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Packet8 Takes a Lead 

July 18th, 2007 by Carolyn Schuk

Packet8 has inked a deal to be the preferred replacement for SunRocket subscribers left high and dry when SunRocket abruptly shuttered its business operations this week.

The deal was signed, according to the press release, with “with an organization managing the wind down of SunRocket, Inc” — presumably Sherwood Partners LLC, the company named in other news stories about the defunct VoIP provider. SunRocket subscribers can port their numbners to Packet8’s $24.99/month unlimited calling with a free month of service and no start-up or equipment costs.

In a change from the disgraceful way the company has handled its end-of-life so far, SunRocket will be calling and emailing subscribers about Packet8’s offer.



Packet8, Others, Picking up the SunRocket Pieces 

July 17th, 2007 by Carolyn Schuk

SunRocket generates more interest dead than alive. The VoIP pure-play’s skulking exit has garnered attention from MSNBC, the International Herald Tribune, The New York Times and the Washington Post, just to name a few.

Other VoIP companies are wasting no time offering special packages to stranded SunRocket subscribers. Vonage is offering two months free service. Nuvio today announced a special $199.99 plan for former SunRocket customers. As I wrote yesterday, VoicePulse has been quietly helping SunRocket subscribers stay online.

Packet8 is also rolling out its own “no startup cost” plan for SunRocket customers — offering equipment, start-up, shipping and one month of service at no cost with its $24.99/month unlimited calling plan.

“We think we can port those customers fairly quickly because we use many of the same underlying carriers,” says Huw Rees, Packet8 Vice President of Sales and Marketing.

I confess, I like this story because it contradicts the Silicon Valley catechism, where it’s an article of faith that the race is to the swift despite the received wisdom of our ancestors.

In fact, it’s looking more and more like our ancestors were right, and the fastest and most aggressive don’t necessarily get the trophy. And they don’t for reasons that are yawningly simple and straightforward.

The first is that other people’s money is not a substitute for revenue — you need to sell your product for at least as much as it costs to deliver it. The second is that controlling your own product is a more secure foundation than reselling other people’s technology.

VoIP pioneer Packet8 presents an object study in these pedestrian principles, and it’s apt that SunRocket’s sunset coincides with the dawn of Packet8’s 20th year in business and its 10th year as a publicly traded company (NASDAQ (CM): EGHT).

A longtime developer of communications chips — Packet8 components were used in AT&T ‘s Picturephone — Packet8 offered one of the first consumer VoIP services in 2002.

“Since we launched our service, we charged customers a fair price, one that lets us cover our costs and make a small profit,” explains Rees. “We priced it so it’s a self-supporting business.”

Faced with cut-throat competition like SunRocket’s $199 pre-paid two-year service deal, “we decided not to compete,” continues Rees. “We know the costs of delivering service and it was obvious that the costs were greater than that.

“We focused more marketing effort on the small business market. Once you get that right, it’s a higher margin of profit. It really bolsters the bottom line.”

That strategy paid off. With about 8,000 Virtual Office subscribers, Packet8 is the number one U.S. provider of hosted PBX services for small businesses, according to a 2007 study by telecom analyst AMI Partners.

At the same time, Packet8 never lost sight of the consumer side of the business.

“We have 100,000 consumer [accounts] and those are key because that base provides us with economies of scale — for example, PSTN termination.

Internally-developed technology is another key to Packet8’s stability — a contrast to SunRocket which licensed its technology from other companies.

“We have 68 patents in this [VoIP] technology,” Rees explains. “We co-invented the technology. Because we control the technology, [we control] quality, reliability, scalability. Over the long term, it’s helped us reduce our cost base because we don’t have to pay anybody for anything.”

All of which leaves Packet8 sitting pretty. “Last March we were close to cash flow breakeven and we’ve been improving that quarter-by-quarter,” Rees reports. “We’ve got over $12 million in the bank, $54 million in revenue last fiscal year — 67 percent over the previous year.”

Even with the SunRocket promo, Rees adds, “we’ll still make a profit and that should be good news for customers because we’ll still be in business.”



CommBytes 7/11/07 

July 11th, 2007 by Carolyn Schuk

Businesses are looking to get mobile in a big way in the next 12 to 18 months, with 60 percent having or planning a mobility strategy, according to Mokena, IL-based Nemertes Research study.

Unified communications are also high on the corporate shopping list, according to a brand new Infonetics research report. The Campbell, CA-based telecom research firm reports 21 percent growth between 2005 and 2006 for sales of unified communications applications worldwide. Further, Infonetics predicts annual growth to continue “in the high double digits” through 2010. Infonetics also reports that Avaya leads the worldwide unified messaging market in 2006, but Nortel, Cisco, and Alcatel-Lucent are gaining.

Mobio — the people who think that you don’t really want the Web on your phone, just parts of it — now lets you take Twitter, Digg and Kaboodle on the go with three new free, downloadable widgets.

Mobile applications are a natural for health care. And the iPhone is a natural for drawing attention. So Unbound Medical has recently announced that its mobile medical knowledge system now runs on the iPhone. The company has been selling medical applications for handhelds since 2000.

