Competitors Swarm To Stranded SunRocket Subscribers

By Greg Scoblete On Aug 6 2007 - 6:00am

SunRocket's disgorgement of 200,000-plus subscribers has VoIP firms small and large salivating over the prospect of adding sought-after users, but it has also raised new fears about the technology's viability in the face of increasing competition.

Officially, SunRocket's liquidators have tapped 8x8 and TeleBlend (a subsidiary of USA Telephone that acquired SunRocket's VoIP assets) to transition the now defunct company's subscribers over to their respective networks.

8x8 said it would waive its start-up costs and offer a month's worth of service for free for SunRocket customers making the switch. TeleBlend is offering a 12.95 a month unlimited calling service to the duration of a SunRocket users contract. TeleBlend will also work with existing SunRocket equipment.

According to 8x8, SunRocket will communicate with its 200,000-plus subscribers through several emails and a voicemail campaign and suggest they sign up for 8x8's residential VoIP telephone service.

According to 8x8 CEO Bryan Martin, the firm has also made arrangements with its network operator to speed the porting of SunRocket phone numbers onto the 8x8 network.

"We've already seen many thousands more new subscribers," said Huw Rees, sales and marketing VP, 8x8.

Other VoIP providers not officially aligned with SunRocket's liquidation are nonetheless dangling offers in front of their stranded customers. Vonage has offered to waive activation and hardware costs for former SunRocket users and has seen a sharp up-tick in customer acquisitions, said chief marketing officer Jamie Haenggi.

Smaller firms such as ViaTalk and Lingo have also offered to pick up SunRocket's abandoned users, with ViaTalk offering a contract buy-out.

While acknowledging the negative publicity of the SunRocket implosion, VoIP providers did not believe the episode would seriously harm the pure-play market.

"I think it is a cautionary tale, but hopefully this will make consumers do additional due diligence" when shopping for a provider, Rees said. Public companies, like Vonage and 8x8, provide a degree of financial transparency to help users vet prospective providers, he added.

"We were worried about how consumers would react," Haenggi said. "I think the way they handled the shut-down was a disservice to the industry. A phone is a person's lifeline."

That said, Haenggi doubted that SunRocket's demise would sour consumers on VoIP. "I don't think this is about pure-play VoIP. Other companies like AOL and Verizon have been in and out of this market. It's more about business models, infrastructure and scalability."