Verizon Wireless data revenue is exploding, says Verizon Chief Financial Officer Doreen Toben said Thursday.
Verizon wireless data revenues grew 65 percent in 2007, representing almost one-quarter of service revenues for Verizon Wireless, a joint venture between Verizon and Vodafone.
On an annualized basis, first quarter data revenue would reach almost $10 billion, she said, putting Verizon “only at the beginning of explosive growth.”
Google CEO Eric Schmidt says mobile advertising would make more money than advertising on the traditional Web in a few years.
That could be a huge number, though some might question whether the numbers are achievable. Analysts at Piper Jafray, for example, peg U.S. Internet advertising at about $30 billion in 2008.
What isn't clear is whether mobile advertising represents another $30 billion or will augment the growth of PC-based Internet advertising.
Schmidt seems to be the former, not the latter.
Schmidt pointed to reports of staggering mobile internet usage by iPhone users as an indication of the platform's viability and noted that iPhone makes the mobile internet lucrative by equipping users with a good mobile Web browser.
Skyfire Labs in late May raised $13 million in series A venture capital to create a new mobile-optimized browser, which is some indication of thinking that mobile apps are promising. And since advertising is based on monetizing attention, the investment suggests some thinking that a sizable revenue model is available.
AOL has the worse ranking among companies with "poor customer service," according to MSN Money's second annual Customer Service Hall of Shame, a ranking of companies with the worst customer service, based on a nationwide survey commissioned by MSN Money and conducted by Zogby International.
Comcast was said to have poor customer service by 42 percent of respondents. Sprint, Qwest, Time Warner CAble and Cox Communications also are on the list of "10 worst" performers.
. .
About 47 percent of people who had an opinion of AOL's customer service said it was "poor." MSN Money writer Karen Aho notes that communications companies and banks that provide complex and at times highly technical products are on the list precisely because those products are so complex.
Still, one has to note that AT&T, Verizon and T-Mobile are not on the list. Without excusing poor performance, consumer customer service is a tough job, hard to do well. As someone who once worked for a system integrator, I can attest that questions sometimes came in that I wasn't sure who was responsible for handling.
I don't think I'd claim we ever did a great job of it. It's tough, dogged work.
In fact, it can be unpleasant work. My wife occasionally gets calls from angry consumers who have a right to be angry, and all she can do is direct them to a department that probably was responsible for the unresponsive behavior in the first place. She knows the service "sucks." But large organizations that really don't care tend not to fix those sorts of problems.
In fairness, all big companies struggle with customer service, for good reasons. It's hard to do well, especially when the average size of any single account isn't large enough to devote as much support as one probably should provide.
Still, one notes that some names did not appear on the list. As tough as it is, customer service is better at some companies than at others. As a personal aside, I'm not sure I can agree with poll respondents who say Qwest customer service is poor. That hasn't been my personal experience at all.
In fairness, though, my contact with Qwest is as a business customer, and business customers get better service.
For the survey, conducted online in March, Zogby asked more than 7,000 people across the country to rate their customer experiences with 140 leading companies in 14 industries, including airlines, hotels, insurance companies and big-box stores such as Wal-Mart. Respondents could answer "excellent," "good," "fair," "poor," "not familiar" or "not sure."
The companies in the Hall of Shame were ranked by the percentage of people familiar with a company who answered "poor."
Vertis Communications Vertis Communications says U.S. adult consumers might be changing their physical world and online shopping habits in response to economic conditions.
One might expect further adjustments as higher gas prices start to change behavior as well.
Some 64 percent of consumers say they are shopping closer to home. About 59 percent are combining trips while 51 percent say they are cutting back on luxury items.
About 40 percent say they are making fewer purchases of $100 or more.
About 36 percent buy larger quantities of staples when they shop.
About a quarter are doing more research before buying and 13 percent say they are buying more online, perhaps to save money, perhaps to save gas.
in the US in January and found that 13% of respondents actually planned to buy more goods online as a result of current economic conditions.
More than three-quarters of marketers surveyed by Eloqua say they will increase their social media spending during the next three years. A full 74 percent said they plan to increase their direct email spending while about two thirds will spend more on mobile texting and SMS.
Respondents were bullish on online ad spending overall, with nine out of 10 saying they would continue to increase their direct online ad budgets.
The spending increases are likely to come at the expense of print ads, since 55 percent of respondents say they will probably decrease print ad spending in the next three years.
Many executives in the competitive local exchange carrier industry do not believe cable operators will achieve much success in the commercial markets, aside from the very-small business that requires as many as eight voice lines and not much more.
Those executives include some of the most-successful, best-respected CLEC operators in the business. But they still might be wrong.
The State of Montana Information Technology Services Division and the Montana University system has selected Bresnan Communications as a provider of statewide data transport services for Montana’s state agencies, local governments, universities and schools.
We are talking about a network with 568 locations, serving 23 different government agencies, 14 college campuses, 40 local government entities and courthouses.
I've maintained for some time that cable operators would prove in their commercial organization in the very-small business space before beginning to move up the value chain. Bresnan's win proves they can do it.
Sound off. Let government regulators know “How can the Internet make the world a better place?” Post your comments at www.youtube.com/futureinternet.
YouTube users can share their opinion with the leaders and opinion shapers attending the Organization for Economic Cooperation and Development "future of the Internet" meeting in Seoul, Korea on 17-18 June 2008.
The best videos uploaded to www.youtube.com/futureinternet will be shown to ministers and VIPs at the event. They will be invited to react as well and their answers will be uploaded on YouTube during the meeting.
In Seoul, all participants, including government ministers from more than 40 countries and hundreds of global leaders from international government organisations, business, the Internet's technical community and civil society, will be encouraged to submit their own answers at a dedicated YouTube booth on site.
International bandwidth grew 63 percent in 2007, which just about matches the 50 percent annual growth in bandwidth use reported by SureWest Communications, an independent telco, as well as other broadband access providers.
For buyers of global bandwidth, it appears aggregate prices were "stable," as industry watchers note, meaning a decline of 10 percent or in some cases 20 percent on capacity prices. Global bandwidth, especially on well-supplied routes, tends to decline over time as buyers consume more optical products that offer lower price-per-megabit ratios.
However, prices are opaque, and pace of price changes varies dramatically—by route, by service provider, and by bandwidth product, TeleGeography notes. There can be quite a lot of price variation even on a single route, and for a single product, as these prices for London to Paris indicate.
In-Stat forecasts over 229.5 million mobile subscribers globally could be using mobile social networking services by 2012. Blogging, photo and video sharing, location-based socialization services, games, SMS, and IM will eventually be combined to afford the mobile user the entire social networking experience from a handset application, In-Stat says.
Carriers will benefit from wider use of data plans, to be sure. But the more important insight probably is that the handset becomes the focus of attachment. The mobile handset will simply become an extension of the user in most aspects of life, In-Stat argues. If so, carrier brands will be less important than the handset brands.
"The critical issue most mobile social networking site and application developers struggle with is how to make money with their services," says Jill Meyers, In-Stat analyst. "There are three primary methods of revenue generation for mobile social networking applications- advertising, subscription services, and premium upgrades."
Little of that potential revenue is available directly to network service providers, though. And it remains unclear whether social networking actually is the foundation for a revenue stream or simply a really important feature.
Research from Scarborough Research shows that early adopters are different from other consumers. "Digital savvy" consumers use more technology and have more money, than the typical mass market consumer.
Cable operators never make the mistake of getting hung up worrying about early adopters. Everything they do is tuned for the average consumer, the sort of "other side of the chasm" customer technologists have to learn to deal with to achieve real mass market success.
It is important to note what sorts of experiences are getting traction, of course. It's just a different matter to tailor those experiences for the great mass of consumers who will not put up with much inconvenience when using new applications and services.
Lots of entrepreneurs fail when they don't clearly understand the differences between the bleeding edge early adopters and the real mass market.
Two-thirds of adult respondents said they preferred e-mail for communicating with businesses, say researchers at Ipsos.
Just as many—and this might be the important part—say they expected to continue preferring email five years from now.
The issue is how other younger age cohorts will adapt to the email-centric culture prevalent in business. One suggests they'll adapt quickly, even as they push for use of additional tools.
TiVo says its subscribers will soon be able to rent Disney movies through their DVRs, as part of a service offered in conjunction with CinemaNow, NewTeeVee reports.
Content will be offered in both standard and high definition and will be available for a 24-hour rental period.
Not all of us enjoy messing around with technology; backing up files, restoring software, tweaking application settings, defragmenting our hard drives and so forth. In that regard, I ran a scan using Large Software's "PC Tune-Up" suite on my XP machine.
The Suite quickly found about 504 problems, most of them said to be "serious" or "moderately serious." The dashboard information was clear, intuitive and the scan seemed to run faster than I recall other similar suites operating. Again, this was not a controlled test, so I can't speak to how other programs might have performed.
I will say the application executed much faster than I was expecting, especially in the defragmentation phase of the tune-up.
As service providers look to avoid "dumb pipe" status, supplying enterprise, peformance optimization would seem a logical place to extend the range of services such as anti-virus, firewall and anti-spam functions many Internet service providers now supply as an integral part of the access service.
The other thing is that some services are more "logical" parts of service bundles. An enriched software experience that improves Web and Internet performance probably will be seen by users as a logical extension of basic access.
Also, as the actual user experience migrates beyond a service provider network interface (a router in a small business setting, IP phones in an enterprise or mid-sized business setting or the PC in a consumer application, service providers of necessity will be seen as the "entity to call" when something isn't functioning properly.
If you can't avoid the calls to your customer service center, you might as well extend service and support to the actual end user device. Most of us by now have discovered the "dueling applications" problem when loading any new software. A hosted approach should eliminate that problem.
That's not to say I experienced a single issue using the downloaded version of the software. Set-up was completely uneventful and the application executed better than I expected. The observation is simply that distribution as part of a bundled "access" service would make sense.
Lots of us just want to do things. We don't want to be system administrators. This should help.
The average price of wholesale circuits in most major markets dipped 10 to 20 percent in 2007, according to TeleGeography. For many, that would be considered price stability.
As price declines have moderated, international bandwidth demand has remained strong, growing at a compounded annual rate of 52 percent over the past five years, TeleGeography adds.
But revenue growth remains elusive for many wholesale network operators, the company says. A key reason lies in bandwidth buyers' changing purchase patterns: they simply are substituting bigger pipes for smaller pipes, paying more money in aggregate but at lower prices per megabit per second of capacity.
Companies that may have purchased a few 155 Mbps STM-1/OC-3 circuits five years ago are now opting for 2.5 Gbps or 10 Gbps wavelengths. These large circuits are far cheaper in terms of the price per Mbps of capacity than the smaller circuits.
"The effective price per megabit per second of capacity sold is falling a lot faster than nominal circuit prices, themselves," says TeleGeography Research Director Robert Schult. "Carriers need to sell ever larger volumes just to maintain stable revenues."
Given a choice between believing what people say they will do and evidence of what they have done, I've always found it is more helpful to believe what they have done is a better predictor of what they will do in the future.
So consider a bit of survey data which seems to have the ring of authenticity and some purchase behavior that might bear on the development of mobile Web devices.
The clear winner in an In-Stat survey of U.S. consumers about preferred mobile Web devices is the smart phone, the research firm says. Nearly half of the respondents said they preferred the smart phone as a mobile Internet device.
Fewer than 10 percent indicated a preference for the capabilities of mobile Internet devices, such as an ultra-mobile PC or a mobile Internet device. In some ways that simply makes sense. The mobile device most people carry is a mobile phone. Given the ability to add Web access from that device, one would expect most people to say that is the preferred, "use every day and everywhere" device.
The issue is that consumers rarely if ever provide decent input on applications or devices they have not seen or used. Survey responses would seem to carry an awful lot of that sort of data.
About one quarter of users like the idea of the ultra-mobile PC as long as it does not involve sacrificing the capabilities of a full-function laptop. But few users have them, at least so far.
Those showing an interest in MIDs were unclear about how they would use these devices or where to buy them. Again, there is a lack of awareness and experience with such devices, which make the feedback less useful.
The main objection for non-users of mobile data technology in general, and smart phones in particular, is that users are skeptical of the benefits of mobile data and view it as a “luxury.”
On the other hand, there is data gathered from Finland mobile operators suggesting very strongly that it is in fact PCs that drive most of the mobile data traffic.
It might be that today's mobile Web users primarily are users with characteristics different from the ultimate base of mobile Web users. That might be the case for 3G data card users and iPhone users, for example.
The point simply is that we won't know what users actually will do until they have ample chance to see and use mobile devices capable of using the Web. There is ample evidence that iPhone users have mobile Web usage profiles astoundingly different from users of other Internet-capable mobile devices.
Pike and Fischer analysts predict that AT&T, Verizon and Qwest will capture the biggest share of large enterprises as VoIP customers, but will face competition in the SMB space from a variety of new entrants.
