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Summary:

The good news is that Sun Rocket doesn’t have to spend any more money on e911, because they pre-built it into their infrastructure and offer it free as part of their plans, unlike others who charge extra for it. The bad news is that at $199, […]

sunrocketThe good news is that Sun Rocket doesn’t have to spend any more money on e911, because they pre-built it into their infrastructure and offer it free as part of their plans, unlike others who charge extra for it. The bad news is that at $199, there is little hope for them when it comes to making money. An excellent post over on Broadband Reports forum says that at $16.58 a month, it will be tough for the company to make money, given that many put break even for these “eat-all-you-can” plans at about $20 a month.

And since they are giving away a 2-phone system for free, which can cost around $90 in retail, the profits remain as elusive as say chances of San Francisco Giants in the NL West. In addition, they are layering it with other freebies like $3 in international long distance minutes – which the poster estimates is 100 minutes to Germany or UK. They have to be losing money on these calls, since they have to pay termination fees to carriers in those countries. An additional free number is also on the menu. Want to leave SunRocket? No problems, You can, anytime and there is no cancellation fee.

Of course, one doesn’t really know how much money the company is spending on advertising in order to snag customers. It has to be lower than the reported $300 in customer acquisition costs for Vonage. I have not seen their ads anywhere except as part of Google AdSense and a few other locations. I guess, they will have to ramp-up in order to compete, but that would make profits even more elusive. From a consumer perspective, SunRocket is truly nice service, though this morning there are sporadic reports of their service being down. Their website is down for “upgrades” they say. via

  1. We’re interested in signing up for SunRocket but — being technologically challenged, especially when it comes to telecommunications (broadband-based especially!), we’re somewhat novices. We’d appreciate any feedback. (Use our e-mail address.)

    We have two residences, one in NE Ohio, the other in SE Florida, so we’d use each of the two phones SunRocket offers in both of our homes. Questions you can help us answer: (1). How’s the sound quality? (2). Can you use SunRocket if some of the phones we have are cordless and we would not be standing close to the computer modem. (3). How easy is it to install the adapter that SunRocket provides to connect the phones to your cable modem? (4). What do you have to do with the Network Interface Device (the gray-colored box usually located on the outside of your home near the electrical meter. (5). How easy is it to stop using the services of the traditional telecommunications companies and begin using SunRocket.

    Thanks.

    MEL VOGEL

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  2. I disagree that Sun Rocket cannot be profitable. It sounds like your assumption is that all sun rocket cusgomer use an insane ammount of phone calls and 911 calls. And therefore, Sunrocket’s IP network must cost alot.

    I signed up for a sun rocket account 6 months ago, but only a couple of hours of calls a week at most. And I think a large percentage of users are like me. They wanted a simple pricing scheme, and were not actually planning to use the unlimited minutes offerred. It just nice to know you have fixed costs, but in reality people use a fraction of the allowed bandwidth. Most people use a cell phone these days and the tranditional land line is used less. People still want a land line for backup, but I dont see a large group of people on the phone 24/7 that could create huge costs for SunRocket. Also long term trends are for IP bandwidth costs to go down and not up so that also a cost advantage for VOIP. Of course traditional phone companies are also adopting VOIP internally so everyones costs go down.

    I suppose some people will try to get every minutes worth of their VOIP, but I think thats isolated case rather than the norm. With data compression, the actual IP peak usage is very low, and the infusture to support this bandwidth does not cost that much. Take your average 1.5Mbit dsl line, providers charge about same rate as sun rocket, and you get a ton of more bandwidth. Or to put it in revsere, its like Sun Rocket charging $25 for a 56K dial up connection. Which we know dial up can be had for like $10 a month.

    As long as Sun Rocket can get the critical mass of people to support the their initial network costs, they should be able to make money with any additional suscribers. After the critical mass, I would think adding more customers is very high margins simple becuase the fact that in reality people are not really using all the bandwidth offerred to them.

    It will be interesting to see how VOIP handles a national disaster where unprecedant high call volumes come out of the blue. This could show the weakness to the VOIP model. But then there has also been limits on the tranditional land lines as well.

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  3. Jeff Matson Monday, June 20, 2005

    I have been trying to get a number ported from Verizon to Sun Rocket for 4 months. After 3 submissions of the number porting order and 3 calls following up per order, (that 9 calls over 4 months) I can say that SunRocket doesn’t have it together at all.

    Only 1 of the 9 calls did I ever actually talk to a SunRocket employee. All the other calls are outsourced to a company that isn’t allowed to connect you to an actual employee. As a result, the 3 orders have all gone nowhere. I’m actually in the industry and do number porting all the time. It mostly works, but not always the first time. When it doesn’t work, it takes a real person to follow-up on it. SunRocket doesn’t seem to have any real people with any experience in the phone business.

    The service is ok if you only want cheap calls. If you want a nice calling experience, it is not that.

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  4. Sunrocket customer support stinks. Beware of this company. Their member bill of rights is a load of crap that they do not abide by. Online tech support means nothing and wastes time as they still want you to “call in” for tech support (in order to do the same things the online tech (via their online chat system) instructed). Even after all of this, they still do not support their products. Stay away from this company!

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  5. July 2005 – Sun Rocket is great. As for them not making money…that is not my problem. I will switch to someone else if they go under. However, I don’t think they will. I was paying so much to Verizon…and was not using the phone much. The flat rate pricing with everything taxes…blah blah included is worth the risk. If I was not technical I would take it for a test drive before porting or cancelling your land line.
    AJ

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  6. Sunrocket is Great! I also have Vonage and Time Warner VOIP and service and support is horrible.
    If porting your phone number is a problem it’s not
    Sunrocket’s fault it’s your current telephony company. Cheap calls are what you want. Why give
    anymore money to the telephony companies if you have to.

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  7. Vivek Sethi Monday, July 11, 2005

    I’ve had it for a month now and never had issues till last week.
    3 weeks back: Awesome service!
    1 week back: Some hiccups, but what the heck, great price!
    2 days back: Not sure if this is going to work if it is so unreliable…
    Today: Completely down.!
    I hope this is a temporary phase and things will move towards making this a reliable service, and not just a cheap service which always needs a back up plan on the part of the customer.
    Nothing hurts a business like unsatisfied customers who happen to be cyber active

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  8. We are having the same problems!!!! in TN.. Much more outages in the past few days.. OUT now for the fast 2 hours…!!!

    I have had the service since 2/05 and the service was reliable until the past several months!!!!!

    I cannot continue with this POOR service!!!!

    I have received several email replys from SR that suggest it in MY problem.. They have no CLUE what their problems are??????

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