Showing posts from February, 2009

Social Network Humor

An amusing bit of social networking humor. Click on "related article" at bottom of this post.

It isn't quite the classic that "if operating systems were airlines" ( is, but is chuckle-inducing, nevertheless.

Shorter Sales Cycles for Communication Services?

Life always is so much more interesting than one suspects. Consider the conventional wisdom that enterprise buyers are spending more time than they used to making communications decisions.

Arunas Chesonis, PAETEC CEO, says sales cycles now are shorter than they were three to six months ago. "People are being forced to make decisions much faster," he says. A client was looking at buying an MPLS network. The chief information officer said he was going to make a decision in about 10 days. 
"Typically, you'd see something like that goes 60 days before they make a call," says Chesonis. "I can't quantify exactly for you how fast people are making decisions, but the economic pressures are absolutely affecting sales cycles on operating type services, something that would affect operating expense.
"If you're talking CapEx, a lot of these people are just deferring the decision till later this year, early next year, they're trying to conserve cash just …

Nokia Mulls Making PCs

Nokia CEO Olli-Pekka Kallasvuo has hinted that the Finnish handset giant could soon enter the laptop market, reports Reuters.

IKallasvuo says the firm is "looking very actively" at the opportunity. His comments appear to confirm long-running speculation that the world's largest handset vendor will diversify into laptops. "We don't have to look even for five years from now to see that what we know as a cellphone and what we know as a PC are in many ways converging," Kallasvuo said.

The vendor is rumoured to be developing computers based on ARM's new 'Sparrow' processor for netbooks and Mobile Internet Devices (MIDs) and is reportedly looking at a 2011 launch.

Ethernet Installs: Mostly Follow-Ons?

IU.S. demand for business Ethernet service ports expanded at a rate of 43% during 2008, Vertical Systems says.

Spurred by lower bandwidth costs and higher service availability, enterprises of all sizes purchased carrier-based Ethernet to support their business networking applications, according to Vertical Systems.

"Despite a near paralysis of new telecom spending at the end of the year, there were tens of thousands of new Business Ethernet service installs during 2008," said Rick Malone, principal at Vertical Systems Group. "Deployments were most active in the third quarter before many enterprises implemented spending freezes or staff reductions. Customer installations in the fourth quarter consisted primarily of follow-through on in-process network conversions."

Based on retail customer port installations, AT&T maintained its U.S. market leadership in 2008, although considerable momentum by Verizon narrowed the gap. Attaining a position on Vertical Systems Gr…

Will Rural Broadband Create Jobs?

The general notion about broadband spending mandated as part of the national economic “stimulus” plan is that it will create jobs. To be sure, construction of the access networks will drive some direct employment.

Some 128,000 jobs (or 32,000 jobs per year) could be generated from network construction over a four year period, and each job would cost $50,000, according to Dr. Raul Katz, adjunct professor at the Columbia Business School.

Beyond that, such new broadband facilities are supposed to spur economic development as well. But will it?

Unfortunately, says Katz, research on the productivity impact of broadband indicates the potential for capital-labor substitution and consequently, the likelihood of job destruction resulting from broadband deployment, as well as some incremental job creation. So the issue is whether net job creation exceeds net job destruction, and by how much.

You might think bringing broadband access to any community can only be a plus. As it turns, out broadband cr…

Firms Losing 40% of Time Because of Communications Inefficiency?

On average, 70 percent of of small and medium business execitives recently surveyed say they spend 17.5 hours each week addressing the pain points caused by communications barriers and latencies, according to a global study sponsored by Siemens Enterprise Communications and conducted by SIS International Research.

If Siemens results are typical, mid-sized organization personnel might be wasting as much as 40 percent of their available time dealing with communication latencies of one sort or another. Most small businesses probably will not agree, but communications inefficiency obviously scales with organization size.

Tracking Service Provider Capex

People who track telecom service provider capex are going to have to account for some likely shifts in the composition of that capital investment. For telcos providing IPTV, a significant percentage of ongoing capex is related to providing customers with relatively-costly in-home decoders. Comcast, which has built its business on the use of such terminals, is about as efficient as any provider can be, and gets the absolute best volume pricing on its gear. Yet it still devotes at least 18 percent of overall capex to the purchase of such boxes.

Telcos, who likely are not yet getting volume discounts as large as Comcast's may find as much as a fifth of their overall capex now devoted to customer premises equipment. That is going to shift thinking in the direction of variable CPE investment rather than the network transmission categories that traditionally have dominated spending. 
The other change is that IP-based gear in most cases costs less than legacy equivalents, so any given doll…

Where's the Competence?

