Unfortunately for SunRocket, wholesale costs for receiving calls from and delivering calls to standard telephones stabilized over the past year, which reduced an already scant margin to zero.
Newtown, PA (PRWEB) July 19, 2007
Junction Networks president Robert Wolpov has offered commentary on the company's blog regarding the sudden closure of SunRocket, one of the largest start-up companies offering Internet-based phone services.
According to Wolpov, SunRocket grossly overestimated the cost of bundling hardware and providing unlimited minutes for residential clients. Weaknesses in their business plan were evident when SunRocket started promoting heavily discounted prepaid annual subscriptions, reflecting a need to bring in short term cash at the risk of recurring revenue.
On the blog, Wolpov, whose company provides next-generation SIP services to small businesses, highlighted several major differences that distinguish Junction Networks' business model from competitors, such as SunRocket.
Specifically, Wolpov said the company does not sell "unlimited" plans. Instead the company charges per minute. This is a stark contrast to most of its competitors, including SunRocket, which charge flat rates.
"We figure with unlimited plans, customers are either going to figure out ways to abuse the plans or are going to make so few calls, they will perceive the unlimited plan as a waste of their money," Wolpov said.
SunRocket even went so far as to require that customers use SunRocket hardware. The only requirement for Junction Networks' customers is that they use SIP-enabled communications devices.
"You should use the hardware you want to use," Wolpov said. "A quality VoIP provider should be able to support it as long as it is SIP capable. Because SunRocket required users to have SunRocket hardware to access their network, it added a significant amount of overhead to their operations."
Avery Glasser, Junction Networks' Director of Product and a former industry analyst notes that SunRocket bet on a combination of low usage and a rapidly decreasing cost of termination services. "Unfortunately for SunRocket, wholesale costs for receiving calls from and delivering calls to standard telephones stabilized over the past year, which reduced an already scant margin to zero."
Robert Wolpov and the Junction Networks management team are available to speak to the media and analyst community regarding consumer perception of the sudden SunRocket collapse.
About Junction Networks
With more than 2,500 customers, Junction Networks is one of the largest providers of business class VoIP services to small and medium-sized enterprises. Using the most innovative applications available, Junction Networks provides high-end, multi-functional, Internet-based communications options that are easily adaptable to the needs of the growing business. Junction Networks' unsurpassed ability to leverage open standards, such as SIP, enables it to seamlessly integrate new functionalities into existing, scalable platforms so it can offer the benefit of enterprise-class broadband voice and data communications at a fraction of the typical cost.