The big issue is whether the former RBOCs also will have the same success in the consumer market, despite early dominance by cable operators.
This analyst thinks they will.
Microsoft Corp. expects global unit sales of its Windows Mobile software for mobile phones to grow at least 50 percent per year in fiscal years 2008 and 2009, driven by smart phone demand. "Fifty percent growth is the minimum," Eddie Wu, Microsoft managing director, told Reuters. He said Microsoft expects to sell 20 million units in its 2007 to 2008 fiscal year ending in June 2008, and expects to grow at least 50 percent annually over the next two years.
Lots of valuable features do not provide a foundation for fleshed-out business model, many Web 2.0 entrpreneurs seem to be finding.
The shortage of revenue among social networks, blogs and other “social media” sites that put user-generated content and communications at their core has persisted despite more than four years of experimentation aimed at turning such sites into money-makers, the Financial Times reports.
“There is going to be a shake-out here in the next year or two” as many Web 2.0 companies disappear, says Roger Lee, a partner at Battery Ventures. That's just part of the innovation process, as you know if you were part of the Web 1.0 boom of the late-1990s.
But features often are an important and long-lasting effect, even when completely new business models are not built. Email arguably hasn't created a stand-alone business model, for the most part, yet it has radically changed user behavior and expectations.
Social networking appears to be one of the lasting fruits of the current Web 2.0 wave, no matter what happens with most of the companies attempting to make a business out of it.
It appears that U.K. PC use in rural areas, use of Internet access and broadband access rates are higher in rural areas than in urban areas, U.K. regulator Ofcom reports.
Some will note that unbundling of access loops is at 100 percent in the U.K. market. What that effectively means is that every potential customer has access to broadband, eliminating uptake differentials limited by physical unavailability.
Six Flags says spending by customers inside its theme parks increased 13 percent over prior quarters, in the fourth quarter of 2007, the first quarter of 2008 and the first two months of the second quarter.
With just about everybody now skittish about the impact of economic sluggishness on consumer spending, that's not only reassuring for Six Flags, but a metaphor for what service providers might consider as well.
"Getting people inside the park" in that case means creating and sustaining a relationship, with virtually any single service. Once that is done, there is an opportunity to sell other things. In Six Flags' case that is food, beverages and souvenirs.
For service providers, it is an array of other services, applications or usage upon which partner revenue streams can be created. An entirely new "targeted" advertising business might be created on the back of widespread "video on demand" or "content on demand" offerings, for example.
It isn't yet clear how current charging mechanisms might change, and there is lots of standardization work to be done so potential advertisers can buy what they want conveniently. Not to mention the "danger" that Google and other application providers get there first.
Still, the analogy, though imperfect, is instructive.
An unnamed Telstra executive tells Australia-based ChannelNews that the Telstra version of the Apple iPhone will run at download speeds as high as 42 Mbps.
"We know what is coming we have seen the new device and it will be available on our network as soon as it is launched in the USA," the executive is reported as promising. "By Christmas this phone will be capable of 42 Mbps which will make it faster than a lot of broadband offerings and the fastest iPhone on any network in the world."
Whether fully correct in all details or not is less important than the ultimate reality of the claim. Wireless providers indeed are readying networks that will run that fast, and faster in the future.
Mobile devices capable of communicating that fast might not be as disruptive as mobile voice threatens tethered voice in some markets.
The larger issue is that once mobile broadband connections run that fast, and ultimately faster, some percentage of single-household users might well find mobile broadband a suitable replacement for fixed connections.
My gut level expectation, though, would be that most mobile broadband connections will supplement rather than supplant fixed broadband. There simply are too many other interesting reasons to maintain a fixed broadband connection.
Mobile voice does not suffer from form factor issues that make it a convenient replacement for tethered voice, for example.
Mobile broadband might cannibalize fixed broadband in some cases, but logically as a substitute for PC connections.
An iPhone operating that fast will enable sessions that largely are supplemental to fixed broadband.
Make no mistake: transforming a legacy "telco" into a "broadband" company is tough, expensive, often-slow work. But SureWest Communications, for the first time, now makes more money from broadband revenues than from traditional telecom segment revenues.
A couple of observations. SureWest lumps its out-of-region services in the "broadband" category, so the growth is not all in-region broadband access connections and video, though both are growing.
Still, the milestone is important. SureWest is in some ways a "classic" smaller, independent "telco." But it has invested heavily in fiber-to-home networks based on Ethernet standards and IPTV. It has no mobile assets and has "bet the farm" on broadband.
But the strategic implications are impotant. It has gone "out of region" in an important way. Most smaller entities, as well as tier one providers, now find that out-of-region growth is crucial.
Also, business customer revenues are important. Over time, as it faces heightened competition from cable companies in the consumer space, SureWest has found business customers a more important customer segment.
That will be true for most smaller providers that cannot rely on mobility or mobile broadband to fuel growth.
Email is not going away, isn’t dead, and won’t be dead for a long time, says Media Post's Loren McDonald. The statement might seem odd, except it occurs after a panel of college-age Internet users at the Email Insider Summit.
One of the difficulties, when trying to predict how enterprise communicatons might change as Millennials enter the workforce, is precisely the fact that most of them are not in the active, full-time workforce.
Just as a "lone eagle" professional does not need a full enterprise-grade, premises-based phone system, so a college student has no need for one either. So it is hard to extrapolate from one stage of life pursuits to another than requires collaboration with other people in an existing social ecosystem, with established rules for communicating.
Today, the commonplace and accurate observation is that instant messaging and text messaging are preferred over email. But pre-workforce users will change as their life circumstances change.
That doesn't mean "nothing important will change." At a minimum, Millennials will retain the IM and texting habit for purely "personal" communications, even if they get used to email for business-related communications.
Beyond that, the additional implications are hard to predict.
”We come at Joost or other platforms from the point of view that we cannot predict, nor did we in that case or any other case, predict which ones are going to be hugely successful, moderately successful, which won’t work," Viacom CEO Philippe Dauman says, reported by according to paidContent.org co-founder Staci Kramer.
“This is an age of experimentation," Dauman says. "Some models that sound great don’t work that well."
A reasonable approximation of just about every new application, or major change in use of an existing application, don't you think?
A recent Saugatuck Research worldwide survey of enterprise executives finds continued, strong growth in the adoption and deployment of software-as-a-service (SaaS).
According to the latest data, mid-sized firms are the most aggressive, and most satisfied, SaaS users.
Overall, the research indicates that nearly 40 percent of companies across all size categories will have adopted at least one SaaS application by year-end 2008.
Saugatuck believes that the number of firms that are likely to completely avoid SaaS is likely to drop to less than 5 percent within 3 years.
By 2012, 70 percent or more of businesses with greater than 100 employees (worldwide) will have deployed at least one SaaS application.
Interestingly, the largest of firms (with greater than 5,000 employees) appear to have gone through the most significant learning-curve – as they seek to understand how SaaS (as well as Open Source) will become fully interwoven into the fabric of enterprise architecture. In fact, only two years ago, our research indicated significant resistance to SaaS among large-company CIOs – but our most recent research indicates that only 4 percent of companies with greater than 5,000 employees are planning not to deploy SaaS.
This is a significant change – and shows how SaaS will reach into the largest of companies, as well as small-to-mid size enterprises.
Executives at mid-sized firms indicate greater familiarity with SaaS than executives at other sizes of firms. Firms with between 100 and 499 employees showed by far the greatest familiarity with SaaS (86 percent – "familiar", "very familiar", or "extremely familiar") – 5 percent to 20 percent higher than all other company sizes.
A greater percentage of mid-sized firms are using or planning to use SaaS. Forty five (45) percent of firms with between 100 and 499 employees are using or expanding their use of SaaS by year-end 2008.
The next-closest group, "Large" firms with between 1000 and 4999 employees, showed 43 percent either using, planning to use or expanding their SaaS usage by year end 2008.
While satisfaction with SaaS solutions is very high across all sizes of customer firms, executives at mid-sized firms show higher satisfaction with their current SaaS solutions than do executives at other sized firms.
And that high satisfaction includes more areas of SaaS than with either Small or Large firms. Amazingly, 95 percent of executives at firms that we surveyed with 100 to 499 employees (representing almost 25 percent of our sample) indicated they were "satisfied" with their overall SaaS experience – with the average of all firms registering a whopping 84 percent satisfaction rate.
Saugatek defines "Small" companies as those with less than 100 employees.
Mid-sized firms are those with 100 to 999 employees.
Large firms are those with 1,000 or more employees.
The New Zealand government has proposed creating a Broadband Infrastructure Fund of NZD325 million (USD251.6 million), to be spent over five years. NZD250 million would be earmarked for fiber and other high speed open-access networks in urban areas, and the remaining NZD75 million would help fund broadband infrastructure in rural areas.
Applications would be taken August 2008, with the first decisions on projects made in June 2009.
The urban grants require a match from the applicant. The rural fund would have ‘less onerous’ application criteria.
It normally is perilous to compare countries too closely in the area of what works and why. Loop lengths, density, geographic size, household size, demographics, taxation policies, prices, terms and conditions, government policies and any number of other factors condition the success of particular applications and services.
In the U.K., for example, cable has not emerged as such a powerful competitor in triple play markets for the simple reason that satellite-delivered video is so dominant there. Also, robust wholesale unbundling of copper access loops encourage competitors to lease capacity from BT rather than wasting time and money building facilities.
Still, one wonders how successful the New Zealand plan might be. Open access networks in the sense of robust wholesale have not worked all that well in the U.S. market, though one can point to Western Europe as a place where access to the incumbent access facilities has worked.
And where it has been successful, open access appears to have worked best on incumbent, rather than competitive networks. Sheer payback issues might suggest why. An incumbent almost always has written down the value of the copper assets, so a business can be made on lower-priced wholesale loop rentals.
A brand-new network has to recover the full cost of new construction, again using the lower-priced wholesale revenue model. Huge volume makes a difference, but huge volume is tough to get.
Some executives speculate that wholesale networks sometimes attract competitors with little operational knowledge of voice, data, networking or video. Those contestants often are underfunded and ill-equipped for the long term tasks of providing a high-quality service to mass market customers, with the almost-inevitable result that high initial take rates are followed by high customer churn in a year or two when quality issues have surfaced.
Hopefully, the New Zealand initiative will operate in some like manner to rural telecom subsidizes in the U.S. market, essentially helping defray high capital investment costs. Subsidizing insufficient demand, on the other hand, will doom the projects before they begin.
Legacy services (frame relay, leased line, and ATM) still are in use in over half of the U.S. organizations within four vertical segments (professional services, finance, insurance, healthcare, and government) surveyed recently by In-Stat researchers.
Over 50 percent of these current legacy services users are migrating, or plan to migrate, some or all of these services to other services, such as IP/MPLS and Ethernet, In-Stat says.
That's what one calls being "past the tipping point." Ethernet and IP are not the "protocols of tomorrow." Very soon, they will be the "legacy" or "mainstream" protocols.
Looking at 177 major enterprise deals signed by European telcos in the second half of 2007, Forrester Research analyst Phil Sayer finds a dramatic increase was in managed local area network services, from seven percent in the first half of the year up to to 13 percent in the second half.
That doesn't necessarily mean desktops. There was a big drop in the number of deals including desktop services.
The the most unexpected trend, Sayer says, was the reduction in the number of deals including managed audio and video conferencing.
Managed audio and video services were present in only one percent of deals, compared with four percent in the first half of the year.
The percentage of converged deals, those with both telecom and an IT services component, was up from 22 percent to 27 percent.
The number of deals was up significantly from the 120 signed in the first half of the year.
The total contract value fell to €2.1 billion, down from €2.6 billion in the previous half-year, because the average deal size shrank, the number of small contracts increased, and there was a big drop in the number of "megadeals".
Large telcos have more than dabbled in the managed IT services arena for some years, with mixed success. Going forward, though, there is little doubt that they will have to do better in that regard. Volume-wise, more business in the consumer segment is going to be taken by cable companies and other mass market specialists.
In the SME space, small specialist firms will continue to compete effectively based on "local touch" and "local presence." But large tier one providers will continue to have the best position in global deals needed by large trans-national businesses.
As all communications and computing-based applications reach further towards the actual end user devices, more control and management is needed. So tier one providers have no choice but to reach past the traditional points of demarcation and support applications and software running on all sorts of end user devices.
"I think the Netflix Player proves all the essential concepts," says New York Times technology writer Saul Hansell. "If a TV, with a handful of extra chips, can provide an experience as satisfying as the Netflix Player can, why do we need any other form of video distribution?"
That indeed is an important question which ultimately will be decided by content owners and users, not distributors, with all due respect. If users decide they want to watch streaming media delivered over broadband and sent to the TV, and if a suitable revenue model can be devised, content providers are going to support the business model.
