Posts Tagged ‘SunRocket’

Mobile phone for granny, new industry research reports, another SunRocket antidote

Monday, July 23rd, 2007

Pass me the Alka Seltzer. Last week’s news glut left me hung over. I feel like unless I can report on Harry Potter texting he-whom-we-are-all-sick-to-death-of on his Apple iPhone, what can I possibly have to say?

But at some point we have to get back to real life.

So here’s a virtual cool compress for your forehead in the form of some news you may have missed because of last week’s SunRocket wipe-out and Harry Potter and the Deathless Hype.

Last week UK firm Communic8 launched its Emporia Life mobile handset for elderly people, with user-friendly features like extra large buttons and display, super-loud volume (including the ringer), and a big red pre-programmable emergency button. BBC News story reports that retailers are snubbing the gizmo and are being accused of “ageism” by advocates for the elderly.

AT&T’s endorsement of openness for the 700MHz spectrum that will open up when analog TV goes away shouldn’t be a surprise. It’s a shrewd move for AT&T to tell Google in effect “put up or shut up.”

AT&T has been in the communications and consumer service business for more than a century. Google’s in the…search engine and advertising business. OK, they bought Grand Central. Forwarding calls doesn’t make Google a phone company. Whatever you feel about “Ma Bell,” give them credit for understanding the mandates of the voice communications business.

Kevin McLaughlin of CMP Channel offers insight into how another software behemoth is doing in the telecom business. Microsoft’s small business phone system, Response Point, evidently left VARs at a Microsoft Partner Conference less than enthusiastic. One described it as “semi-functional.”

The IPTV smorgasboard peeking over the horizon may be the oncoming train of an out-of-bandwidth Internet backbone. Wes Thompson of TVtechnology.com offers analysis.

Mobile email is the next big cash cow for service providers and network operators, according to joint report by open source software company Funabol and Frost & Sullivan.

Industry analyst Infonetics has a bouquet of free whitepapers including ones on indoor cell phone coverage and the evolution of VoIP over wireless LAN in the enterprise.

http://www.infonetics.com/services/green.shtml?whitepapers/whitepapers.shtml

Picking up the SunRocket pieces: VoIPVoIP is offering a BYOD pay-as-you-go deal for SunRocket refugees.

Patent Trolling: Rates Technology is now suing Qwest over VoIP patents. The Long Island company already has Vonage, Nortel, and Google feathers in its troll cap.

I can’t close without a Harry Potter comment. So here goes: Philip Pullman’s trilogy — His Dark Marterials, the first book of which, The Golden Compass, appeared contemporaneously with the first Potter book — is far more complex and compelling than Rowling’s septet. And it ends before your interest in it does.

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Packet8, Others, Picking up the SunRocket Pieces

Tuesday, July 17th, 2007

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.”

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More on Vonage

Monday, March 26th, 2007

While the dust is still settling about the Vonage injunction it’s still premature to say that VoIP-as-we-know-it is over.

That’s the view of SunRocket’s Brian Lustig.

’It’s important to note that every Internet phone service provider has their own distinct architecture for their network,” he says. “It’s constructed differently, done in its own unique way. So each provider has to do their own analysis.”

The bottom line: “It would be inappropriate to assume that what applies to other [VoIP] companies applies to all companies.”

SunRocket recently signed up its 200,000th customer. Not perhaps in Vonage’s league, but healthy four-fold growth since 2006. The company is taking a “strategic” approach to growth, says Lustig. “It’s a deliberate strategy to keep costs in check.”

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Crazy SunRocket

Tuesday, November 21st, 2006

Remember Crazy Eddie, the discount electronics company that advertised on late night — or should that be ‘nite’ — TV in the 70s? Every ad ended with him screaming “Our prices are in-saaaane.”

Looks like SunRocket is taking a page from the legendary retailer’s book. The company is offering a second year’s service free when you sign up for the company’s $199 Annual Edition 12-month calling plan.

The catch – the offer is “today only.”

Let’s see who follows the Pied Piper in this latest lap of the race to zero.

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It’s the Technology, Stupid

Wednesday, September 20th, 2006

Cable giant Comcast’s announcement today that it has hit the 1 million mark in “digital voice” customer subscribers won’t be construed as good news by the hundreds of “single-play” service providers that used to view Vonage and its $300 per customer marketing campaign as the New York Yankees (or Manchester United for you fans of real sport) of VoIP.

At first glance, it appears that yet another deep-pocketed entrant is trying to scoop up customers by spending millions in marketing — a hard act to compete against.

Perhaps, though, there’s a different way to view Comcast’s self-professed success, a way that shakes smaller VoIP players out of the no-win hole they have inadvertently dug for themselves.

The key is actually right in the Comcast marketing message, which I have now probably heard on the 24-hour news station my car radio appears to be stuck on about a thousand times. The message is simple: cable TV, internet access and unlimited telephone calls bundled together at $33 per service. The pitch is, of course, the technology (in the form of bundling), not the price.

There are plenty of players out there offering unlimited phone calls for about $20 a month, and they are having a tough time picking up more than a handful of new subscribers a week. Comcast is getting thousands and openly advertising a 65 percent price premium.

Is there something to be learned from this? Of course: technology trumps price.

And when it comes to technology, the smaller VoIP providers have a huge advantage over slow-moving dinosaurs like Comcast.

Unfortunately, it’s an advantage they don’t use out of misplaced fear.

Go to any of the established VoIP providers’ web pages and you’ll see they all say the same thing: “Save money.”

Go to the Cingular and Verizon pages and you’ll see a different message: “Get the latest toy.”

There are plenty of amazing toys for VoIP coming out daily, but you would never know it by hanging out on Vonage’s, BroadVoice or SunRocket’s pages. They try to sell you on price, which is a sure-loser of a tactic in a race to zero against wealthier foes.

To make matters worse, many of today’s smaller providers do everything in their power to discourage use of anything but the functionally limited analog device they send out to new customers. Use their device, hook up an old telephone to it, and that’s it. Don’t try to use your snazzy new WiFi phone, or, worse, connect to the service through powerful PBXes such as Asterisk or Communigate Pro. They don’t support it and are so paranoid of people actually using their service to make more than the average number of calls, they won’t even give you the basic information required to make it work.

When Jeff Pulver’s FWD service first started gaining traction (well before the kings of software and music piracy at Kazaa “invented” Skype as a proprietary FWD clone), the possibilities for VoIP seemed endless. Pulver envisioned a communications future shaped by innovation, creativity and community. Unfortunately, the service providers did everything in their power to stifle the fast-moving status-quo disrupting world Pulver and his band of early pioneers were helping to create.

Innovation? Too hard to support. Creativity? Takes too much time. Community? Where’s the money in that?

Now, if they want to survive, service providers need to go back to the pioneering ways. A major change in direction is in order. Stop packaging VoIP service as something that will save customers pennies a day and works exactly like their old phone does. The new approach needs to encourage the use of VoIP because it is infinitely more powerful than what we’ve used for 100 years.

We’ll use your service, we’ll even pay a bit more for it. But let us use it in the way we choose, with the device (or, even, multiple devices) we choose. New hardware or software comes on the market? Jump on it, don’t run away from it.

There’s a world of people out there ready to embrace change. This world’s the future of VoIP. And unless today’s service providers become part of it and soon, it will be Comcast’s world to rule.

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