Tue, Jul 17th 2007 10:10am
The slow death of SunRocket (which has now been confirmed), has prompted a lot of discussion about how to move to a new service if you're a SunRocket customer. Obviously, any SunRocket customer is going to have a few inconvenient days as they try to make the switch to another VoIP operator, if they do so at all. Also, just as Vonage's woes made it harder for SunRocket to raise funds, SunRocket's collapse could end up hurting Vonage. If Vonage customers start to freak out that they could lose their phone service as well (a prospect made more likely by the ongoing litigation against the company), then they may preemptively flee, looking for a more stable service. The phenomenon, whereby doubts about some sellers end up hurting more reputable services, is what economists would call a market for lemons, and this would seem to be a classic example. Meanwhile, Vonage investors have fled the scene long ago, as Vonage shares languish at all-time lows.
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