But don't discount traditional packaging partners. Program networks (packagers) historically have been effective at creating "appointment" TV or "big event" hype to drive audiences to content as a shared experience. They've proven effective brand creators as well.
It remains to be seen if they will continue to be as effective in a world when the while idea of "scheduled" viewing is in greater disfavor. But don't discount their ability to master whatever techniques are required to sustain linear viewing models.
There is a difference between turning on a television or other display to watch a specific piece of content, and turning on a TV just to "watch TV." Linear television isn't so helpful in the former case, but works pretty well in the latter case.
In the latter case, a packaged "channel" offers a fairly clear guide to what sort of content might be on at any given moment. For somebody who is not actively looking for a specfic program, but simply "something to watch," linear video and "brands" are fairly effective shortcuts.
Still, the Netflix Player seems to be simple enough to use, and reasonably enough priced, to get traction at this point in time. The Player is no immediate threat to traditional cable operators, satellite distributors, networks or telco video providers. Changes of this sort always take a while to get going.
So far, though, the simplicity, low cost, ease of porting to a TV display and access to free content arguably are better than any earlier approaches.
Nortel's new Adaptive Application Engine software, built around Session Initiation Protocol, allows Nortel customers to create Web 2.0 applications like social networking, blogs, and wikis with IP voice and multimedia.
Operators can choose to run the software on hundreds of Red Hat Enterprise Linux compliant servers.
The Adaptive Application Engine software provides an open programmability environment and web service Application Program Interfaces which allow third-party software developers to easily develop new applications which use call routing, presence and federated IM.
The software is designed to support both smaller service providers as well as tier one providers as well.
The Adaptive Application Engine software can be deployed as a SIP Application Server, as an IMS application server or as advanced capabilities on the Communication Server 2000.
Nortel says the new software will allow service providers to create unified communications services, federated instant messaging and IP communications integrated with Web applications.
The software also supports features such as using TVs to control calls or send instant messages.
The software also will allow service providers to create fixed mobile convergence services such as making mobile phones into office extensions and allowing calls to be moved back and forth across tethered and mobile devices.
Nortel is first among the large traditional switch vendors to make such tools available as a "bolt on" to its existing architecture. Depending on how the software is received, it could be an important step for service providers on the Nortel platform.
Up to this point there has been some skepticism that smaller service providers, in particular, would be able to create these sorts of applications on their own. The software is half the solution. Now Nortel has to pull together a developer community and make those apps available to its customers.
Since most of the world's electronic entertainment and communication is moving from analog to digital, you might wonder why anybody would want to go the other way: take digital content and change it back to analog.
Well, as typically is the case in the networks business, there is a simple business reason for wanting to undertake an operation that might not make so much immediate sense.
Cable executives can save some money on digital converter boxes if they can supply simple tiers of popular programming to analog TVs without the need for a box. That might apply to second and other sets, for example, or to some customers who want basic services.
The other angle is that some percentage of the customer base might prefer simple analog-only service. And if all the other providers require digital decoders, cable might have an advantage.
Thomson has introduced a simple box the company said will cost less than $40 and allow delivery of 20 to perhaps 40 channels of analog service.
At the same time, such decoders will allow cable operators to migrate their networks to all-digital operation, allowing analog tiers to be offered to customers who want them.
Comcast has announced that it will rely on such converters to convert 20 percent of its systems to all-digital operation in the fourth quarter.
Cisco Systems, Motorola and Pace Micro Technology also have versions of the decoder.
It's a good thing to let the business case drive the technology. And this is an example of that.
In the first quarter 2008, vendors shipped a total of about 7.9 million VoIP subscriber feature server licenses for deployment in service provider networks, say analysts at iLocus.
The number of lines is down by 19 percent quarter over quarter, though the analysts note that the third and fourth quarters of 2007 were marked by unusually high growth, so the sequential comparisons would be more difficult than is typical.
In the first quarter, Nokia Siemens Networks led the VoIP subscriber lines equipment market on a worldwide basis with a market share of 19.8 percent. That lead is followed by Italtel at number two and Cisco at number three worldwide.
Business Centrex lines account for over 1.03 million of the licenses. The remaining 6.87 million were mainly deployed for residential voice over broadband apps or switch replacement.
Analysts at iLocus caution that they do not track IP upgrades to TDM ports. They do track VoIP hosted telephony implementations (such as hosted PBX and VoBB), new greenfield VoIP deployments, complete replacement of legacy switches with VoIP, and extension of existing legacy networks with VoIP equipment in new geographies.
Netflix now is in the streaming business. A new "content to the TV" box made by Roku will allow subscribers to stream an unlimited number of movies and television shows directly to televisions.
The device costs $99. The video content is free to anyone with a Netflix subscription of $8.99 a month or more. Most of the video content will consist of older material, rather than new releases, though.
More than 80 service providers are delivering retail carrier Ethernet services to business customers in the United States, say analysts at Vertical Systems Group.
Services range from Dedicated Internet Access (DIA) to Ethernet Private Lines to VPLS (Virtual Private LAN Service).
Incumbents, including market leaders AT&T and Verizon, deliver nearly half (46%) of all business customer Ethernet ports installed in the U.S.
Another one third of the total (34%) is supplied by competitive providers, with Time Warner Telecom and Cogent topping this segment.
Cable MSOs have the smallest base overall (20%), however this is the fastest growing segment of the U.S. Business Ethernet services market based on ports.
Cox and Time Warner Cable currently lead in the Cable MSO segment.
Though Wi-Fi remains the clear home-based wireless networking technology, mobile providers also are experimenting with UMA and femtocell techniques. But Aruba Networks suggests the ultimate solution might bit of "all of the above," as often happens in the communications business.
Those discussions, likely to become more pronounced as service providers grapple with their fixed-mobile convergence strategies, will require some choices.
Wi-Fi has high production volumes, low prices and good consumer acceptance. Femtocell technologies currently must climb an experience curve to provide reasonable consumer device prices, and sort through some business model issues, Aruba argues.
Wi-Fi already has a significant network effect, so mobile operators must choose whether to leverage Wi-Fi or use femtocells.
Mobile operators have the advantages of macro-cell coverage and phone numbers, so Aruba suggests a hybrid approach using both Wi-Fi and femtocell technologies.
A simple device might combine a Wi-Fi access point and femtocell, or possibly a digital subscriber line connection as well.
Microsoft Corp. sees tens of millions of corporate e-mail accounts moving to its data centers over the next five years, Reuters news service reports. Consider that a vote in favor of "cloud computing" and hosted services.
Chris Capossela, Microsoft SVP, says he expects Microsoft to allow enterprises to choose between the more-traditional licensing model and a subscription-based service.
Exchange Online, the service offering for its Exchange mail and messaging server software, will be the primary application adopted by corporate customers, Capossela believes.
"In five years, 50 percent of our Exchange mailboxes will be Exchange Online," he predicts. Small-business specialist Cbeyond probably would agree. In its Atlanta market, its oldest market, Cbeyond is seeing 40 percent penetration of the hosted Exchange service it offers to small business customers.
According to research firm Radicati, Exchange will run about 210 million corporate e-mail accounts in 2008, growing to 319 million mailboxes in 2012.
By the first quarter of 2008, 16.3 million consumer VoIP lines were in service, representing 13.8 percent of all U.S. households, and 27 percent of broadband households, say researchers at TeleGeography.
Those customers--80 percent or so--largely but not exclusively have been gained by cable companies, at the expense of the incumbent local telephone companies.
Since the start of 2005, the RBOCs have lost 17.3 million residential telephone lines, while VoIP service providers have gained 14.4 million new customers.
Most Web sites are fairly user friendly these days. But every once in a while you encounter a site designed by people who seem to have no idea why people come to a site, and how they use them.
37 Signals notes a site where six different kinds of shoes were found in a “performance” category. When 40 uninvolved people were asked what “performance” meant to them, only 10 had even a vague idea.
Use "paths" when designing, 37 Signals says. "A path is a line that goes from a starting point A to an accomplishment B." That's what users want. That’s a path. "Where are your golf shoes?" is a path.
"Does my cell phone support international calling?" That’s a path as well.
"Collect all the paths you can think of in a pile, pull out the 8 paths that 80 percent of your visitors come looking for, and that’s your home page.
Blogs are a new form of media, but they are "media." The number of people creating blogs in the United States will reach over 35 million by 2012, roughly 16 percent of the Internet population, according to eMarketer. But as is the case for most forms of user-generated content, most people are content to watch, listen or read, rather than creating content themselves.
By 2012, more than 145 million people, 67 percent of the U.S. Internet population, will be reading blogs at least once a month. That is up from a readership of 94 million in 2007, or 50 percent of Internet users.
Paul Verna, eMarketer senior analyst, says "U.S. blog advertising will reach $746 million in 2012, up from $283 million in 2007."
Like podcasts, blogs tend to appeal to specific audiences. Accordingly, much of the demographic targeting that marketers work so hard to achieve in the mainstream media is already done for them.
U.S. wireless customers spent $24.5 billion on data services in 2007, with usage growing 55 percent, says consultant Chetan Sharma.
Growth increased steadily through the year, with fourth-quarter 2007 data services revenues hitting $6.9B. At current rates, the only question is how much above $28 billion will be spent in 2008.
Fourth quarter data revenue was up 7.8 percent sequentially. Average revenue per user .declined by $0.81 and reversed the trend of overall ARPU uptick of the last two quarters, though.
Average voice ARPU declined by almost $1.50 while average data ARPU inched up by $0.68, Sharma says.
Verizon and AT&T grew annual data revenue 64 percent. Overall, the top carriers earn about 19.34 percent of total revenue.
Non-messaging data revenues continue to be in the 50 to 60 percent range of toal data revenues.
Asustek Computer will launch its Atom-based 8.9-inch Eee PC 901 in June 2008. Hewlett-Packard recently launched a Windows XP version of its Mini-Note 2133. Dell is said to be readying its own version of a mini-notebook. Given the popularity of Linux-based Eee devices, and the addition of XP-powered machines, a class of devices--"mobile Internet devices"--is being seeded into the market that are precisely the sort of new mobile-centric machines fourth-generation networks are poised to serve.
It's just one of those rumors that pop up, possibly because an investment bank thinks it can drum up some business by convincing a company executive a deal makes sense. But there's chatter, says Henry Blodget, that Best Buy is looking at buying Netflix. Some investors think there might be fire where there's smoke, and pushed share of Netflix up six percent on higher volume May 16, 2008.
Given that Blockbuster is being persued by Circuit City, what gives? The logic behind each transaction is that a tighter integration of software and hardware is good for both businesses. Sony, with a mixed track record, used precisely that logic to get into the studio business. And Apple uses a similar approach for iTunes.
The issue, perhaps, is whether there is enough ability to integrate on-demand video and DVD rentals and sales with the rest of the consumer electronics retail business. That might be hard to envision.
Still, each retailer, like Wal-Mart and Target, already is in the video content sales business. Software drives hardware purchases; and hardware purchases create the demand for software sales.
The next meeting is in San Francisco, June 23-24 at the Hotel Nikko. It will feature the most-extensive speaker line-up ever and will feature the biggest attendance ever
“From a bottom line business perspective, Voice Peering Forum Winter 2007 was hands down the most productive conference I attended last year." said Patrick Murphy, COO, The Thomas Howe Company, a leading professional services firm focusing on voice mashups and communications enabled business processes, and is widely recognized as one of the most influential firms in VoIP.
"The voice over IP market is booming, the Voice Peering Forums provide us with a great opportunity to discuss the different topics with a right set of players in a good size and focused environment." commented Carlos Da Silva, Director of Marketing Americas, Orange international wholesale solutions.
For many telcos, IPTV makes sense as a delivery platform or transmission mechanism as much as anything else. Sure, IPTV offers more "hooks" to advanced services integrated with content. But the revenue battle now is over linear TV services that compete with cable and satellite-delivered fare, and that means the choice of "switched" IPTV, instead of a broadband digital delivery method (all linear channels delivered digitally) isn't perhaps as critical.
For Verizon, which has been its video using a method that is closer to cable TV than anything else, linear offerings seem to be fine for the moment. That's where the money is.
Even operators that have chosen an IPTV solution for its bandwidth efficiency still are making their money on the linear video service, not the new features.
Some observers continue to worry about Clearwire's prospects from a financial, rather than operational standpoint. At the very least, there remains an underfunded business plan. Clearwire says it is $2 billion or so. Assume Clearwire is correct. That money still remains to be raised.
On the operational front, early 60 percent of domestic markets are EBITDA positive. Of course, any veteran of the competitive communications business will understand what that means and doesn't mean.
It doesn't mean Clearwire is making a profit in those markets. New national networks, even of the more-affordable wireless sort, are hugely expensive. Cash flow is important, though, and a reasonable measure of progress.
