SunRocket Postmortem: Virtual Everything Means No One Really Gives A Damn

From NYT:

Start-ups like SunRocket and Vonage, the largest and best known of the group, tend to offer only phone service, and they do not have the ability of the larger companies to ensure quality of service because they do not operate their own telecommunications lines, said Richard Greenfield, a media analyst at Pali Research in New York. “They only have one product and they can’t control quality,” Mr. Greenfield said, adding that the business is “extremely challenging.”

So they leased their lines, outsourced their call center, and except for an office in Vienna, VA, were for all intents and purposes, a virtual operation.

Beware doing business with companies that have no fixed assets (remember Amp’d?). Makes it much easier for them to treat customers like a one-night stand.

Crazy, though. SunRocket was the number 2 VoIP provider after Vonage.


Edit Your Comment

  1. not_seth_brundle says:

    “Beware doing business companies that have fixed assets.”

    I think you are missing a “with” and maybe a “no.”

  2. sonichghog says:

    Yes, Fixed assets. Like MCI and Enron…….

  3. xamarshahx says:

    They actually had really great CS, until upper mgmt screwed everyone at the end.

  4. LTS! says:

    This is just another example of how a business can screw people. Because it was VOIP and stretched the confines of the usual business model does not mean it teaches any new lessons.

    Sunrocket offered service at a ridiculously low rate. There was very little chance they would be able to stay in business. Regardless of that, the executive management made a decision to scuttle the company and that process has happened many times previous in all facets of business. It’s not the first or last time employees will show up to work to find out they have no job or that a business just shuts its doors with no warning.

    Being decentralized and having a low fixed assets does not make it any more probably as the stakeholders of the company still must answer for lost services, broken contracts, etc. In fact, if they owned everything then shutting it down would produce less fall out as there would be less leased contracts to deal with.

    Customers who are getting screwed here played a fine line and lost. From most accounts Sunrocket was a very solid company with good service, until a change was made. However, they were attempting to run on the economical edge with their pricing and undoubtedly that was going to leave them on the short end.

  5. My office was VOIP shopping two months ago and Sunrocket looked attractive because of pricing.. but we researched them some more and found out they had bad customer support.

    I’m glad we didn’t go with them… but ATT Callvantage, the service we DID go with, is a service in it’s infancy and definitely not ready for Business-grade customers.

    Customer Service and tech support is fast and friendly, but they can’t do ANYTHING for you. Suggestions go unanswered and ATT doesn’t know how to communicate within their company. Callvantage is still treated like a different entity from the entire company.

  6. xamarshahx says:

    Just found out the bastards charged me twice in Oct and Jan, it was on my dad’s CC so I didn’t notice and he thought it was right charges. AHHHHH!

  7. JohnMc says:

    XMARKSHAX actually has it right. As I recall their current CEO has a less than reputable background as a asset stripper. How sad. People don’t want to build companies the old fashion way anymore — get customers, keep customers and provide a competive product @ a fair price. Tsk…

  8. beyond says:

    Just imagine how those 300 employees feel. You are inconvenienced with paid for service you didn’t receive and the hassle of finding new phone service, but they just found themselves jobless! The average employee there probably lost more in a day’s wages than it cost the average consumer in lost service.

    Somehow I bet their lovely CEO, Lisa, isn’t hurting for cash though.

  9. ghettoimp says:

    I had Sunrocket for slightly over a year. I only lost out on about a month of service, so I’m feeling pretty fortunate. The shutdown could definitely have been handled better, e.g., give me some warning and let me establish a new provider, but I guess them’s the ropes.

    While it lasted, it was a very nice service. It was easy to install and remarkably cheap, and I didn’t experience any severe reliability issues. I also really liked that their prices included all the taxes and fees and shipping, since my previous service with AT&T was quite different in this regard.

    I’m guess going to try Viatalk now. To attract Sunrocket refugees they’re offering free shipping (with the code SHIPFREE), but you still have to pay their stupid activation fee and apparently they’re somewhat backed up on equipment orders at the moment, so I don’t know how long it will take.

  10. dmolavi says:

    i posted this comment in another SR story here, that got much less visibility…BUT, for those of you that want to move to BYOD providers (ViaTalk, for example, won’t charge the 29.95 activation and 9.95 shipping if you BYOD), check out [] for the admin passwords for your gizmo. you can “unlock” them (turn off autoconfiguration/provisioning) and take them to another provider.

  11. bohemian says:

    Any bets on how long Vonage stays going? We recently dumped them. Dealing with customer service was just such a hassle, our rates kept creeping up and we got free digital phone from our broadband provider.

    When Vonage was new I tried talking a few people into getting it because were were really happy and it was cheaper at the time than digital phone service. Most people totally glazed over when you mentioned hooking up a router and that there was no onsite technician. This will continue to keep non tech types from adopting it.

  12. SSC says:

    Please, LTS!, allow this gentle rebuttal to these points:
    > Sunrocket offered service at a ridiculously low rate.
    As opposed to the “fair” $50/month POTS service from Verizon?
    > Customers who are getting screwed here played a fine line and lost.
    Customers chose a service with both added-value and substantial savings over common carriers and lost because [emphasis]worse-is-better[/emphasis].
    I concede that you (LTS!) are entirely correct, otherwise.
    (signed) A future Sunrocket unsecured creditor

  13. theblackdog says:

    Screw ViaTalk, I don’t trust them simply because it’s Sunrocket that’s suggesting we use them. I went online and switched to Vonage, it only cost me $1, and that was for the county and state tax. This is including getting new equipment and free shipping, and two months service for free. They’re even porting our number over.