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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."
Till then, SunRocket VoIP is alive an well
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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.
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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".
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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 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'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 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...?
Why not go with a real VoIP provider? A SIP provider like les.net? I've been using that service for a long time now. Termination (ability to call PSTN) is separate from DID (PSTN calls you), so you do not even have to worry about monthly charges if you have a local phone number because of DSL or something. Yes, some places do not allow you to have an unbundled service. :(
Of course, Packet8 or other, less technical solutions are available.
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.
Easy, talk to your credit card company and dispute the charge (I paid $199 for 1 year of service, and the company went belly up after a month.) American express cards tend to be the best for this (6months since charge is where it starts to be a problem), but any CC should easily refund you the money w/n a couple months if you were just charged last month. Personally, in the vain hopes that sunrocket is in fact moving me to something else, I'm waiting to see what happens before I dispute the charge/mentall take the loss. The phone line works, and as I'm now living in England... Well, I'd like to keep an american phone line, and signing up for a new company isn't the easiest thing to do.