The issue is that nobody builds a new broadband network these days expecting to survive offering a single service, no matter how compelling. Multi-service bundles are the necessary requirement when penetration levels are expected to be modest, so VoIP is getting more attention these days over at Clearwire.
The issue will be whether Clearwire can garner enough revenue operating essentially as a "3G with voice" operation or "broadband with VoIP" business until the next wave of applications and devices start to get traction.
Some of that Clearwire can influence, but not all. If I had to guess, I'd bet that robust wholesale services ultimately will make the difference.
Scott T. Ford, Alltel CEO, says the company, which currently runs a wireless network based on CDMA, will migrate to Long Term Evolution when it builds a fourth-generation network. Not that it is in any rush to do so. But
Alltel seems to be in step with its mobile service provider compatriots globally.
LTE seems to be shaping up as the first global wireless standard, a development that should help considerably in terms of scale, and what that means for the cost of devices.
WiMAX is growing as well, but does not currently seem to be poised for the scale that LTE is poised to garner.
Google now has overtaken Yahoo as the most-visited website property, according to comScore. In April Google Sites attained the number one spot in the Top 50 U.S. Properties ranking for the first time in history with a total audience of more than 141 million visitors.
Yahoo Sites ranked second with 140.6 million visitors, followed by Microsoft Sites with 121.2 million visitors.
Superpages.com Network and CareerBuilder both jumped eight spots in the ranking to positions 18 and 30, respectively.
According to comScore, Google’s unique U.S. audience in April was up 18 percent from the same month in 2007, while Yahoo’s audience grew 7 percent.
Sprint and Samsung Electronics Corporation now say WiMAX has met Sprint's commercial acceptance criteria and is ready for service, with initial launches in the Baltimore and Washington D.C. areas later this year. As the song lyrics go: "A little less talk, a lot more action."
BT revenues for the period ended 31 March 2008 grew two percent year-over-year to GBP5.4 billion (USD10.5 billion), slightly better than expected, thanks to an increase in revenues from what BT refers to as "new wave" services.
New wave revenues, built on broadband and corporate IT services, were up nine percent at GBP2.3 billion and now account for over 40 percent of total revenues.
Not so many years ago the key story was access line attrition. These days, the story is about how fast new services are being created to replace dwindling revenue streams.
And while derided as "dinosaurs," tier one providers for the most part are showing that they can adapt to an environment many simply concluded would kill them.
Mobile social networking is highest in the United States and United Kingdom, The Nielsen Company says.
In the United Kingdom, approximately 810,000 mobile subscribers, or 1.7 percent of all mobile subscribers in the country, visited social networking websites on their mobile phones in the first quarter of 2008. That reach percentage was twice as high as it was in other major European markets, though similar to the United States, where 1.6 percent of all mobile subscribers (4.1 million in all) accessed social networks via their phones in December 2007. For more details on mobile social networking access by country, see the chart below.
In the U.S. market, MySpace.com is the most popular mobile Internet social networking site. The site logged 2.8 million unique mobile users in December 2007.
Also in December, Facebook, which has the second largest audience among social networking sites, had 1.8 million unique mobile users. In contrast, Facebook led mobile social networking sites in the U.K. with 557,000 unique mobile users per month in Q1 2008, while MySpace followed with 211,000 unique mobile users.
While Facebook and MySpace.com were also among the top social networking sites in other European countries during the first quarter of 2008, MSN’s Windows Live Spaces led in Italy (154,000 unique mobile users per month) and France (106,000), and ranked second in Germany (45,000) behind MySpace, which boasted 52,000 unique mobile users per month.
Some statements are astounding first by their seeming ordinariness; others by their seeming incongruousness. For anybody who has watched telecommunications, one of the safest observations, irrespective of year, is that billions of people have never once made a phone call.
So when Ericsson President and Chief Executive Officer Carl-Henric Svanberg says the company vision is "now that basically anyone who wants a mobile phone will soon be able to have one," it is a stunning reminder of just how much has changed in the global communications.
"We envision an all-communicating world where the majority of people everywhere will have access to information and the ability to share it instantly, whenever and wherever they want," Svanberg says. You might find that an unremarkable statement as applied to residents of North America, Europe or Japan. You might be surprised to know that Svanberg really means a majority of people everywhere.
"We aim to do the same for broadband what we have already done for telephony: make it mobile, available and affordable for the majority of the world’s population," he says..
Ericsson also anticipates that by 2013, there will be some 6.5 billion mobile subscriptions and over two and a half billon broadband subscriptions of which more than two-thirds will be mobile. That flip--many more mobile than fixed users--will not surprise anybody who follows the industry. The magnitude of wireless broadband accounts just might.
One might argue that mobile these days is the way people prefer to "talk." Svenberg says mobile also will be the way they prefer to use the Internet and, by implication, large amount of media and entertainment consumption as well.
When Svenberg notes that "users expect to be connected wherever they are," that's pretty much a statement of conventional wisdom these days. When he says "we will also be more personalized," it's doubtful Svenberg could get a dissenting view.
There's perhaps more chance of disagreement--mostly over magnitude--when he says "we will all be content providers and creators." Keep in mind that depending on how far one wishes to take the matter, Twitter and other "where are you know, and what are you doing?" posts are content. So are blog posts.
In another example of developing consensus, Svenberg says "we will be a world of connected devices." That's the machine-to-machine frontier mobile executives now talk about when saying mobile penetration could grow to 500 percent or six hundred percent.
"So far the prime target has been the household and the business," he says. "With mobile telephony we were targeting people." But mobile broadband is about connecting devices as well.
"Our ambition is to do for mobile broadband what we already have done for telephony," he says.
Of course, there are more-practical observations as well. To some extent, new networks are financially justified by the size of new revenue streams that can be created by the networks. Though digital networks were said to improve voice quality over analog first generation networks, more than add new services, by the time we get to 2.5G networks, new messaging services clearly are on the agenda.
Broadband 3G networks more centrally were said to be platforms for new services, though progress to date has been less robust than its backers had anticipated. Coming 4G networks likewise are said to enable many new services 3G networks cannot provide.
That will be true, of course. It also is true that as older generations of networks are decommissioned, the older traffic types are similarly rolled up onto the newer networks. Which leads one to note that no matter what executives say about the matter, the stated unique value of each new network is financially buttressed by revenues from older services that are rolled up onto the new networks.
When fixed broadband was yet a young business, people incessantly looked for the killer app for that service. As it turns out, broadband is itself the killer app. Still, for some providers, an argument could have been made that voice was the killer app.
More currently, some might argue entertainment video is the killer app. The point is that older revenue streams wind up buttressing the business cases for newer networks, irrespective of what executives might claim is the unique value--and business model behind--those networks.
What might be fair is to note that each new generation of networks is touted as featuring, and ultimately does feature, some new class of applications that the older networks cannot support. That's not the same thing as saying any of the new networks will achieve a successful business case based strictly on the lead application. In fact, all the new networks are multi-service networks, with revenue from any number of applications.
There might be signature apps. Texting probably has been the signature 2G app. Mobile Web probably will develop as the signature 3G app. These days 4G networks are said to be about machine-to-machine apps. There will be signature apps. Ultimately, though, the financial underpinning will be all the legacy apps that contribute to the business case.
Comcast is acquiring Plaxo, presumably to further integrate social media, based on address books and the social application Pulse, into Comcast applications.
Plaxo will remain an independent operation in Silicon Valley, reporting into Comcast Interactive Media, which is a division of Comcast that develops and operates Internet businesses focused on entertainment, information and communication.
Plaxo says it already has on its road map projects to socially enable the Comcast media experience on the Comcast.net portal, Fancast and Fandango as well as content on TV screens.
Plaxo already provides the universal address book for Comcast’s SmartZone communications center, and now also hosts all of the address book accounts for Comcast Web mail users.
Plaxo suggests it will help Comcast make “social media” a natural part of the lives of regular people, not just early adopters. Plaxo suggests applications will include the ability to securely post family photos online in Pulse and have them viewable by any of your family members, whether they are online, at work, on their mobile device, or in their living room watching TV.
Comcast also will use Plaxo to create recommendation engines that allow viewers to find new content.
Consider this an example of how social media is a feature, not a business model in its own right.
Some some say they use their DVRs to skip all ads, a recent survey that suggests 100 percent of males in the 55 to 64 age bracket skip all ads is an improbable story.
Approximately 30 percent of online Americans, ages 12 to 64, own or subscribe to a TiVo or a DVR service from their cable or satellite company. And some amount of ad skipping does occur in a fair number of those homes, one has to assume.
But perhaps we should not take literally what some people say they do.
When asked whether they skip ads 100 percent of the time, 52 percent of men ages 55 to 64 said they do, according to research conducted by Frank N. Magid Associates. By comparison, only 21 percent of males ages 12 to 17 report skipping ads all of the time.
There are, to be sure, other studies that suggest ads are more likely to be skipped when time-delayed content is watched. You might ask yourself whether human beings you know tend to do so. You might also ask whether you have seen users--watching content in real time--behave so aggressively that all ads are skipped.
That some people might skip all ads is possible. It probably does happen in some cases. Anecdotally, I'd have to say I've never actually seen a human being behave that way. But then, most human beings I know watch only some time-delayed content. Most of the viewing still occurs in real time, and other studies suggest the amount of ad skipping is far mroe prevalent for time-delayed material.
Customer satisfaction, while important, is not the most-important measure of customer loyalty. In fact, even customers who say they are satisfied are not necessarily "loyal." The converse also now appears to be true. Even "dissatisfied" customers are not "disloyal."
Verizon, for example, gets higher satisfaction ratings than AT&T. But when asked whether they plan to switch providers, Verzon has just a one point lead over AT&T in the loyalty area. Changewave analysts think the Apple iPhone is the reason.
Verizon, the perennial leader in customer satisfaction among cellular service providers, earned a 42 percent "very satisfied" rating in ChangeWave's latest cell phone survey.
Tied for second were AT&T and T-Mobile, each with a 28 percent "very satisfied" rating. As a result, you might conclude, Verizon customers should less likely to defect to another provider. And, to be sure, only 10 percent of its current customers reported they plan to switch to another cellular provider.
But although saying they are less satisfied, AT&T customers who say they plan to switch carrier is just 11 percent. More surprising is the finding that 28 percent of users plan to switch to AT&T over the next 90 days, compared to the 22 percent who plan to switch to Verizon.
Presumably a new customer cannot yet have formed an opinion about the quality of a service. BSo the "switch to" data probably does not provide much indication of user expectations about the quality of service.
The switch indications would fit nicely, though, with an argument that a specific device is pulling new users into wanting a relationship with a carrier.
The Apple iPhone, which looks set to capture more than a third of smart phone sales during the next 90 days, is the answer. Customers are fanatically loyal to the device.
All of which ought to suggest a couple of really important implications. Measuring and creating "customer happiness" does not provide protection against churn. Even happy customers in the wireless and other areas show a marked willingness to churn.
The other thing is the clearly-growing importance of devices as the "thing" determining loyalty and churn resistance. People don't care about their "service providers." They care lots more about their devices.
Economic sluggishness now is hitting teenager discretionary spending. Total teen spending on fashion declined nearly 20 percent on a year-to-year basis, indicating a "discretionary recession," says Piper Jaffray senior research analyst Jeff Klinefelter.
The survey results, from mall research and classroom visits across the United States, as well as 4,500 online survey responses, shows that total spending trends were weakest for young men with a 15 percent year-over-year decline versus an 11 percent year-over-year decline for young women.
While the fashion category represents 41 percent of the total teen budget in the survey, the retail research team notes this allocation is low compared with the past several years.
Klinefelter says "the current economic challenges are impacting consumers at all income levels and ages, indicated by the low level of average planned spending in the fashion category this spring."
Based on the most recent first quarter results from Verizon and AT&T, one would have to conclude that the $99.99 monthly unlimited calling plans introduced in February have not cannibalized revenue.
Verizon reports that 13 percent of its new customers opted for the plan while AT&T had four percent of customers choosing the plan.
Since the number of total users paying $100 or more has been in low single digits, at least as reported by Verizon, it seems clear enough that most customers are trading up the $99.99 plans rather than downgrading from more-expensive plans.
Analysts feared a new price war, but carrier executives seemed to have done their homework on this, and predicted the reaction. Heck, they've probably exceeded their expectations. The bottom line was protecting their base of heavy users.
It now appears the $99.99 plans are adding to the base of higher-average-revenue-per-user customers.
One has to careful making cross-country comparisons, but it appears that Japan's NTT user base is talking less than they used to in 2000, though mobile talking appears still to be growing.
One possible outcome of the $99.99 plans is that more people are going to be tempted to "cut the cord" and abandon their landlines, as one of the obvious problems with wireless substitution is that the added call volume can require a shift to a calling plan containing more minutes.
