MuniWireless

SunRocket, Inc., the second-largest supplier of Voice over IP in the U.S., cut service to its more than 200,000 customers without warning on Monday.

SunRocket, Inc., the second-largest supplier of Voice over IP in the U.S., cut service to its more than 200,000 customers without warning on Monday.

One of those customers would be me. I subscribe to both SunRocket and Vonage (its rival, the largest U.S. VoIP company with about 2.5 million subscribers). I was able to make calls yesterday but all I’m getting today on the SunRocket line is silence.

SunRocket, with its $199 yearly plan for unlimited calling in the U.S., was powerfully attractive when I signed up a year ago. Actually, it seemed unnaturally attractive, which was why we also kept our Vonage line. It’s not yet known whether it was SunRocket’s unusually aggressive pricing or other problems that torpedoed the company. Numerous news agencies have attempted to contact SunRocket. Its officials have been unavailable for comment, although The New York Times reached an unnamed source who said they planned to move their customers to other providers.

A report on Reuters notes “Companies offering calls over the Web were seen as rivals to established carriers when they sprouted up a few years ago, but many are having a difficult time financially competing against their big, deep-pocketed and entrenched rivals.”

Indeed, the big telcos have not sat back and let the VoIP startups eat their lunch, challenging them in

in the courts, as well as in the marketplace. Vonage is the target of a patent dispute with Verizon. This spring Vonage appealed which found the company in violation of Verizon’s patents. That appeal is pending.

VoIP is, of course, one of the compelling applications for municipalities due to the incredible savings it offers over long distance plans. Most telcos now offer VoIP plans and are pricing them competitively with VoIP start-ups like Vonage and SunRocket (testimony to the power of competition). Verizon’s VoiceWing, for instance, costs $24.95 per month‚Äö?Ñ?Æfour cents cheaper than Vonage’s $24.99 per month plan.

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