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Internet Phone Start-up Goes Belly-Up
westlake writes "The New York Times has a short piece on the failure of SunRocket, the second-largest internet phone service after Vonage, with 200,000 customers. Start-ups like SunRocket are under enormous pressure from the telcos and cable, which have marketing muscle and can bundle VoIP with Internet, TV, home security services, and so on. The start-up has only one product, and since they don't own the lines, they can't control the quality of service. Attracting subscribers can put a start-up deep into the red. Vonage added 166,000 subscribers in the first quarter of 2007, but lost $77 million."
It seems almost impossible for smaller service providers to provide high quality service cheap enough to attract new subscribers and still compete/advertise, etc. Good luck! This type of business requires savy subscribers to start up, and lost of them.
Till then, SunRocket VoIP is alive an well
The simple truth is that interstellar distances will not fit into the human imagination
- Douglas Adams
I'm guessing the SunRocket customers will be moved to Vonage.
I wouldn't worry about Vonage so much. They have 2.4 million subscribers already. Plus, it's not as if the cable company or telcos offering VOIP service have that much more control over the quality of their service either. They're still stuck with the same problems everyone else is in regard to Internet traffic.
For not having control over their traffic, I've been using Vonage for almost 3 years now over Comcast in Michigan and now Bright House Networks' Road Runner service in the Tampa Bay area and I have to say, the quality of service has never sucked so long as my Internet connection is working right.
My blog
..... Can VOIP providers who aren't connected with a Telco make a go of it? So far it seems that the answer is no seeing that Sunrocket i dead and Vonage is not exactly healthy either.
This is my opinion. To make sure you don't steal it, it's covered by the DMCA.
Things we learned
1. Don't let a 3-year-old name your company
I'll never forget Leo Laporte laughing about the business model of Dialpad on "The Screen Savers" back in 1999. The idea of giving free phone service away, with no real way to recoup their money, was laughable even in those heady days of "internet 1.0". The model has improved only slightly in the "internet 2.0" era, I'm afraid.
SJW: Someone who has run out of real oppression, and has to fake it.
What could a third party VOIP telco really do to make a more reliable service when they don't control the line. Here's my idea, have a protocol that automatically detects dropped packets, and lowers the bitrate until there's not so many dropped packets, or none at all. Personally, I'd rather hear someone at 8 kbps then hear them at 128 kbps with every other word dropped from the conversation. It might sound like a bad kids walkie-talkie you bought at Walmart, but it's better than dropping words. And if you explain to your users why they are getting bad audio quality, and recommend ISPs in their area that don't have problems with maintaining good connections, then you can help to give the big telcos a reason to give good service to their customers.
Also, make all the features free. Call waiting, call answer, call forwarding, call filtering, and whatever other features you can think up. Telcos charge a lot of money for these extras. By making them free (including them in the monthly rate), you're offering customers a big incentive switch from the other guys. And since most of these features cost very little once they are initially developed, it's a wonder why you would even want to charge for them.
Anthropic principle: We see the universe the way it is because if it were different we would not be here to see it.
I have broadvoice and on a regular schedule Verizon happens to "lose" the routing information to my local Broadvoice phone number. It just magically disappears and suddenly people calling my phone get a "this number can not be dialed" message.
I end up calling broadvoice letting them know and they have to jump through hoops to get Verizon to quit acting like a 3 year old and put the routing info back in. This happens twice yearly. I also hear of it happening elsewhere as well with providers other than Broadvoice.
Telcos are scared to death of Voip. It sounds way better than cellphones so the current generation see it as great. They also see the $13.95 a month compared to the $49.95 a month from a telco and it's a no brainer. (Yes My VoIP line costs $13.95 a month. Yes Verizon charges $50.00 a month for a basic, every call costs you $0.03 + long distance charges phone line.)
So the telcos screw with the Voip providers, "accidentally".
Do not look at laser with remaining good eye.
Attracting subscribers can put a start-up deep into the red. Vonage added 166,000 subscribers in the first quarter of 2007, but lost $77 million."
I'm not surprised - Vonage gave me $200 to sign up (CC Giftcard)for a year at $14.95/month; netting them $80 (assuming they paid full price for the CC card and don't kickback anything to CC for the signup)for the year. I was nice, I didn't take their free PAP I simply canceled my existing Vonage service and activated the new number on my existing PAP. Strange way to run a railroad; but I'll take the cash, thanks.
The upside is I like their service - it works great from Europe so I avoid expensive calls; to Europe it is a wash at the basic level but if you call a lot it is cheaper with the unlimited calling.
