The news of demise is official. They have ceased serving customers. We reported about their problems back on July 2nd. Like sharks circling a wounded fish, and other are courting SunRocket subscribers – see Vonage ad image to the left. The real question is – who is next? SunRocket subs who decide to migrate to Vonage may see the same fate in a few months. The standalone VoIP model does not look very attractive right now.

The issue companies like Vonage face is developing a renewed value proposition. Cheaper pricing for unlimited local and long distance with a few cool features will not cut it over the long term. Consumers can get that from any number of providers, some of whom throw in high speed broadband and video to seal the deal. Why buy an expensive standalone broadband pipe to get Vonage, when you can get video, data and voice at an attractive price. When we look back on history, the lack of practical and inexpensive a la carte broadband pipes may reveal the true culprit in SunRocket’s (and more to come) demise. Other standalone VoIP providers like are trying to build a niche by going after the small business sector, but so too will cable. Some skeptics think Vonage’s ultimate play is a customer roll-up strategy for eventual acquisition. If they can hold on long enough, they may be able to pick up all of the other standalone ‘scraps’ that will litter the VoIP highway in the months to come.

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