Internet Phone Company Halts Operations

INTERNET PHONE COMPANY HALTS OPERATIONS
[SOURCE: New York Times, AUTHOR: Matt Richtel]
SunRocket, one of the largest start-up companies offering Internet phone service, has ceased operation and is moving its customers to one or more other companies. The development underlined the struggles of start-ups trying to make a business out of providing Internet-based phone service, telecommunications industry analysts said. The companies face enormous pressure from the biggest competitors in the industry, both cable and traditional phone service providers. The cable companies in particular have made a strong push into the telephone market by offering the service as part of a package with television and Internet access. Start-ups like SunRocket and Vonage, the largest and best known of the group, tend to offer only phone service, and they do not have the ability of the larger companies to ensure quality of service because they do not operate their own telecommunications lines, said Richard Greenfield, a media analyst at Pali Research in New York. “They only have one product and they can’t control quality,” Mr. Greenfield said, adding that the business is “extremely challenging.”
http://www.nytimes.com/2007/07/17/business/17sunrocket.html
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