The $99.99 plans take care of that problem.
So far, social network ad spending is about as concentrated as search advertising is. MySpace alone gets 53 percent. Add in Facebook and two companies control 72 percent of all social network advertising.
It is interesting that widgets have emerged as the only identifiable category among the "other" sites that get some advertising support.
Social networks aren't yet driving a huge amount of online advertising, and might not, say analysts at eMarketer.
Come to think of it, computing in the cloud, as a service, might have some important implications for software distribution and use. Piracy, for example, might be far less a problem.
Although piracy of software on personal computers declined in many countries in 2007, fast growing PC markets in some of the world’s highest piracy nations caused overall numbers to worsen—a trend that is expected to continue. Moreover, dollar losses from piracy rose by $8 billion to nearly $48 billion, according to the Business Software Alliance.
Of the 108 countries included in the report, the use of pirated software dropped in 67, and rose in only eight. However, because the worldwide PC market grew fastest in high-piracy countries, the worldwide PC software piracy rate increased by three percentage points to 38 percent in 2007.
“By the end of 2007, there were more than 1 billion PCs installed around the world, and close to half had pirated, unlicensed software on them,” says John Gantz, chief research officer at IDC.
Among the nations studied, Russia led the way with a one-year drop of seven points to 73 percent, and a five-year drop of 14 points. Russia’s piracy rate is still high, but it is decreasing at a fast pace as a result of legalization programs, government engagement and enforcement, user education, and an improved economy.
The three lowest-piracy countries were the United States (20 percent), Luxembourg (21 percent), and New Zealand (22 percent). The three highest-piracy countries were Armenia (93 percent), Bangladesh (92 percent), and Azerbaijan (92 percent).
For some observers, that might suggest a generally non-touted advantage for Web-based and cloud computing. Users cannot steal software that isn't there.
EarthLink is terminating its Philadelphia Wi-Fi service, after failing to reach agreement with the City of Philadelphia and a non-profit organization to transfer to either the City or to the non-profit the entire $17 million Wi-Fi network, for free, as well as pay cash and donate new Wi-Fi equipment.
EarthLink will continue to provide Wi-Fi service to its customers in Philadelphia during a transition period that will end on June 12, 2008. EarthLink will begin decommissioning the network shortly after the transition period.
That's the story these days: Municipal Wi-Fi is so unattractive a business proposition that assets cannot even be given away.
Silicon Alley blogger Vasanth Sridharan picks five Google Android applications deemed especially cool or useful.
Android Scan scans barcodes on any book or CD when a user is in a store and will pulls up Amazon reviews. The application also will check local library listings to see if the book is available to check out.
CookingCapsules allows users to look up recipes, find a store nearby to get groceries, and provides step-by-step cooking directions.
Eco2Go calculates the carbon footprint a user leaves every time he or she takes a trip, and buys carbon credits to offset the impact.
Locale is a user preferences tool that automatically adjusts ringing or call forwarding rules when a user is in certain locations. At the office, the phone automatically goes on silent. At home, it automatically re-routes calls to a land line.
TuneWiki is a karaoke application and music player for the Android phone.
PubMatic's Web site ad price index indicates that the economic slowdown in the United States is beginning to affect the online advertising industry, with overall monetization dropping by 23 percent. The PubMatic AdPrice Index is based on data from over 3,000 publishers and billions of ad impressions.
The PubMatic AdPrice Index revealed surprising weakness in monetization for the vast majority of Web sites.
Large Web sites fared the worst while small Web sites managed to maintain their monetization rates. eCPMs for large Web sites (more than 100 million page views per month) dropped dramatically by 52 percent from 38 cents in March to 18 cents April. Medium Web sites (1 million to 100 million page views per month) were nearly flat, with monetization dropping from 34 cents in March to 33 cents in April. Small Web sites managed to improve their monetization, increasing from $1.18 in March to $1.29 in April.
Roughly one fifth of all U.S. heads-of-household have never used email, according to Parks Associates. That's not even close to being the most significant implication, though. If the Parks survey data can be extrapolated to the whole population, and Parks Associates believes it can, then Internet subscriptions now reach 82 percent of U.S. consumers.
The most recent annual phone survey of U.S. households found 20 million households are without Internet access, approximately 18 percent of all U.S. households.
“Nearly one out of three household heads has never used a computer to create a document,” says John Barrett, director, research, Parks Associates.
The Parks Associates poll found seven percent of the 20 million “disconnected” homes plan to subscribe to an Internet service within the next 12 months. And "Internet resisters" continue to dwindle.
At year-end 2006, 29 percent of all U.S. households (31 million homes) did not have Internet access. So 11 million more homes have gone online over the past year, if the Parks data can be extrapolated.
One half of those who have never used email are older than 65, and 56 percent had no schooling beyond high school.
Because of significant growth in the Chinese market, In-Stat researchers have revised upwards their forecasts for user-generated video use and revenue.
Total worldwide UGV revenue is expected to eclipse U.S. $1.19 billion by 2012. In-Stat projects 160 billion UGV videos will be viewed in 2012.
Individuals who use mobile phones to participate in online video sites are most likely to contribute to the market, both financially and in terms of content, In-Stat argues.
There are lots of rumors about a possible earlier release of the 3G iPhone as shortages build and we approach the June 2008 date when a 3G-capable iPhone will be released. Something else that actually is more important might also be happening at a faster pace, though.
Since most video viewing is substituted for some other mode (you might watch a movie at a theater, or on a DVD, or as video on demand, or on a premium channel or on broadcast TV), changes in the "release windows" that dictate when each delivery mode can get the content also have the effect of shifting revenue shares within the ecosystem.
According to a report published by Conde Naste Portfolio, Apple is on the verge of offering HBO original programs on iTunes. The programming, which would include hits like the Sopranos and Deadwood, offered at a premium to the standard $1.99 an episode fee.
If true, the deal will be a break in tradition as much for HBO as for Apple, and provide further evidence of a quickening pace of "release window" modifications that have more content going to some form of digital delivery.
Adult consumers in the United States still spend more time in front of televisions than they do online, according to a survey sponsored by the Television Bureau of Advertising industry association and conducted by Nielsen Media Research.
Survey respondents ages 18 to 34 spent over an hour per day more watching TV than they spent more time watching TV than they did in online pursuits, the study found. The gap between time spent online and time spent watching TV is closing, however.
In January 2008, TVB found that 18 to 34 year-olds spent 60.6 minutes more watching TV per day (206.0 minutes) than they did online (145.4 minutes). That is down from June 2006, when the gap was 137.4 minutes: 246.7 minutes for TV and 109.3 minutes online. Moreover, TV time decreased while Internet time increased.
A separate study by JupiterResearch and Ipsos Insight reported results in more discrete age groups and found that TV use actually trailed Internet use among the youngest consumers. As of August 2007, US consumers in the 18 to 24 year-old range went online an average of two more hours per week than they spent watching TV.
Neither study specifically addressed multitasking, which can be significant, especially among younger consumers.
"Young people rarely use just one medium at a time," says Debra Aho Williamson, senior analyst at eMarketer. "Often, when they are online, they’ll have TV or music on in the background."
One might be skeptical about a couple elements of both surveys. The TVB study suggests that adults between 18 and 34 spend 115.6 minutes a day listening to the radio.
The Jupiter and Ipsos survey suggests adults 18 to 24 spend three hours a week listening to the radio.
My totally unscientific experience is that none of my 18 to 24 year olds spend any time at all listening to the radio. For similar reasons, I am somewhat skeptical about "time spent in front of the TV."
As markets change, so do metrics. It used to make sense to count "access lines." Not any longer. These days it makes more sense to count "revenue generating units." And at least in Verizon's case, it is starting to make less sense to count "digital subscriber lines," as FiOS increasingly becomes the lead broadband access product.
To be sure, broadband access markets also are nearing saturation. Most customers who want broadband already buy it. But as Verizon replaces copper plant with FiOS, DSL connections will decline, to be replaced with optical connections.
IGI Consulting points out that Verizon's rate of net additions of DSL subscribers has been slowing for a couple of years. Again, some of that is market saturation, some of it is FiOS replacement. But rates of increase for any product slow as demand is satisfied. Rates also decrease when product substitutes are offered.
In the first quarter of 2008 Verizon FiOS TV customers accelerated to 263,000, a sequential increase of 16 percent. Verizon now has more than 1.2 million FiOS TV customers,19 percent penetration of marketable homes. Over the past year Verizon has added more than 850,000 FiOS customers.
Total broadband subscribers, including DSL plus FiOS internet increased to 8.5 million up 1.1 million or 15 percent from a year ago. Verizon added 266,000 broadband customers in the quarter. FiOS Internet access customers now represent over 1.8 million subscribers, representing 23 percent penetration of marketable homes.
U.S. Internet users viewed 11.5 billion online videos during March 2008, representing a 13-percent gain versus February and a 64-percent gain compared to March 2007 viewing, according to comScore.
Google Sites again ranked as the top U.S. video property with more than 4.3 billion videos viewed (38 percent share), gaining 2.6 share points over February. YouTube.com accounted for 98 percent of all videos viewed at Google Sites.
Fox Interactive Media ranked second with 477 million videos (4.2 percent), followed by Yahoo! Sites with 328 million (2.9 percent) and Viacom Digital with 249 million (2.2 percent).
Nearly 139 million U.S. Internet users watched an average of 83 videos per viewer in March. Google Sites also attracted the most viewers (85.7 million), where they watched an average of 51 videos per person. Fox Interactive attracted the second most viewers (54.3 million), followed by Yahoo! Sites (37.5 million) and Viacom Digital (26.6 million).
Altogether, 73.7 percent of the total U.S. Internet audience viewed online video during March, comScore says. The average online video duration was 2.8 minutes and the average online video viewer watched 235 minutes of video.
It is said one of the three largest U.S. cable operators now is using technology from Procera Networks to classify and prioritize packets on a much more granular basis than simple Multi-Protocol Label Switching would imply.
Traffic shaping, though some object to its use, seems not to be an optional practice anymore, as the Internet increasingly is asked to supply real-time services such as voice, video and audio that are tough to deliver with assured quality.
That's a big change for the Internet, to be sure. But it seems an irreversible change, precisely because the Internet and other IP networks now are asked to support real-time services that require quality of service control.
Procera Networks announced availability of the PacketLogic PL10000, the latest in the PacketLogic family of deep packet inspection products and said to be the industry's highest-performance DPI platform, with four times the capacity of its nearest competitor.With up to 80Gbps of throughput, PacketLogic PL10000 is purpose-built with tier one broadband network deployments in mind.
Generally available now, the PacketLogic PL10000 already has four service provider customers from around the world and is currently operating in production networks, said to include at least one of the largest three U.S. cable networks.
Procera Networks systems are used by universities and colleges to manage recreational Internet use at times of peak load, prioritizing academic applications. Some university users say compliance with copyright laws is another reason the Procera Networks solution makes sense.
There's a broader issue here. The Procera approach is in line with thinking that it is not enough to prioritize broad classes of applications. According to a developing line of thinking, service providers need to categorize and control specific applications and specific Web sites, or possibly specific users at specific times of day, not simply "real time" traffic or "email" or "file transfers.
That of course will strike some observers as a dangerous violation of historic Internet "anybody can connect to anybody" norms. But the Internet is changing, not least because users want high-quality voice, video and audio performance, and packet classification is a major tool to allow that sort of choice.
There are, to be sure, anti-competitive implications if an access provider wants to behave that way. One has to assume market forces and governmental action will dampen those impulses.
No doubt about it: the Internet is changing.
Sprint Nextel CEO Dan Hesse thinks the hits to operating income will stabilize by the end of 2008, so it is going to be a long year. Hesse declines to comment on speculation about a Nextel spin off, saying only that it might be complicated for technical reasons related to the way the company manages the separate Sprint and Nextel networks.
Tackling the churn problem is the number one job for the rest of the year, as day-to-day management of the WiMAX initiative will be handled by Clearwire executives.
Communications--in the form of social networking--might be more important than content for the developing mobile Internet use. Or at least that's what analysts at Informa suggest.
Mobile social networking is based more on communication than content, the thinking goes. Time and again, communication services have led the way for content and advertising to follow, Informa argues. In the case of the Internet, it was e-mail and discussion boards—not Web pages—that triggered the explosion from early adoption to mainstream consumer use. In the mobile arena, the first really successful data service was text messaging. Short message service services drove mobile data use and they still account for the majority of mobile data revenues by carriers.
According to February 2008 research by Informa, the global market for all current forms of paid mobile entertainment should reach $31.7
billion by 2012. That's a lower forecast than predicted in 2006, when Informa suggested paid mobile entertainment would reach $42 billion by 2011.
In the U.S. market alone, mobile data service revenues reached $23 billion in 2007, according to industry trade group CTIA. Mobile messaging for SMS/MMS/IM/e-mail worldwide is expected to be between $100 billion and $200 billion by 2011.