Ucompass is also looking for iPhone strokes for its iPhone-enabled wireless systems for educators.

Avanquest Software’s Mobile PhoneTools will now be bundled with Lenovo’s Bluetooth-enabled notebook PCs, letting any compatible Bluetooth cell phone function as a modem when it’s connected to the laptop. No PCMCIA card or WiFi hot spot needed.

Another way to send voice messages without a phone call from Buzz Interactive.

Yesterday VoIP, Inc. launched the beta of its new communications portal Click4me that lets you make VoIP calls through any browser-enabled mobile device. The portal also offers email, calendaring, and other office applications.

Pre-paid long distance provider OneSuite yesterday debuted its new hybrid VoIP/PSTN service, OS Hybrid. Like the Prius, it lets you keep more green.

Motorola gets closer to an end-to-end portfolio with its acquisition of Leapstone Systems and its content creation, management and delivery platform.

Also looking toward the content delivery game, Level 3 today announced its acquisition of broadband and mobile video management and streaming services Servecast, Ltd.

The Rumor Mill Keeps Grinding: Low-end iPhone in the pipeline? Dream on, says Newsweek’s Thomas Claburn.



Comm Bytes 7/7/07 

July 6th, 2007 by Carolyn Schuk

Software-as-a-service company Skyytek apparently isn’t listening to Gartner’s nay saying about corporate iPhone use. The company is adopting the iPhone for its mobile employees and is testing it with its on-demand ERP/CRM system, NetSuite. What’s also interesting here is ERP as a mobile phone app. Read Skyytec’s evaluation here.

Another company bringing business apps to the phone is Swedish software company HansaWorld. New offerings for the UK market for PDAs and Nokia business phones include credit card payment processing and filing your income tax.

If you’re an AT&T Pro, Elite and FastAccess customer you now have free WiFi access at any AT&T hotspot. Other customers get access for $1.99 a month. Fierce Broadband Wireless seems to think that iPhone customers are excluded.

TCM Net has launched a new channel on Voice Peering. The value proposition here is connecting calls without touching the PSTN.

Jajah for the iPhone — not! So says Scott Gilbertson of Wired.

Rumor Mill: Full 3G iPhone service by Christmas according to virtual journalist Robert X. Cringley.



CommBytes 7/3/07: Get Moving 

July 3rd, 2007 by Carolyn Schuk

Global businesses have big plans for mobile handsets. That’s according to UK research firm Coleman Parkes Research. Seven out of 10 expect to be using mobile VoIP within two years and many are already a variety of business applications. But with the new flexibility comes a whole new dimension of security and management challenges. Robert Jacques at vunet.com has the story.

But while businesses see huge benefits to mobile VoIP, mobile carriers have been circling the wagons, blocking mobile VoIP calls and writing restrictive terms into their contracts. Now UK mobile VoIP provider Vyke is fighting back with a standalone software upgrade that circumvents the removal of handset VoIP capabilities by carriers.

“The incumbent mobile network operators must be feeling very threatened by mobile VoIP,” observed Vyke Communications CEO Kjetil Bøhn in today’s press release. “In the short amount of time that this immerging technology has been in the market, they have already responded by removing VoIP capabilities from mobile handsets that they sell and by introducing very restrictive contract terms prohibiting their customers from using their networks to access services such as VoIP and third party peer-to-peer messaging clients. Vyke has been dedicating itself to circumventing these obstructionist tactics by developing our own stand-alone mobile VoIP application as well as providing access to large scale wireless networks on behalf of our customers.”

Even sweeter for customers, Vyke’s agreement last month with WiFi hotspot provider The Cloud Networks gives subscribers free access through any of the Cloud’s 9,500 UK and European hotspots.

Spanish WiFi company Fon says it has given away 7,000 routers to people living next to a Starbucks to encourage them to provide free or cheap Internet access to the ubiquitous café’s customers. Not surprisingly, the program is called Fonbucks. Mark Kapco at RCR Wireless News has the story.

Last week Truphone announced a whole slew of new features including SMS over IP for unlimited free texting, automatic WiFi network connection, and support for multiple SIM cards.

Steve Jobs has a solution for the AT&T’s sluggish Internet connection, which he outlined in a June 29 Wall Street Journal interview: “What we’ve done with the iPhone is we’ve made it so that it will automatically switch to a known Wi-Fi network whenever it finds it. So you don’t have to go hunting around, resetting the phone, flipping a switch or doing anything. Most of us have Wi-Fi networks around us most of the time at home and at work. There’s often times a Wi-Fi network that you can join whether you’re sitting in a coffee shop or even walking along the street piggybacking on somebody’s home Wi-Fi network. What we found is the combination is working really well.”

I particularly like the part about piggybacking on someone else’s home network. Sounds like the wonder boy of Cupertino lives in a separate ethical universe from the rest of us mere mortals. One where it might be OK to, say, share music online without paying iTunes $.99.

Industry disruption specialist Jajah is jumping on the Apple iPhone bandwagon to promote its mobile Jajah service. This isn’t anything new, but it’s certainly timely to remind customers — if they can get the iPhone service connected, of course — that there is an alternative to AT&T’s extortionate rates.





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