SunRocket Apparently Shuts Down

SunRocket Inc., which in recent weeks has been sending out mixed signals about its prospects for the future, has apparently closed its doors.

Reports of this news are circulating in the media just a week after the Vienna, Va.-based company laid off a quarter of its work force.

An e-mail to the CTO resulted in the following reply: Thank you for your e-mail. The recipient is no longer an employee of SunRocket. A call to the corporate communications office netted the standard, The number you have reached is not in service message. Another call to the customer service line got this: We are no longer taking customer service or sales calls goodbye. Yet, it appears that visitors to SunRockets Web site still can order services over the Internet.

And as recently as this April the consumer VoIP provider told xchange and New Telephony it would introduce enhanced applications such as multimedia emergency calling and even video sometime in 2007. It said it wanted to avoid troubles associated with being a pure-play VoIP provider.

Also in April, the 3-year-old company said it had more than 200,000 customers. And, a month prior, it introduced a cordless VoIP phone with the help of American Telecom Services Inc. (ATS).

SunRocket was privately held, so it does not have to explain whats happening at the company, which is backed by Doll Capital Management, BlueRun Ventures and the Mayfield Fund. Calls to those private equity firms, as well as VoIP analysts, were not immediately returned.

Bruce Hahn, CEO of phone maker ATS, said his company is not affected by SunRockets closure, as ATS spotted SunRockets ills months ago. ATS uncovered management, directional, billing and process problems within SunRocket during the first quarter of 2007, so it instead partnered with Primus Telecommunications Lingo division, a healthier, public company, Hahn said.

We saw some difficult times coming and therefore minimized any exposure we had by redirecting our efforts, he said.

Its ironic that SunRocket crashed and burned while rival Vonage Holdings Corp., embroiled in a nasty patent infringement case with Verizon Communications Inc., has remained afloat. As speculation of Vonages imminent demise swirled earlier this year, industry insiders touted SunRocket as a solid model that companies such as Vonage should emulate.

SunRocket was founded by two former MCI Inc. executives. The company made its name as a provider of unlimited VoIP calling to and from the United States, Canada and Puerto Rico for $199 per year. And for a time, it was second only to Vonage. Then, this spring, TeleGeography Research released a report that found SunRocket couldnt keep up it was seriously trailing the likes of Time Warner, Cablevision and Comcast Corp. Even as SunRocket boasted about serving 200,000 subscribers, that didnt even come close to Vonages 2.4 million.

Other VoIP providers are rescuing SunRocket customers stranded by the shut down.

Nuvio Corp., which distributes through resellers, is offering SunRocket subscribers its new Safe Landing plan of $199.99 per year as a replacement service. Safe Landing provides unlimited local and long-distance calling, but only within the United States. Vonage is giving SunRocket users two months of free service when they port their numbers to Vonage and sign up for the companys U.S. Residential Premium Unlimited Plan.

SunRocket ran an affiliate partner program.

BlueRun Ventures
Doll Capital Management
Mayfield Fund
Nuvio Corp.
SunRocket Inc.
TeleGeography Research
Vonage Holdings Corp.

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