SunRocket appears to fold, VoIP service in doubt

Start-up’s market share was No. 4 behind Vonage, Verizon, AT&T

VoIP start-up SunRocket succumbed to slow customer growth to more aggressive Vonage, Verizon, AT&T and cable TV providers.

VoIP start-up SunRocket appears to be shut down, pointing up the continuing woes of companies trying to make a buck exclusively out of IP voice services.

The 3-year-old company doesn’t answer its phones, and news reports say the company is shifting its mainly residential customers to other carriers.

The company’s service line says it isn’t accepting service or sales calls, but its Web site still accepts service signups.

The company’s market share was ranked No. 4 among VoIP providers, behind Vonage, Verizon and AT&T, and had about 200,000 customers.

But the customer base wasn’t growing fast enough, and there were earlier signs of trouble. Most recently, SunRocket laid off about 30 employees, roughly a quarter of its staff. At the time company officials said it was trying to cut expenses and was considering the possibility of seeking further outside funding.

The company was running on $80 million in venture funding, the most recent round last fall for $33 million.

Then in February, co-founders Joyce Dorris and Paul Erickson -- both formerly of MCI -- left the company to work on another venture.

Vonage is the most high-profile of the VoIP start-ups, and its strategy calls for heavy marketing and advertising. It is also embroiled in a patent suit with Verizon.

SunRocket was more focused on niche markets, and in January had put forth at penny-per-minute plan for calls to many Asian countries, targeted at immigrant communities, such as those in Washington, D.C., and Baltimore. The service to other Asian countries ranged up to 13 cents per minute.

That plan followed on a calling plan for India announced just three months before.

At the time the Asia calling plan was announced, Dorris described the company as being in high-growth mode. She left a month later.

SunRocket offered unlimited U.S. domestic calling for a flat $199 per year. The service required customers to have a broadband Internet connection and to install a VoIP converter.

On news of troubles at SunRocket, VoIP competitor Nuvio Corp. announced that it would extend to SunRocket customers a $199-per-year, all-you-can-eat domestic calling plan called Safe Landing.


Copyright © 2007 IDG Communications, Inc.

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