It might be over-reaching to describe every population of application users as an actual community, but each might be considered a passive, or potential community.
And much as instant messaging platforms frequently are referred to as creating social networks, so email communities in some ways also create the foundation for social networks of extremely large size.
The leading email providers in the U.S. market, for example, can claim as much as 1.3 billion accounts.
Dean Takahashi of VentureBeat asks a good question: "Is Facebook a video game?" The question is of immediate importance for the video game industry. "Funware," applications with game-like mechanics and game-like behavior, just might steal the thunder from video games, which may no longer have a monopoly on either interactivity or fun, Takahashi argues.
Web-based social interaction is changing the way that many people entertain themselves. Ask anybody who has discovered that Facebook is a "time waster."
Funware includes applications such as eBay, which made it fun to earn rewards as a competitive buyer or seller on its auction site. The term may also be applied to alternate-reality games such as “ilovebees.com,” where masses of players collectively solved a mystery about an invasion of earth.
The Google Image Labeler, created by Carnegie Mellon University researcher Luis von Ahn, is built around a game where two people try to simultaneously label an image and, without being able to communicate, try to come up with the same label for the image as the other person. The game also helps Google improve the accuracy of its image searches.
Flickr traces its origins to game industry veterans Stewart Butterfield and Caterina Fake, whose team stumbled upon photo-sharing while they were trying to make a game.
One of the ominous things for the video game industry is that almost none of these Funware ideas or businesses have come from game companies, which are now failing to catch on to an expansion opportunity, says Takahashi.
Funware game mechanics include things like leader boards, tournament challenges, ratings systems, badges for accomplishments, levels, and other things that can boost user engagement. Users find these features enticing because they elevate the user’s status in the eyes of the community.
Anybody who thinks high-speed Internet access is not being offered to rural customers should take note: Mediacom Communications, which serves 1,500 non-metro communities scattered throughout 23 states, is upgrading its top of the line 15 Mbps service to 20Mbps downstream, 2Mbps upstream, by the end of June 2008.
That isn't to say rural penetration is as high as it is in urban or suburban areas, or that the number of providers is greater or that speeds are higher.
It is to say that rural providers know they've got to do better, and most executives at most companies have plans to upgrade.
Some financial analysts don't like prospects for the new Clearwire, says Eric Savitz Barron's writer. Savitz notes that Citigroup’s Michael Rollins dropped his rating on Clearwire to "sell" from "hold," because the stock now trades at a “substantial premium” to fair value, which he puts at $13 a share, down from a previous estimate of $17.
Rollins says there are a host of challenges ahead for the new Clearwire, including coverage reaching less than half the U.S. population by 2010. There is an unclear path to dual-mode devices to leverage Sprint’s CDMA coverage.
The business plan remains underfunded and other mobile providers will be launching their own fourth-generation networks in 2010 or 2011. Rollins also sees potential channel conflict among the partners.AT&T, in conjunction with some 10-15 incumbent telecom carriers, said to include British Telecom, Deutsche Telecom and NTT among them, is plotting to launch a Skype competitor, according to ThinkEquity analyst Anton Wahlman.
It's a speculation at this point, but note that BT has discontinued its original BT Communicator and is rolling out a new soft client on May 28, which removes free calling functionality to people who are not users of the new BT soft client, using BT broadband access.
At the very least, the move suggests an attempt to tie soft client use to BT's broadband access service, which also would be a logical move for any broader consortium of carriers. Basically, it would be a big move into voice peering.
Some observers say carriers will have a hard time creating such a venture. Others say disruption, even to such a popular application as Skype, is less a hurdle than many think.
To answer the obvioius objection that carriers will not want to cannibalize their own long distance calling revenues, the requirement to buy broadband access from one of the participating peering members is the answer. Lost revenues on global long distance hopefully are balanced by increased uptake and reduced churn for carrier broadband offerings.
Om Malik says TalkPlus is in danger of tanking. Michael Toepel, who was the CEO, recently left after the company failed to get new investment to keep it going, Malik notes.
Cbeyond's experience selling Microsoft applications and BlackBerry wireless services illustrates a trend in sales of telecom-related products. As it turns out, increased product complexity, and a broader range of new products, is leading to disproportionate sales results. To be specific, most of Cbeyond's application and wireless sales are made either by its direct sales force or by more-technical solution providers, rather than by Cbeyond's other channel partners.
That matches with what most service providers report: that IP services require more technical knowledge, and possibly more technology capabilities, than has been the case in the past. That portends changes in channel partners. Namely, more reliance on value-added resellers and value-added distributors, consultants and system integrators; less reliance on other partners.
About 14 percent of U.S. adults are cord-cutters, using wireless-only voice, up from about 10 percent in 2006. The percentage of adults with landline phones also has dropped slightly to 79 percent from 81 percent over the same period, according to Harris Interactive.
Vonage's financial performance in its most-recent quarter was better than it has seen in some time. Revenue was up 15 percent year over year and up four percent sequentially. The company reported positive operating income compared to a double-digit loss in the same quarter last year. Average revenue per user was up, both year over year and sequentially.
One might still question how well Vonage will do compared to cable VoIP customers, but the market is growing. According to Harris Interactive, VoIP use has increased to 15 percent of U.S. users.
Vonage also inked a deal with Covad allowing Vonage to offer a dual-play offer including 3 Mbps or 6 Mbps digital subscriber line service in addition to voice. It isn't immediately clear how many potential customers will want to use Covad's "voice optimized" access, but that will improve user perception of voice quality.
Vonage Holdings Corp. recorded revenue in its first quarter 2008 up 15 percent from $196 million in the first quarter 2007 and up four percent sequentially, driven by an increase in subscriber lines and higher average revenue per user. Vonage also reported a GAAP net loss of $9 million, down from a loss of $72 million in the first quarter 2007.
Adjusted operating income was $8 million in the quarter, a significant improvement from an adjusted operating loss of $58 million in the year-ago quarter.
Average monthly revenue per line in the first quarter 2008 was $28.85, up from $28.31 in the year-ago quarter and $28.19 reported in the fourth quarter 2007. Average monthly telephony services revenue per line for the quarter increased to $27.87, up from $27.36 reported a year ago and up from $27.42 sequentially.
On a per line basis, average direct cost of telephony services was $7.26, down from $8.03 in the year ago quarter and up from $7.11 sequentially.
Direct cost of goods sold was $22 million, up from $13 million in the year-ago quarter and $17 million in the prior quarter as the Company utilized a large portion of its remaining inventory of higher cost CPE devices. Direct marginn remained flat year-over-year at 65 percent.
Selling, general and administrative expense was $79 million, down from $91 million in the year-ago quarter, and flat sequentially.
Marketing expense for the quarter was $61 million, or 27 percent of revenue, down sharply from $91 million, or 46 percent of revenue, a year ago, and down from $63 million, or 29 percent of revenue, sequentially.
Marketing cost per gross subscriber line addition was $216 in the first quarter 2008, down from $273 in the year-ago quarter and $223 sequentially.
The company expects SLAC to increase in the second quarter, consistent with prior year seasonal trends. Vonage expects to gradually increase marketing expenditures in the second half of 2008 to accelerate growth but continues to expect the cost of acquisition to fall within $225-$250 for the full year 2008.
Vonage added 30,000 net subscriber lines in the first quarter 2008 and finished the quarter with more than 2.6 million lines in service.
Vonage also announced a relationship with Covad whereby Vonage will offer a DSL service to both residential and small business customers. The Company expects this new service, called Vonage Broadband, to be available to customers by the end of the year.
Average monthly customer churn increased to 3.3 percent in the first quarter 2008 from three percent in the fourth quarter 2007. The company says it believes it has improved customer service enough that lower churn will result, in the second quarter.
eMarketer forecasts that mobile social networking will grow from 82 million users in 2007 to over 800 million worldwide by 2012.
"This population will comprise current online social networkers who are extending their digital lives to mobile as well as a growing number of mobile-only social networkers," says John du Pre Gauntt, eMarketer senior analyst.
In fact, mobile might be the best way to interact with social networks, if you think about it. Since much social networking is about where you are and what you are doing, it makes sense that the always-with-you mobile is going to spur more-frequent interactions. It's somewhat akin to what happened with picture taking when mobiles routinely were outfitted with cameras. People started taking more pictures.
For example, MySpace recorded over seven million unique visitors to MySpace Mobile in the United States in the six months since launch. "It wasn't until we rolled out m.myspace.com that we got a sense of how powerful demand was for MySpace on cell phones," says Brandon Lucas, MySpace senior director.
As the user base grows, marketing and sales professsionals will start to pay more attention to how to take advantage of the sharing effects.
Provo, Utah's citywide fiberoptic network has been sold to Broadweave Networks, a local company that hopes to make a business out of triple-play services where Provo had not been able to do so. The network, called iProvo, was the largest municipally-owned fiber-to-the-premises network in the United States, reaching all 36,000 residences and businesses within the city.
Up to this point, Broadweave has served the Traverse Mountain planned community of 8,000 homes and 4.5 million square feet of office and retail space across 3,000 acres in Utah's technology belt. So the acquisition gives Broadweave about four times more homes passed than it currently has access to.
Broadweave will purchase the fiberoptic network for $40.6 million, which is enough to retire outstanding bonds incurred by Provo to build the system.
Under the terms of the deal, which is subject to municipal council approval, the city retains a license to use the network to connect city buildings, schools, and power infrastructure. Broadweave will operate as a retail provider, rather than as a wholesale provider of transport to third parties and says it will put more emphasis on services aimed at business customers.
One might draw several conclusions from iProvo's experience so far. Some will argue that overbuilders are going to have a tough time competing against both cable and telephone companies offering triple play services.
Others will say the sale shows municipalities really should not be running communication networks. Some will point to other fiber access networks in the Salt Lake City and Provo regions and argue that neither wholesale nor retail strategies have worked well.
The issue is what Broadweave's new management thinks it really can do to improve financial performance. One of the salient features of most networks serving entire communities is that there is an 80/20 rule for revenue. A small number of neighborhoods actually produce most of the revenue.
In fact, some studies suggest that as few as five to seven percent of neighborhoods of 500 homes or so produce half the revenue created by an entire citywide network. And the same sort of thing is true for business revenue as well. So it might not be so easy to boost revenues.
Broadweave will gain some scale benefits, though the difference between 8,000 and 44,000 might not be as large as you might think. Programming contracts won't be noticeably affected. There might still be a need for two headends. Installers can only do so many jobs a day. Some marketing and other overhead can be spread over a wider base of customers, of course.
Still, operating cost savings are unlikely to change the financial picture all that much. Only significant new sales volume is going to change the current iProvo financial model.
More than 90 percent of enterprise mobile applications spending is now focused on mobile email and messaging, but the percentage of spending on mobilizing other critical enterprise applications -- many of them broadband-optimized -- will increase rapidly over the next five years, according to Pike & Fischer. The research house projects 2012 spending on mobilizing such applications as customer-relations management and sales-force automation will exceed $10 billion annually.
Jangl, the Internet phone company is being closed down, after efforts to find a buyer failed. Most of the team are joining Jajah.
Google and several cable operators got some goodies in addition to equity in the new Clearwire national WiMAX network. And the advantages do not come from WiMAX, but from the Sprint 3G network.
Briefly, Google apps (YouTube, Google Maps, Gmail) get premiere placement on some Sprint devices, while Google Web, local search and location information become the default options for Sprint data customers.
The cable operators become resellers of Sprint 3G services, including voice. So now the three operators will be able to construct quadruple play services. That is the more important development, as interesting as the Clearwire resale agreement is. In the near term, cable operators need a viable mobile voice option more than they need a future mobile broadband option.
To be sure, Google and the new cable investors will become resellers of the WiMAX network as well.
Google will partner with the new Clearwire in the development of Internet services, advertising services and applications for mobile WiMAX devices. In addition, Google will be the search provider and a preferred provider of other applications for the new Clearwire’s retail product. As an open network, anybody can "partner" with Clearwire to develop applications or supply devices. But Google is a "preferred" and "default" provider, which historically has real value in the mobile arena.
The new Clearwire will support Google’s Android operating system software in its future voice and data devices that it provides to its retail customers.
But Sprint and Google have also entered into an agreement whereby Google will become the default provider of web and local search services, both of which will be enabled with location information, for Sprint, as well.
Sprint will also preload several Google services, including Google Maps for mobile, Gmail and YouTube, on select mobile phones and provide easier access to other Google services.
Comcast, Time Warner Cable, and Bright House Networks will be resellers of Clearwire’s mobile WiMAX service. More important, over the near term, all three cable operators now will become wholesale retailers of all Sprint 3G services, including voice services.
Clearwire is getting the attention. But Sprint 3G will be where the action is.