There are other solutions now, but when I first signed up they were the only plug and play solution.
I'm a consultant - I convert gibberish into cash-flow.
That sorta ruins the point of VOIP. You know, being able to choose your phone provider.
"I think an etch-a-sketch with an ethernet port would beat IE7 in web standards compliance."
Vonage added 166,000 subscribers in the first quarter of 2007, but lost $77 million.
The turnover rate for Vonage is very high from what I've read. Is that added subscriber number on top of their pre-existing user base or is it just what they added in the first quarter? They could be hemorrhaging faster than they can bring in.
I suppose SunRocket should have followed the wise words of Homer Simpson.
"You tried your best, and you failed miserably. The lesson is: never try."
"...since they don't own the lines, they can't control the quality of service..."
If you didn't get your DSL through Ameritech, (the only game in town around here,) you were pretty much guaranteed that your DSL service would be down at least 2 weeks straight every other billing period. Nothing your ISP could do about it except stall, hoping Ameritech would fix "the lines." At the very least, I think Ameritech was sandbagging, at worst, and I believe the worst, Ameritech was deliberately shutting off service.
Much as I hate the cable company, I have a cable modem (and a prepaid cell phone) now. Screw Ameritech.
More music, fewer hits
This is worrisome. I've been really happy with my service--I signed up on a "buy one year, get the second year free" deal, so it's about $8/month for service. When I hit the Sunrocket website, http://www.sunrocket.com/, it doesn't seem to have changed. They're still asking for business, and there isn't any mention of this story. The only difference that I notice is that when I log into my member page, there's a message that says "Voicemail is currently not available." But again, no mention of ceasing operations or anything else. I guess we'll just have to see...
I am/was a Sunrocket subscriber. Everything was really great, one year and 9 months of everything just working for $200 a year. Right now the phone still works, I can call and be called by people. However, the voice mail is gone both the message box on the website and the ability to leave messages when calling me (it just rings forever). I'm guessing all my old messages are toast too. When calling customer service (800-786-0132) you get a message the last part in an almost robotic voice,
... We are no longer taking customer service or sales calls. Goodbye."
"Sunrocket! The no Gotcha phone company!
Well I am out 2.5 months service, I guess they learned how to "get" me.
I have been a SunRocket customer for almost a year now and the service has been awesome. In addition to the much cheaper rates than Vonage, the voice quality IMHO was excellent in spite of "not controlling the lines" as well as the customer service. Bye SunRocket. :-(
I've been a subscriber to Vonage for a few years now. Although I am happy with their service, I don't use the phone that much, so SunRocket's package that was something like $9.99/month for 200 minutes was very attractive to me and for the past couple of months I have been meaning to change my service to them. Every week I keep telling myself, "Ok, this week I will move from Vonage to SunRocket", but the procrastinator in me kept putting it off. Now I'm glad I didn't change.
Moral of the story: Procrastination pays off.
World of Anime
I have AT&T CallVantage, their VoIP offering, against my will. My employer installs and pays for it.
It is SHIT.
The voice quality is average at best. The reliability is horrendous. At any time and for any reason the entire service drops out - nothing no dialtone, nothing. Inbound calls route straight to voicemail about 50% of the time.
AT&T's tech 'support' is very simple - they tell you the only thing to do is to install he TA in front of the router behind the cable modem. But the Centillium MTA-1 is a locked down box and it's configured as a NAT device so it fucks up my Homelan every time someone looks for a DHCP refresh. So I have to put it behind the router instead and because of that tech 'support' won't 'support' it. It also consumes a great deal of bandwidth - about 128k. That's a LOT for quality that isn't crystal fucking clear. That's the same as two ISDN channels and for that much bandwidth I should be able to hear you sleeping on the other end.
Phone companies will kill VoIP just like they have killed everything else. They'll crush all comers and then do what they do best. Fuck up the service and rape the customers.
So what little I've been able to figure out about them, it's a standard recipe startup. They got a management team put together. Their idea wasn't really an innovation, they just changed the price structure and payment schedule for phone service. They banged out a moderately flashy website and a brand. Technically they are about average at best. The scheme seems to be if you can grow fast enough, you can either survive or bail out. I simply cannot see how they were building a long term company. So they have 200,000 subscribers, most aren't married to long term contracts so the value isn't as high as it could be for selling the company. Assuming they are all at the cheapest subscription, that's $40m a year in revenues which is no laughing matter. you can sustain a fairly large group of people on $40m a year. How were they burning that?
