Failed SunRocket passes off customers to other VoIP carriers

New providers may not have exactly comparable services

SunRocket has folded and given its 200,000 customers the names of two other VoIP carriers that can step in to provide phone service.

SunRocket, the VoIP provider that went out of business last week without telling its customers ahead of time, has designated two other carriers to pick them up.

Unified Communications and 8X8 have both agreed to pay the liquidators of SunRocket a fee for each of SunRocket’s 200,000 customers that they sign with.

It’s not a smooth transition for customers, because they have to pay monthly fees to these other providers. Also, they may have to wait a long time to recoup money they paid SunRocket for the long-term contracts the company required.

SunRocket is obligated to pay off customers on equal footing with other creditors, but that might not cover 100% of what it owes.

Other service providers are coming to the rescue as well, without official standing as part of the SunRocket liquidation. For example, IP5280 Communications in Englewood, Colo., says it will pick up whatever small-business customers SunRocket had. It will waive its $49 activation fee, and promises to have the business customers up and running within five days. SunRocket was primarily a residential service provider.

VoIP competitor Nuvio announced that it would extend to SunRocket customers a $199-per-year, all-you-can-eat domestic calling plan called Safe Landing, similar to one of SunRocket’s plans.

SunRocket started up business about three years ago and seemed to be well regarded in the venture capital community from which it drew a total of about $80 million, the last round coming last fall.

After the company lost its founders in February, it had layoffs in June, indicating the company was in trouble. But it had been ranked No. 4 among VoIP providers Vonage, AT&T and Verizon, all household names.

The final closure of the company came last week with no warning to customers. Many found out when their service failed and nobody answered the help line. Eventually SunRocket sent out e-mails notifying customers of the shutdown and alternative carriers that might pick up their service.

Copyright © 2007 IDG Communications, Inc.

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