Financial markets hate uncertainty. Right now, all we've got is massive uncertainty. Where's the governmental competence?

U.S. Tops Global List of Broadband Countries

If one measures the value of broadband not by simply "organizations that can buy broadband" (availability) or "homes buying broadband," (demand), but rather as a the ability a nation has to harness broadband to drive economic growth, the United States ranks first in the world, says Leonard Waverman, Fellow of the London Business School and Dean and Professor at the Haskayne School of Business at the University of Calgary. 

The United States has seen more clear-cut productivity gains than has Europe, and a major source of this U.S. productivity advantage is broadband usage by businesses that are not themselves producers and providers of broadband services, Waverman says. 
The concept of “useful connectivity” is based on the notion that the economic value generated by connectivity depends not just on conventional measures such as broadband lines or computers connected, but also on who is using those lines—businesses or consumers—and how well they are able to use the line…

Apple, Acer, Asus, Schumpeter

"Schumpeterian" times of "creative destruction" seem to be upon us. Note a recent ChangeWave poll on PC purchasing. You wouldn't be surprised to learn that Apple ranks number one in customer satisfaction. 
You might be shocked to learn that Asus and Acer rank second and third, above Sony. As satisfaction rankings are about value and price, something is going on here. 

Apple doesn't win because of its price. Asus and Acer play there, but I think something more profound is going on. 
Both firms have created a new value position in the market with their hot-selling netbooks. Prior to that, both firms had staked out positions in the value-priced notebook segment as well. But it is probably the netbook that will have the greatest implications for Asus and Acer over the next couple of years as each attempts to establish a retail brand. 
It isn't simply that their netbooks sell at retail for a bit less than $300. It also is that the value of a netbook might be hig…

Content, Distribution, Attention: What is King?

Many years ago, as a graduate student in managment, Herbert Simon was taught to us as a theorist with a lot to say about the way human beings in organizations behave. These days, he returns anew as a theorist whose work informs us about the logic of digital media. 

"What information consumes is rather obvious: it consumes the attention of its recipients," Simon once said. "Hence a wealth of information creates a poverty of attention, and a need to allocate that attention efficiently among the overabundance of information sources that might consume it."
In a world where so much content exists, the key problem now is "getting noticed." That tends to mean "distribution" is less important than in the past. Think of a past world with limited outlets for radio, TV or print content, so unlike our present world where there is almost no physical distribution barrier, while the true barriers essentially amount to affirmation by audiences. To use the overwor…

Use Enterprise Sales to Drive Consumer Web Apps?

It might sound counter-intuitive, but at some observers think Web-based software products not only can span enterprise and consumer user segments, but can leverage enterprise deployments to spur consumer penetration.  Some even think Web apps specifically seen as consumer tools can be sold directly to enterprises with little or no modification. 
That is roughly the reverse of what has tended to happen in recent years as the normal technology transmission belt has been inverted.  But the process would be something of a return to past adoption patterns, in roughly the same way that "software as a service" and cloud computing now "returns" us to an earlier era with some resemblance to a mainframe or centralized model of computing.
In the past, software and hardware innovations tended to be "discovered" in the universities then commercialized first in the enterprise buyer segment. Over time the price and feature set would be "de-tuned" for the mid-mar…

Volume Discounts Wrong for Social Software?

Volume-discount pricing structures are the norm in the computer and most other businesses. 
But Julien le Nestour, an adviser, investor, and manager at Schlumberger, argues that for some "products" such as social networking, value grows as users grow ("network effects"), making the value of an application with 70-percent use much more valuable than an application with 10-percent usage.
But under typical volume-pricing practices, buyers pay more for the less-efficient than for the highly-efficient "product." So pricing should invert. Discounts should be offered for low-penetration use, and rising prices for high-penetration use. 
If customers extract more value (higher returns) per user as the number of users increases, yet pay an ever-decreasing price per user (which is VD pricing), value and price have diverged.

41% of U.S. Internet Users are "Social"

Researchers at eMarketer estimate that in 2008 nearly 80 million people, 41 percent of the U.S. Internet user population, visited social network sites at least once a month, an 11 percent increase from 2007.

By 2013, an estimated 52 percent of Internet users will be regular social network visitors, according to eMarketer.

80% of Broadband Users Prefer Traditional Video Viewing

Parks Associates research finds 80 percent of broadband users in key European markets prefer traditional video viewing to online viewing. Depending on how you want to spin it, that is a glass half empty or half full. 
“Broadband has transformed video viewing habits in Western Europe, where over 20 percent of broadband households have watched a film or TV program online in the past six months,” say researchers at Parks Associates. 
European consumers are adopting online viewing habits with some reluctance, however, Parks Associates says. For all the countries surveyed, the U.K., Germany, Spain, Italy, and France, over 80 percent of broadband households prefer a more traditional option for viewing video, including going to the cinema or watching a DVD. 
Many consumers are watching video online only because of the availability of free content, both legitimate and illegitimate, the researchers note. 

