Packet 8 Turns On The Copying Machine

Packet8 is taking a page out of Sun Rocket's Playbook by selling fully paid in advance rate of $199 a year and offering VoIP phones as part of the deal. This is much like a cellular phone company subsidizing the cost of the hardware to get a long term commitment out of customers.

Why is this a good move? First it makes service and upkeep needs on part of the company more predictable. Second it reduces churn. Third it makes the financial picture more predictable. Fourth it brings in gobs of cash (if the consumers bite) that can sit in the bank (but remains a liability too as it has to be on that side of the ledger).

While I remain skeptical of the long term success of Packet8, they are starting to market better, but they have had a long time to learn how.