Could they not get more VC? I mean a $40m stream of revenue is compelling. How much more do they need to profit? It seems like if they were in it for the long term, they could have burnt less or shut the burn down and continued to grow more slowly. I've worked at a handful of startups and you won't believe the amount of work we did to make a few million dollars a year. We're they selling service cheaper than they were buying it? I don't know the numbers for telcos but at 200,000 users, they should be able to work intelligently and at least sustain, maybe not get rich but if you can't stay cash flow even at that point something seems wrong, what do you need? 10% of the US subscribing?
What is the big deal? If you are not relevant to the market you are trying to serve/benefit-from you are out. It is as simple as that.
Nothing much here. Move on.
Bought into the service in Feburary, spent two months trying to get it to work.
Got nowhere.
Called up and canceled, got a pro-rated refund, but also got to keep the gizmo and free phone. Back in April.
After a lot of debugging, it seemed to me they were robbing Peter to pay Paul. My gizmo would connect without error 50% of the time, giving me a dial tone, but not enough time to make a call (it re-connects every 30 seconds).
If you complained enough they would make changes on their end that would give you better service, but it seemed to me they didn't have enough reliable servers up and running to handle their clients.
I got out with the loss of venture funding and apparent lack of future at Sunrocket. Our line's voicemail is now non-functional so I've switched over to another VoIP service that's offering an incentive to Sunrocket customers. It was a great service while we had it and I'll miss the free European calls. I dearly hope the new service will provide service as well as Sunrocket did. But I've got a cell phone so the landline was merely a convenience.
VoIP is still a new market and to expect companies to not go under is to ignore normal business conditions. I was surprised Sunrocket went under but its been clear for a long while that they all won't survive.
On Vonage, I too have heard they lose lots of people and the cause (as I understand it from forums) is poor customer service and difficulty in getting out. They will continue to lose customers until they realize the value of quality customer care, or go out of business entirely.
I run a free directory whose main purpose is to allow people to find each other via old information (lookmeup.org) The service could help people find ex-Sunrocket subscribers via their old phone numbers. Anyone know the best way to inform Sunrocket users?
I gotta say I'm very sad about this. Sunrocket was awesome, I was paying $15/month for them, and I never had any problems with their service.
I guess now we all gotta figure out what to switch to... apparently http://www.viatalk.com/ offers to take on any Sunrocket customers at $200/year.
So this is (was) the #2 VoIP company behind Vonage? So why is it that I've never even heard of them?! Granted, I've never actually gone shopping for VoIP service. But I am involved in the telecomm/datacom industry, so you'd think I would have at least heard the name.
Perhaps lack of visibility was part of their problem...?
Basically, there's not one bigreason SunRocket went under, but rather a few smaller reasons that added up. The main one being that there was too much focus on bringing in management from the outside (mostly from AOL) instead of promoting from within. Also, employee retention was a big problem. When you start seeing early employees of the company quitting or getting fired, it's very demoralizing to those still there.
I ended up leaving after I was involuntarily transferred to another department (which was supposed to be temporary, but my requests to go back to my previous department were ignored), I had a director-level non-techie jerk that had been hired from outside SunRocket placed as my immediate supervisor, and they decided to blow hundreds of thousands of dollars on network monitoring software when we in the process of doing the same thing with Nagios and/or OpenNMS & saved big money.
To all of the former customers of SunRocket, as well as anyone considering hiring a former SunRocket employee: just about all of the non-management folks (especially the support personnel based in the US, & the technical groups) were the most competent group of people I have ever worked with, and the majority of them did care about providing the best VOIP service possible.
OK, so now that sunrocket's "24-7" customer service line promptly hangs up on you, WTF do we do about getting a refund? they just charged me last month $199 for my renewal.
... as long as there is the last-mile monopoly.
the SnR on my Qwest DSL line varies enough that i'll go days at a time with line-retrains every 3 minutes due to "crc_error threshhold exceeded". Years ago, I ditched the ISP supplied product ( an ActionTec 1524, which tended to hard-lock every 36 hours, and didn't support basic features like _port forwarding_ properly ) and got a cisco 678 off of ebay. I've called before and the gist is somewhere between "we're not seeing any problems here" and "it must be on the inside of your house".
Yeah - it must be, since the wire coming into my house goes directly into the back of my Cisco 678 and there's nothing else attached at all.
I'd love to axe my ties to the traditional phone co (i've been cable & tv free for a couple years) but short of a low speed long range wireless ISP, I need them because they own the cable in the ground, and really have no incentive to make my internet connectivity reliable. I can't see VoIP ever taking off when some other company owns the rights to their buried lines (and your property), and has no incentive to provide a good product/service.