Of the 90,000 the net additions Qwest had for high-speed access in the most recent quarter, 13,000 (14 percent) of them were related to the new fiber-to-the-node build-out. You might think, "so what?"
Those customers were gotten in just 30 days, in the last month of the quarter, so it appears there is strong demand for a higher-speed (12 Mbps or 20 Mbps) product.
Qwest also appears to be readying an "over the top" video on demand service in conjunction with DirecTV, which already supplies Qwest linear entertainment video services. That would make perfect sense for both companies. DirecTV needs more bandwidth on the ground to serve up an effective VOD service, and Qwest has the bandwidth.
Qwest also has been an effective retail partner for DirecTV services, so the any new offer would make sense to consumers who already buy DirecTV from Qwest.
"We are hopeful to take advantage of video on demand with our DirecTV," Mueller says. Qwest is "preparing for the natural synergies between their video on demand product to launch this year and our investment in broadband capabilities."
And high-speed access prices will rise. "We will do price increases, that is our plan," says CEO Ed Mueller. The logical path is to create higher-speed tiers and then charge more for them. People understand that sort of packaging.
Under the current challenging circumstances, "typical" or "normal" performance is a good thing. And Qwest Communications International reported "steady operating results" for the first quarter of 2008. Adjusted EBITDA totaled $1.14 billion with adjusted EBITDA margins of 33.6 percent as data, Internet and video revenue grew by nine percent compared to the first quarter of 2007.
Broadband subscriptions were up 17 percent year-over-year while video subscribers were up 42 percent, year over year. Total data, Internet and video services revenue now represents nearly 40 percent of operating revenue.
The business market segment reported revenue of $995 million in the first quarter, up 3.1 percent year over year as data and Internet revenue grew 6.9 percent. Data and Internet revenue grew 29 percent over the same period a year ago.
Mass markets revenue was $1.48 billion in the quarter, a 0.7 percent decline compared to the prior year. Data, Internet and video revenue growth of 20.7 percent was offset by declines in both voice and wireless services.
Consumer average revenue per unit increased 7.8 percent to $55 from $51 a year ago. Qwest Broadband subscribers increased 90,000 in the quarter to reach 2.7 million, up 17.2 percent from a year ago.
Wholesale Markets reported revenue of $841 million in the quarter, down seven percent year over year largely due to long-distance revenue pricing and supplier consolidation. Data and Internet revenue was up three percent year over year.
Vodafone UK has created a new plan that aims to remove the barrier to use of mobile email and mobile Web access, allowing 500 megabytes of data use each month on plans costing GBP 25 or more.
Postpaid customers who take a GBP 40 or higher package also will be offered a choice of unlimited text messages, unlimited landline calls or unlimited Vodafone to Vodafone calls, as well.
This move essentially sweeps away the last remaining cost barriers to entry for both mobile email and the mobile Internet, helping Vodafone UK to make mobile data more applicable to the mass market, says Emma Mohr-McClune, Current Analysis principal analyst.
The new plan will encourage more users to experiment with the mobile Internet. For customers who do not want the mobile data feature, Vodafone allows a monthly discount of GBP 5.
Standalone mobile data pricing currently runs about GBP 7.50 a month, Mohr-McClune says. "This is the first time" that a U.K. operator has offered bundled mobile Web access and email across its entire pay monthly portfolio, starting at GBP 25 per month.
One of the enduring claims observers make about the state of U.S. broadband is how woeful it is compared to other nations around the world. Consider France, which deregulated its telecommunications market in 2004, leading to heavy competition. In fact, broadband now is nearly synonymous with Internet use.
In March 2008, 93.5 percent of at-home Internet users in France enjoyed a broadband connection to the Internet, down slightly from the 94.2 percent who did so in the previous year. That's significant. The primary reason consumers buy broadband access is to use the Internet. Someday that will change, but right now broadband really is a way PCs can connect to the Internet.
So 94 percent of all home users of the Internet use broadband to do so. That's serious penetration. So note that about 52.4 percent of French homes had a broadband connection in 2007. That's a bit higher than U.S. broadband penetration, which is just about at 50 percent.
The point is that France has been highly successful at getting broadband adopted by Internet users. Fully 94 percent of all Internet users have broadband.
But note that household penetration is about 52 percent. There seem to be more dial-up users in the U.S. market than in France. But the point is worth noting: household penetration might not be the best way to measure penetration.
A household that doesn't use the Internet is hardly a candidate for broadband aimed at Internet users. The more relevant measure is how far broadband has penetrated homes where the Internet actually is used.
As reported by Silicon Alley Insider, RBC analyst Mark Abramsky thinks Apple will sell 14 million phones this year, up 40 percent from his previous prediction of 10 million and more than eight times the 1.7 million phones the company sold in the first three months of the year. He also thinks Apple will sell 24 million iPhones in 2009.
The 3G model will help. So will new carrier deals in Europe and Asia, broader consumer interest thanks to Apple's forthcoming apps platform, and broader corporate interest.
He also thinks Apple might drop or reduce exclusivity requirements in some markets. This would let people buy iPhones without being forced to use Apple's hand-picked carrier partner.
He also thinks Apple will allow carriers to subsidize pricing, and also will allow sales of unlocked phones.
T-Mobile USA has taken the first commercial step in the roll-out of its third-generation (3G) wireless network, launching its UMTS/HSDPA network in New York City. Also, contrary to some early reports suggesting only voice service might be available immediately, the network will be data-enabled from the start.
T-Mobile plans to continue the rollout of its 3G network across major metropolitan markets through the year. By year's end, T-Mobile expects its high-speed data network will be available in those cities where a majority of its subscribers currently use data services.
Yay!
ABI Research projects that 100,000 femtocell units wll ship in 2008. Volume deployments won't begin until 2010, when $100 price points will be possible, in volume. The other issue is whether femtocells are embedded in other widely-used consumer gear, such as Wi-Fi routers.
The really critical issue will be whether initial carrier deployments are supported by robust business models and service plans that extend beyond pure fixed-mobile substitution goals,” says ABI Research vice president and research director Stuart Carlaw.
The issue there is that some innovations are very useful and widely deployed, but don't necessarily create a business model. Wi-Fi is the best example of that. So one has to wonder whether femtocells will wind up being a very-useful technology--reducing service provider investment in macrocells, for example--or whether a new revenue stream of some sort can be created.
The most obvious example would be enhanced ability fo wireless providers to compete effectively in the wireline substitution business, where the new revenue stream is cannibalization of fixed line subscriptions. The other obvious issue is ability to sell voice-optimized fixed line broadband subscriptions.
Mashup tools have so far been used mostly for simple enterprise applications like adding geographical information--typically Google Maps--to corporate data. But that's changing. IBM, for example, has introduced two offerings for building mashups that pull together data from multiple data bases and applications.
One of the tools is aimed at non-technical users while the other development is a mashup environment. WebSphere sMash supports dynamic scripting languages and widget-development tools. IBM Mashup Center allows business users to drag and drop components from local, enterprise and Web sources to create new applications.
JackBe Corp. and Kapow Technologies also have added support for Excel to existing mashup tools.
JackBe uses a plug-in is connected to a spreadsheet so that whenever data is changed, the Presto server updates the data, allowing the most-current version to be consumed by other applications.
Kapow sells an on-demand enterprise mashup service that allows companies to incorporate data from various Web sites and services directly into Excel spreadsheets.
Widevine Technologies has announced immediate availability of Widevine Cypher to protect content delivered to Microsoft Windows Media Player versions 9, 10, 11 and Silverlight versions 1 and 2.
The new capability means content now can be securely delivered in Windows Media, Silverlight and Adobe Flash environments using a single content protection solution. The innovation is an example of lots of the important "wrap around" features that will be necessary if digital content businesses are to be built with any scale.
More than a third of U.S. consumers born before 1946 (seniors) use the Internet, according to Pew Internet and American Life Project. Pew also said that more than half of the younger members of this group (ages 62 to 71) are online.
Older users also use the Internet for the same reasons younger users do: to stay in touch with other people. Nearly six out of 10 U.S. Internet users 62 and older use search engines. Among other activities, almost one quarter of the group banks or pays bills online and one fifth are video gamers.
Multichannel video, PCs, game consoles, mobile voice and use of the Internet now are totally mainstream.
Use of digital video recorders is nearing that point, as are text messaging and MP3 players.
But there's still a ways to go with other innovations such as VoIP and mobile broadband. Unified communications is no where close to being mainstream. It typically takes three to seven years for a successful mass market digital innovation to reach 50 percent penetration of households.
The big exception is high definition television, which will reach--and surpass--that status virtually overnight as a result of government mandate in February 2009.
As for the thousands of other bleeding-edge applications, most will fail to gain widespread mass market adoption. That's always the case for digital consumer electronics.
Whatever instability may be coming in some parts of the U.S. VoIP market, global growth--especially in Europe--is robust. The most recent analysis by iLocus shows 67 percent annual growth in VoIP server licenses sold globally, with traffic up 35 percent.
For the second consecutive year, Europe outpaced rest of the world in VoIP penetration. All major European operators--whether wireline or wireless--have a VoIP offering in place and have announced that they will be deploying IMS platforms.
The difference between deployments in the U.S. and European markets is the attitude and actions of incumbents. In the U.S. market, incumbents have not yet decided to make a major effort to sell VoIP; in Europe that already has happened. Because of carrier reluctance, challengers, especially the cable companies, have made significant market share gains.
What happened in Europe will happen in the U.S. market, however. At some point, AT&T and Verizon will decide to push VoIP aggressively, and the dynamics of the market will shift as much as they have in the fdial-up and broadband access markets, which initially were dominated by independent providers.
But fixed line replacement isn't the only place to watch for change. VoIP as a mobility and Web or enterprise application is early in its development right now. Though it might seem inconceivable, revenues from those sorts of applications will one day be significant. If that is not apparent it is simply because applications and business models in the mobility and Web and software spaces are seminal. Even Skype, as popular as it is, only represents two percent or so of global long-distance traffic, for example. So it will take some time before anybody notices.
Still, note that nearly 25 percent of mobile virtual network operators--wireless providers that do not own their own networks--already offering or testing mobile VoIP. By 2010 more than two thirds say they will have a mobile VoIP offering in place.
Scottsdale's muni Wi-Fi network, operated by Wildfire Broadband, has gone out of business, according to the Scottsdale, Arizona-based East Valley Tribune. As has been the case for nearly all other municipal Wi-Fi efforts, the networks have failed to attract enough customers.
It is reason at this point to theorize that mobile broadband--both data cards for PCs and smart phones--arecannibalizing some of the potential demand. Some of the remainder of demand is satisfied by free Wi-Fi at coffee shops, hotels and other locations.
Wi-Fi is a great technology. It just might not be much of a service provider business.
BroadSoft has announced compliance with the 3GPP Multimedia Telephony standard and launched BroadSoft Xtended, an initiative to open its functionality to makers of Web-based and productivity applications. At the same time, BroadSoft has created at developer program
The trio of moves might be viewed in several ways. Most significantly they reflect BroadSoft's belief that the next wave of growth will come from mobile applications and integration of core communications capabilities with all manner of Web and enterprise applications.
At some level the moves also signal that the significance of hosted communications is not limited to replacing legacy Centrex or phone systems, but is part of a larger move towards more sophisticated communications capabilities for many, if not most, Web and enterprise applications.
It's a tough market to quantify, but looking at the size of unified communications services is a part of the whole picture. Ultimately, some communications service revenue will shift from existing categories to "Web enabled" categories.
Beyond that, some of the value will be intangible, such as "stickiness" leading to lower churn or higher ad revenues. Over the near term, unified communications "revenue" will be hard enough to quantify. Web-based rich communications will be even tougher.
"The full-blown developers program and an online marketplace will enable service providers and end users to download applications that integrate BroadWorks with a wide range of productivity, personal, and social applications," says Joe McGarvey, Current Analysis principal analyst.
While the transformation of services to IP presents opportunity for BroadSoft, it also creates challenges. While the company is well-recognized as a leading provider of enhanced VoIP applications, its application suite is also considered by some service providers to be overkill for residential services, says McGarvey.
At the low end of the application server market, BroadSoft faces significant challenges from traditional telecommunications equipment makers, e.g., Alcatel-Lucent, Thomson/Cirpack, MetaSwitch and Sonus.
McGarvey says it will be important for BroadSoft to capture the middle ground of the application server market, where service providers are looking for some enhanced features but do not require the complexity of applications associated with PBX replacement.
To be successful in this space, BroadSoft needs to move down the complexity curve than it is for challengers to move up, McGarvey says.
To be sure, BroadSoft now finds itself challenged by a new set of competitors, including softswitch providers, which have been gradually increasing the breadth and sophistication of their Class 5 application offerings.
Ultimately, market success might not be as dependent on unique features as on ability to make those features available widely on mobile, Web and enterprise applications.
