Hosted VoIP

According to a report in Reuters, SunRocket (News - Alert) Inc., the second biggest U.S. supplier of Internet phone services cut off services on Monday, leaving more than 200,000 of its customers in the dark. There was no indication of closing down the business on its web site and callers to its customer service line heard a brief recorded message, saying: "We are no longer taking customer service or sales calls. Goodbye."

Sunrocket was a competitor to Vonage (News - Alert) Holdings at the home and small business market for Voice over Internet Protocol (VoIP

) phone services. Many years ago, when the VoIP boom started, many startups sprang up in US and other developed countries of the world. These companies were expected to give tough competition to the bigger companies. But as the years passed, it was the bigger companies who survived, with their deep pockets and enviable infrastructure. Meanwhile, many smaller companies found the going too tough and shut shop.

Calls to the VoIP services company were reportedly not returned.

Earlier, a report in the New York Times quoting an unnamed source claimed that SunRocket would close the operation soon and transfer its customers to a different company or companies.

SunRocket started by offering unlimited calls for customers within the Canada, the United States and Puerto Rico for an upfront fee of $199. Many customers signed up for this nearly unbelievable offer. But most of them were not happy as they complained about patchy service or full outages. On Monday, these posts were seen on web sited such as FatWallet.com and DSLReports.com.

Founded in 2004, SunRocket was backed by top-name Silicon Valley venture capital firms Blue Run Ventures, formerly known as Nokia (News - Alert) Venture Partners, Doll Capital Management and the Mayfield Fund.

SunRocket’s closure seems almost certain as ViaTalk, a rival to SunRocket based in Clifton Park, New York, issued a statement offering a contract buyout to SunRocket customers. Although Viatalk did not mention about the overall cost to SunRocket customers, it offered a coupon for free shipping of ViaTalk phone equipment to customers wanting to switch services.

Viatalk was formed by a Web hosting company, HostRocket.com, in 2005 and it offers a similar $199 per year calling deal. According to ViaTalk spokesman Tom Nardacci, the company has between 50,000 and 100,000 customers.

Meanwhile, industry leader Vonage remains locked in a bitter patent dispute with Verizon (News - Alert) Communications and has reported losses as well.

VoIP service providers now face stiff competition from cable television and telephone companies who offer alternative services as part of packages that include landline, broadband Internet, TV or mobile phone services.

Raju Shanbhag is a contributing editor for TMCnet. To see more of his articles, please visit his columnist page.

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SunRocket Reportedly Closes Shop

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