Sun Rocket Refugees - Flat Planet or Vonage?

I'm not a SunRocket watcher, but it's not hard to see the stories about their imminent demise, and recent flight of their executive ranks.

This is a classic reality check sign, as the dominoes start to fall with TDM-style offerings that simply run out of gas. No need to get into the details, as it's plain for anyone to see that the market just can't support services like this for long. Vonage can still survive because they got their first, and in this game, that counts for a lot. They've got the critical mass of customers, and a monthly cash flow to keep their IPO float money intact. Unless they spend it all on marketing, but that's another conversation.

Anyhow, I found it interesting how Vonage didn't waste any time wearing an ambulance-chaser suit, putting out the word last night that they were there for SunRocket customers who are now without service. Hey, it's a very competitive market out there, so this shouldn't come as a surprise. Sure, Vonage is under a microscope of its own with the Verizon case, so they have to be careful too. I guess, for a change, they get to be the big fish going after smaller prey when opportunity knocks. That's fair, but I'm sure the same will happen to them if Verizon has their way in the courts. It's a bit like the oldest sibling beating up on the middle sibling. Well, guess who the middle sibling is going to beat on when the time comes? The youngest one. No different here.

That said, Vonage is offering a pretty good transition, although it's not clear what constitutes a "qualified" phone number that would be ported over them from SunRocket customers. In a perfect world, as their press release touts, "sunny" days are ahead, so long as this happens as advertised. I suspect it won't be that easy in all cases, but all we know is that there are a couple of hundred thousand subscribers looking for service now. And I'm sure they won't be the last casualty in this space, although, after Vonage, they were arguably the second largest VoIP pureplay in the U.S., and that's got to make many of the smaller pureplays just a little bit nervous now.

I think the big takeaway here is where these customers will end up. SunRocket will be a very short footnote in the annals of VoIP, and I could never figure out their model. For all those customers who have prepaid for service, you have to wonder how that's going to play out.

Going to Vonage would be an easy answer for these customers if they wanted to stay with what they had. But how many will come back to their traditional telco? How many will go to their cableco? How many will succumb to the bundle? To me, this will be a real acid test for which way market sentiment is blowing these days. My guess is that the cablecos will be big winners, further validating not just their bundle, but also the perception of them as a reliable provider of voice services.

Well, there's one more alternative, folks - the Flat Planet Phone Company. Regular readers will be familiar with Moshe Maeir, who is usually on the money with his provocative ideas. Well, his post explains why SunRocket refugees would be better off with his flat rate plan - more reliable service and way more features. Well, he's got a point, and as VoIP subscribers get nervous about who might be next, this could be as good an alternative as any.


Technorati tags: SunRocket, Jon Arnold, VoIP, Vonage, Flat Planet Phone Company