If T-Mobile USA parent Deutsche Telekom does decide to attempt an acquistion of Sprint Nextel, and if that bid were to succeed, T-Mobile would emerge as the largest U.S. mobile provider by quite some measure.
Up to this point AT&T, Verizon Wireless and Sprint Nextel have held roughly equal shares of the market, and all three have had more than twice the market share of T-Mobile.
There are many regulatory, technical and even psychological issues to surmount, though.
Consider that T-Mobile and Sprint now operate three classic mobile air interfaces. Xohm will create a fourth. And then there's Long Term Evolution. Complexity means cost, and that's t0o many different networks to continue operating.
Still, Sprint's low stock price and strong Euro have to be driving some hard thinking about the feasibility of pulling such a merger together. Regulatory or other concerns might ultimately deter making of an offer, or scuttle a merger attempt.
But it would be a transformative move for T-Mobile.
Before any form of on-demand media can be watched or purchased, it has to be found. That's been a growing issue even for linear media as channel counts have risen over the last two decades, not to mention user-generated video found only on the Web, or the growing range of on-demand video options.
In a parallel but almost-perfect metaphor, paper "viewing guides" have become dysfunctional. Even in the walled garden, linear programming, one screen world, there's just too much information, and too many choices, to display. And that means content isn't found.
Those of you who use the Netflix or Blockbuster DVD rental services, or simply try to find something to watch online, will understand the greater problems beyond linear-formatted TV. Search engines are helpful to the extent of locating pieces of content.
The channel's research suggests its viewers purchase 24 percent more pay-per-view titles than non-viewers.
Also, in a recent study, 76 percent of users said they found out about a movie they had never heard of by watching the channel. About 21 percent watched a movie on premium services because of something they had seen on ReelzChannel. Another 16 percent ordered video-on-demand or pay-per-view titles, the company says.
Some 87 percent of those polled say ReelzChannel's “What2Watch“ promos were helpful when making a viewing decision.
Azaire Networks, which sold a fixed mobile convergence security gateway product, has gone out of business, iLocus says. IPXstream/IPtelephony.org, a content and newsletter provider, also has gone under.
There always are periods of consolidation after big investment waves, and we are at the front of a winnowing process that already has claimed Pulvermedia and Verso.
Similar contraction cycles hit venture-funded CLEC and Internet firms between 2001 and 2003. Now it is VoIP's turn.
The next cycle, which will not begin for some time, is a similar weeding process for consumer-focused video start-ups.
O2 will extend its broadband coverage to the whole of the United Kingdom using BT's wholesale broadband network. O2 also seems to have earmarked a sizable amount--£6m (€7.7m)--to grab new customers.
O2 can do so because BT has created a separate business unit that sells wholesale broadband access to any retailer that wants to use it. The U.S. policy framework took a different route, and relies on vigorous competition between the local cable and telephone companies.
One might argue we'd see faster uptake, but less innovation using the functional separation model. Conversely, slower diffusion but more differentiation using the U.S. model. There are different benefits.
After a slower start, it looks as though access speeds and "price per megabit" propositions, plus managed services wrapped around the access, are finally starting to get interesting in the U.S. market.
Some observers might argue that most mobile users do not really want to watch TV on their handsets all that badly. Others might argue they'd like to, but the small screen or shortened battery life are barriers. Some would say the logical use is short form video to fill interstitial time, not long-form content or TV shows. Others will say people don't want to pay as much as carriers now charge.
All these objections have some merit. But what might be most significant is the limited amount of linear content people can get.
AT&T's new video service will deliver 10 television channels for a fee of $15 a month.
AT&T Mobile TV will be available in 58 markets including Atlanta, Chicago, Los Angeles and New York.
Two handsets are available immediately, the LG Vu, which sells for $299.99, and the Samsung Access, which sells for $199.99.
Observers often note that a typical TV viewer only watches about seven channels. The problem is that every person uses a different mix of seven channels. And that's the issue for AT&T and Verizon.
AT&T Mobile TV delivers CBS Mobile, Comedy Central, ESPN Mobile TV, Fox Mobile, MTV, NBC 2Go, NBC News 2Go, Nickelodeon, Sony Pictures and CNN Mobile Live.
Nokia and T-Mobile have signed a deal that has Nokia supplyng T-Mobile with phones especially tailored to provide easy access to T-Mobile’s “web’n’walk” internet service and Nokia’s mobile portal Ovi.
The two companies also saythey will work on making social network sites more mobile, and will cooperate on creating mobile widgets to create a “richer” user experience for T-Mobile’s web’n’walk service.
A couple of angles: Nokia supports its own content portal; T-Mobile, despite that possible conflict, needs Nokia to optimize handsets for web'n'walk. That's co-opetition, to be sure: competing and collaborating all at the same time.
Enterprise IT managers generally consider Facebook a huge time waster. They might be right. Most of the applications created for Facebook so far are of the playful sort, with no direct business application.
Still, there's more than a smattering of tools that can have business application, beyond the ability to create business-focused social groups.
There are more than a thousand apps self-described as business tools, and many of the others might be used in a business way.
Sure, it's a non-guided, messy process. But that's pretty much the way innovation is going to happen in any case.
It's just a process of discovery.
Lots of business-focused people are trying to figure out how to apply social networking in an enterprise context, so there is a clear sense that this is not all about "fun and games," even if that's where most of the apps are.
The unique contribution any communications network plays in a value chain is precisely the "pipe."
That doesn't mean "just" pipe, but connectivity is fundamentally important. Consider a Strategy Analytics forecast of global consumer and advertiser spend on mobile media and associated transport.
Strategy Analytics predicts mobile media spending will rise from just under $47 billion at the end of 2007 to almost $102 billion by 2012, driven by access to web services, video and music.
But note the contribution made by "data transport," which is the "dumb pipe" part of the business. Premium services are important, no doubt. But access is far from unimportant.
Over the same period the population of unique cellular users actively using mobile content services will more than double from 406 million to over 870 million.
One issue the studios are going to have to grapple with, as they go with "date and date" release of DVD and video-on-demand movie content, is channel conflict. Specifically, Wal-Mart sells about 40 percent of all DVDs. Target sells about 15 percent. Add in Best Buy and you probably have half the market for retail DVD sales.
Those three mass market retailers won't be happy if DVD sales, used as loss leaders to drive shopper traffic, start to dwindle. Surely studio executives are thinking about this problem. Ultimately, they'll want to come up with some sort of kiosk operation allowing buyers to sideload rental or sale content directly to their iPods.
You'd think USB flash drives might do the trick. The issue will be the cost of storage required to hold a two-hour HDTV movie. And then there's the issue of moving that content directly to the TV for viewing.
The studios will figure this out, or somebody will help them figure it out. The studios won't want to make a key channel partner too angry.
In the movie content market, all revenue streams beyond theatrical showings basically are substitutional: money made in the DVD segment tends to displace revenue that might have been earned in the pay TV or broadcast TV segments, for example.
With the recent movement towards "day and date" release of movie content to DVD channels as well as video on demand, one should logically expect some revenue to shift from the DVD channel to the VOD channel.
But there's a difference in the "quality" of the revenue, from a studio standpoint. Studios make 60 to 70 percent profit margins on downloaded or streamed content; only 20 to 30 percent on DVDs.
Aggregate consumer spending might not change all that much, but studios might make more money. That is the only reason they'd even agree to a different "day and date" scheme.
All you need to know about where money gets made in the movie business are the three letters "DVD."
Studios make 14 percent or less from theatrical showings and about half their revenue from DVD rentals and sales. Less than 10 percent is earned from all cable, satellite and telco payments, including content shown as premium channels such as HBO and video on demand.
DVD is where the money is, and studios aren't going to make any really significant changes they think will damage those revenues. So they must have concluded that "the times they are a changing."
After years of negotiating with the movie studios, Apple finally has gotten the major studios to allow rental of iTunes movies on the same day they release new DVDs. That's a big change, and suggests studios now have evidence that they will make no less money, and possibly more, if they do so.
Disney has had that arrangement with Apple since September 2006. Now Apple will be able to distribute movies from 20th Century Fox, Warner Bros. , Paramount Pictures, Universal Studios Home Entertainment, Sony Pictures Entertainment, Lionsgate, Image Entertainment and First Look Studios.
New movies can now be purchased for $15 or rented for $4. Older movies cost $10 to buy or $3 to rent.
For any number of practical reasons, such as the fact that hard drives always die, it is likely iTunes will get more revenue traction from rentals than from sales. Up to this point Apple movie sales have been pretty low, volume-wise.
Rentals are not only are cheaper, but are congruent. Most movies are not compelling enough to watch more than once, and owning makes most sense for movies one thinks one is going to watch several times or more.
So the issue everyone now will be watching is how revenue shares move around within the movie ecosystem. Studios wouldn't be taking this move unless they think they'll make more money from downloads and streaming than from selling discs.
Sure, downloads probably will negatively affect DVD rentals and sales. But the profit margins on downloads are much higher than for DVD sales or rentals. So if all downloads do is cannibalize DVD sales and rentals, the studios win.
AT&T hotspots have started providing iPhone users with free Wi-Fi access at Starbucks and other locations. AT&T Broadband customers also have free access. One wonders how long it will be before all AT&T Wireless customers will get access. AT&T has talked about that.
That's one advantage of customer and network scale. AT&T doesn't necessarily have to make much actual incremental revenue from the Wi-Fi service. What it does is make its wired and wireless service much more sticky.
And given its scale--100 million customers--AT&T is in position to create other "everybody is on network" services of various types, the same way Skype creates "free calling to all other Skype users."
The difference is that AT&T can mix and match services and features available on its in-region wired, national wireless and global network, including mobile and fixed broadband, mobile and fixed calling, messaging or other services with a "social" or "community" aspect.
Scale has many advantages.
T Mobile is lighting its 3G network in New York in voice-only mode, says Gizmodo. Don't ask me why. I cannot figure this out. Maybe the backhaul issues are serious enough that broadband really isn't available yet. If so, don't bother offering commercial service.
The voice network and EDGE data network already work. What conceivable value does a T-Mobile customer get from 3G speeds if all you can do is what you already are doing? Sure, it's just the first city of a national network.
But why not offer some new service that the network actually enables?
TotalWeb, the new company created by Nielsen Online, says mobile Web sites provide a significant increase in usage. Weather-based sites, for example, see an average 22 percent lift in usage, compared to sites that are designed for PC access alone.
So do entertainment sites, which get 22 percent more use when sites are rendered for mobile screens.
Game and music sites get 15 percent lift when authored for mobile use.
Nielsen says 87 million U.S. mobile users subscribe to mobile Internet services, and more than one in ten mobile subscribers (13.7 percent) actively uses mobile Internet each month.
Apple is going to sell lots more phones (no surprise there) if AT&T does subsidize the new 3G iPhones, says Bernstein Research analyst Toni Sacconaghi, reported by Eric Savitz, Barrons columnist.
If AT&T does provide a $200 subsidy for the3G iPhone, bringing the phone’s cost for consumers down to about $200, where current models are priced at $399 and $499, sales might double, based on past precedent.
Sacconaghi notes that that sales of the Motorola RAZR doubled when its price dropped from $500 to $150 and doubled again when the price went to $100.
If AT&T average revenue per subscriber from the iPhone is in the mid-$90 a month range, compared to less than $60 for the average post-paid user, then AT&T has an additional $720 in revenue over the course of a two-year plan to offset the subsidy.
AT&T is launching its own mobile TV service, which should provide more pointers for Dish Network, also expected to launch its own service in the future.
AT&T's service requires specific device models costing between $200-$300, a TV-only data plan costing $15 a month (or $30 if a user also wantsWeb browsing). One device not supported is the Apple iPhone, which for many is reason enough not to bother.
Qualcomm, which provides the technology to support the Verizon service, says only that so far the service has been a disappointment. Silicon Alley writer
perhaps 1.5 percent, or 820,000 Verizon subscribers, have ever watched TV on their phones.
In Europe, where several operators offer mobile TV, fewer than one percent subscribe.
Analysts at the Yankee Group say five percent of mobile subscribers are actually willing to pay for mobile TV, if the monthly price is $5.
About 18 percent of Comcast customers actually buy the triple play. And there seems to be some resistance to the notion, despite its fundamental importance for both cable and telephone companies these days.
Qwest executives, for example, have discovered they are leaving money on the table by not selling single play and dual play services more aggressively.
Comcast says it is going to do the same. The triple or quadruple play might be the fundamental packaging strategy.
That doesn't mean every customer is going to buy such a package. And there are lots of reasons why that could be the case. Lack of interest, lack of money, lack of one specific feature, inability to use subscriber identity modules, lack of availability of a specific handset or programming network, contract terms, sticker shock and lack of awareness all can be barriers to triple or quad play adoption.
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