Friday, July 27, 2007

SunRocket's Assets gobbled up

Teleblend is buying up significant portions of SunRocket.
Om Malik has a nice piece on the fire sale purchase.

Seems that Teleblend is acquiring "… limited strategic VoIP assets of SunRocket. These assets include the necessary hardware and software to ensure seamless provisioning for former SunRocket customers transitioning to TeleBlend (i.e. - they can continue to use their existing equipment and phone number and, most importantly, maintain service continuity).
TeleBlend, a “preferred” provider for former SunRocket customers, is offering these customers a discounted monthly subscription rate of $12.95 for the duration of their previous annual contract with SunRocket, and has set up a dedicated Web site – – for these customers to quickly and easily sign-up for service and maintain and transfer their existing phone number."

So, hopefully, Teleblend will be able to stay in business in an already crowded and cut-throat market where everyone is fighting for every subscriber they can.

This acquisition gives Teleblend a quick boost in customer base without having to go through the marketing costs. However, they did have to pony up the cash to buy the assests. I would guess the the pricing for the assets was far less thn the $200+ per customer acquistion costs the Vonages, Lingos and Packet8's are paying.

Again, this is why the established telcos and cablecos have a far lower cost of acquisition. They have an already established customer base. How many of you have been contacted by say, ComCast, BrightHouse, Verizon, or Qwest and asked to "upgrade" to their digital phone service?
This is why bundling will work far better for VoIP that as a stand-alone service.
If you have your cable, internet and phone with one company, you are far less likely to cancel one of the services. It's just so much easier to "pay one bill".
That's the power of numbers.

Thursday, July 19, 2007

Packet8 picking up SunRocket's Customer base

Om Malik has a post today about Packet8 offering to acquire the poor saps that were with SunRocket.
They're offering a month free and waiving activation.
Wel, that's no big deal, most of the VoIP companies out there give you your first month free.
Reading further into it, Packet8 tells the SR customers that the SR equipment won't work with the P8 system. So now, not only are the customers from SR who pre-paid for a year lose all that $$, but they now have to buy new hardware!

Wednesday, July 18, 2007

Independent VoIP's flatlining

As someone who used to work for an independent VoIP provider, I am not surprised to see SunRocket join the deadpool. There's a great post by Om Malik on his site.
After all, the costs of acquisition are so high. Consider:
1) the cost of advertising,
2) the cost of the telephone adaptor box that in most cases is given to the customer free of charge as an inticement to signup,
3) the cost of provisioning the calls....they just don't come out of thin air,
4) the cost of providing Customer Support....24/7,
5) and on, and on.
It's has been rumored that Vonage's cost of acquisition (COA) is somewhere north of $250 per customer. Do the math, spend $250 to acquire a customer, give them the first month free, a free adaptor box and free Customer Support. How in the heck can anyone make money at this???
Granted Vonage spends a TON on advertising--way more than SunRocket did.
But the, SunRocket was also giving away a free cordless phone with a signup.

It's like the old saying "we lose money on every sale, but we'll make it up in the volume".