My opinions are my own, and do not necessarily represent those of my employer.
I'm a SunRocket customer. Appears my service isn't working anymore. Does anybody know how to unlock the gizmo so I can use it with a VoIP provider like les.net?
Yesterday, we remarked at my house that the phone was down. We felt it a temporary issue and left it at that.
Today, we found out that the service was down because the company was dead. We didn't find out from anyone at SunRocket, we found out on Slashdot. On SLASHDOT! And so far, no luck in contacting support about "Hey fuckers, we just paid you, how about a fucking refund!?".
I think we got gipped.
Let's stop dilly-dallying and just change "-1: Overrated" to "-1: Disagree" or "-1: Doesn't Subscribe to Groupthink".
What happens when Netcraft dies?
Get your Unix fortune now!
...you can charge everyone else rent to use them, so all the VOIP providers have a problem. But that doesn't even come into play here; thanks to the wonders of deregulation we are right back in the Bad Old Days of unregulated monopoly; the telcos simply don't carry--or distort--traffic they don't like.
On a mostly unrelated note, parent post led me to the OpenNMS web page, and in turn the OpenNMS "live" demo... which appears to have been Slashdotted or something. In its smoking crater is now a lovely error message:
.java:802) .java:802) .java:802)
org.apache.jasper.JasperException: FATAL: sorry, too many clients already
at org.apache.jasper.servlet.JspServletWrapper.handle JspException(JspServletWrapper.java:510)
at org.apache.jasper.servlet.JspServletWrapper.servic e(JspServletWrapper.java:375)
at org.apache.jasper.servlet.JspServlet.serviceJspFil e(JspServlet.java:314)
at org.apache.jasper.servlet.JspServlet.service(JspSe rvlet.java:264)
at javax.servlet.http.HttpServlet.service(HttpServlet
at org.apache.catalina.core.ApplicationFilterChain.in ternalDoFilter(ApplicationFilterChain.java:252)
at org.apache.catalina.core.ApplicationFilterChain.do Filter(ApplicationFilterChain.java:173)
at org.apache.catalina.core.ApplicationDispatcher.inv oke(ApplicationDispatcher.java:672)
at org.apache.catalina.core.ApplicationDispatcher.doI nclude(ApplicationDispatcher.java:574)
at org.apache.catalina.core.ApplicationDispatcher.inc lude(ApplicationDispatcher.java:499)
at org.apache.jasper.runtime.JspRuntimeLibrary.includ e(JspRuntimeLibrary.java:966)
at org.apache.jsp.index_jsp._jspService(index_jsp.jav a:53)
at org.apache.jasper.runtime.HttpJspBase.service(Http JspBase.java:97)
at javax.servlet.http.HttpServlet.service(HttpServlet
at org.apache.jasper.servlet.JspServletWrapper.servic e(JspServletWrapper.java:332)
at org.apache.jasper.servlet.JspServlet.serviceJspFil e(JspServlet.java:314)
at org.apache.jasper.servlet.JspServlet.service(JspSe rvlet.java:264)
at javax.servlet.http.HttpServlet.service(HttpServlet
at org.apache.catalina.core.ApplicationFilterChain.in ternalDoFilter(ApplicationFilterChain.java:252)
at org.apache.catalina.core.ApplicationFilterChain.do Filter(ApplicationFilterChain.java:173)
at org.extremecomponents.table.filter.AbstractExportF ilter.doFilter(AbstractExportFilter.java:49)
at org.apache.catalina.core.ApplicationFilterChain.in ternalDoFilter(ApplicationFilterChain.java:202)
at org.apache.catalina.core.ApplicationFilterChain.do Filter(ApplicationFilterChain.java:173)
at org.opennms.web.AddRefreshHeaderFilter.doFilter(Ad dRefreshHeaderFilter.java:73)
at org.apache.catalina.core.ApplicationFilterChain.in ternalDoFilter(ApplicationFilterChain.java:202)
at org.apache.catalina.core.ApplicationFilterChain.do Filter(ApplicationFilterChain.java:173)
at org.opennms.web.StoreRequestPropertiesFilter.doFil ter(StoreRequestPropertiesFilter.java:71)
at org.apache.catalina.core.ApplicationFilterChain.in ternalDoFilter(ApplicationFilterChain.j
if I call tech support I tell them I've got my cable modem plugged directly into my Windows XP
And that's why they say nobody on their networks uses Linux, so it's not worth supporting.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)