networks (Nasdaq: SONS).

Sonus specializes in building the complex “guts” for Internet protocol (IP) communications networks, for both wireless customers, such as Sprint (NYSE: S) and Cingular, and wireline carriers, like AT&T (NYSE: T).

One key reason for Vonage’s choice is Sonus’ deep experience in managing billions of VoIP minutes per month. Sonus ensures quality in calls transmitted, providing carrier-class reliability (99.99% reliability) and voice quality.

Right now, Vonage is using Sonus technologies only in New York and Los Angeles, but the company intends to expand that use into other metropolitan U.S. cities, as well as foreign markets.

Sonus’ stock price was up only $0.12 to $4.23 on the news. Then again, the company has had choppy performance. In the third quarter, for example, Sonus lost $2.7 million, or $0.01 per share, which compares to a profit of $10.3 million, or $0.04 per share, in the year-ago period. During this period, revenue fell from $46.8 million to $45.7 million.

Basically, Sonus is in a fiercely competitive sector. Rumors are that its major customer, Cingular Wireless LLC, is thinking of switching over to Lucent (NYSE: LU).

So while snagging Vonage is a big coup, it appears that investors are still more concerned about existing customers going to the competition.

LAS VEGAS — The press room here at CES is sponsored by Verizon. (Contrast that with the Monorail for the Convention Center, which is owned by Sprint Nextel and features a Sprint Nextel store and Wireless Lounge.)

Verizon has its new Motorola-manufactured HD DVR on display here. Those are available to subscribers of Verizon’s cable service, delivered over FiOS, its fiber-to-the-premises solution. That service is currently available in a handful of markets in the southern and eastern US.

According to the booth dude (no babe, sorry), the telecom has plans to “aggressively” continue expansion of its FiOS service into new markets in 2006 and beyond, although he was unable or unwilling to provide specifics on who exactly could look forward to 30Mbps Internet service. (Here’s a hint: I won’t, since I live in SBC AT&T land).

Verizon’s HD DVR will act as a complete media server and will be able to network with PCs in your home to deliver images and music wherever your network reaches: the living room, bedroom, or PC room.

One other cool product Verizon has on display is a combination VoIP cordless phone/DSL router/WiFi access point with a 7″ color LCD touch screen. Owners of the phone, which will first be available to current Verizon DSL subscribers for US$149, will be able to access services such as weather and movie listings via the touchscreen. Plans call for the phone to be made available to non-Verizon customers later in the year, but that model will lack the DSL router, instead relying on already existing broadband to operate.

Linksys’ Sipura team has developed a very cool IP-PBX that will support 4-16 stations per box. I got to see it a few weeks back, but protected the embargo, waiting for the press release to move.

Linksys developed this new PBX based on the smarts from Sipura who came over in the 2005 acquisition. Like PhoneGnome, it’s based on that SIPURA ATA technology, but with a lot of multi-line new and cool technology wrapped around it.

In many ways the concept reminded me of the Merlin system that AT&T rolled out right after divestiture back in the 80s as that took business away from the Bell’s Centrex platform. Well with this new system Linksys is looking to take business away from telcos current PBX business by moving it all to IP. That’s smart.

To sell it, Linksys has lined up VARs around the world (1000 or so at last count) and plans of working with them to deliver and install the equipment. That could be one of two Achilles heals with it though. Since most on premise networks in small business are running DSL, and with the bandwidth of DSL lines on average 256k on the upload, once you get past two or three simultaneous calls, add in a big file upload or download there comes the need for more bandwidth. And there comes the second rub in my mind.

While the VAR’s may be good at installs, VoIP is a different animal, so Linksys will have to really train and manage that channel the way parent CISCO does their reseller network. If Linksys can do that, they they have a winner. But if the VAR’s don’t work the way Cisco’s do, then this really neat and market needed device may not get the traction it needs.

Bottom line is I think Linksys’ team has something that will sell well, be it through the VARs or even CDW, Staples or Office Max. The IP-PBX’s launch is well timed and sorely needed. But since Linksys is not selling the end user’s overall experience that the VARs create, they will need to make sure they have that potential land-mine in check. Based on my meeting and what I heard, I think they will, but like all things VoIP, time will tell.