Broadband to the Farm?

About 57 percent of U.S. farms had Internet access in 2007, up about seven percentage points since 2002, and 58 percent of U.S. farms using the Internet in 2007 bought high-speed Internet access, according to the U.S. Department of Agriculture. 
In 2002, the Census found that half the farms in the country were connected to the Internet in some way, using either broadband or dial-up services. 
So 33 percent of farms in 2007 purchased broadband connections.  Penetration likely is higher now, though most observers think rural broadband, to say nothing of use by rural farmers, remains lower than usage by urban or suburban customers. 
Researchers at the Pew Internet & American Life Project say 55 percent of homes now buy broadband access, up eight percentage points since 2007. If rural use grew at a comparable pace, farm use of broadband could now stand at 41 percent. 
The other angle is that farmers in the West have the better access than the rest of the nation to high-speed Internet, the…

Smart Pipes, Smart Move

BBC, mBlox and Vodafone Group, working with the Mobile Entertainment Forum, have launched "Smart Pipe Enabler Services," a way mobile operators can offer third-party content and app providers a variety of services including age verification, location, identity authentication, reliable phone applications, specific tariffs to consumers and delivery with specific quality of service.

Enabled by these services, content providers can offer the consumer a better user experience, a key objective for much of MEF’s work.

The move is a major step towards creating an entirely new revenue source: business partner revenue streams, while improving end user experience and moving beyond any notion of access networks as "dumb pipe."

At the moment, of the $32 billion worth of revenues in the mobile entertainment industry, about half is based off-portal. The new "smart pipe" approach is aimed at offering those providers the option of features now available primarily to operator…

ITU Issues Views on Recession Impact on Telecom

At a high level, nobody is completely sure consumer behavior in this recession will match behavior in past recessions, for any number of painfully obvious reasons. There also is some thinking that as broadband had not attained mass adoption status during the last recession, this will be the first test of demand elasticity for fixed broadband.

And nobody seems to believe that wireline voice will in any way be helped. There is probably less consensus on what will happen in the wireless business, but wireless service providers likely are among the best-placed industry segments during the recession, in part because of greater "flexibility in their cost structure and capex and fixed-mobile substitution," a new report by the International Telecommunications Union says.

And though broadband access demand is believed to be relatively inelastic, that almost certainly will not be the case for fixed voice.

"Telecom services are likely to come under further price pressure, as operato…

$200 Million More in Videoconferencing Service Revenue This Year?

An Association of Corporate Travel Executives survey shows that 71 percent of its member companies plan to spend less on travel this year than in 2008.

According to the trade group, that’s a huge and unprecedented shift in corporate travel mangers’ plans from just five months ago.

ACTE’s new survey shows most companies are seeking to spend 10 percent to 20 percent less on travel than they reported in September of 2008.

Using the most conservative figures for estimating the dollar impact of such cuts, ACTE suggests that the 176 member companies responding to the survey will spend about $880 million less on travel this year than they had planned. If the same estimate is applied to the ACTE’s full membership of 2,400 companies, the impact would be more than $2 billion.

That should lead to opportunities for Web and other conferencing services and applications to get more traction, undoubtedly including many users and companies that have not historically relied on conferencing services, especi…

Enterprise IP Telephony Slows, In-Stat Says

The struggling economy will slow the growth of enterprise IP telephony adoption, In-Stat researchers suggest. Some 32 percent of enterprise-size businesses say the economic situation has slowed their VoIP deployment plans.
Broadband IP telephony remains the most common carrier-based business VoIP solution with revenues exceeding $1.1 billion in 2008, compared to $857 million for hosted IP Centrex service within the United States, In-Stat says. 
Adoption varies significantly by size of business, with enterprise-sized businesses preferring a partial deployment, while small office and home office users are more likely to go IP-only.
About 13 percent of U.S. businesses use both carrier-based and premises-based IP solutions. 
Slightly more than one in three US businesses that have deployed VoIP use it exclusively, In-Stat says.  Many more businesses use VoIP as a partial voice solution. U.S. businesses are also beginning to embrace voice-enabled IM capabilities, particularly among younger work…

Mobile Backhaul = 30% of Opex

Mobile backhaul now represents more than 30 percent of mobile service provider operating costs, says Juniper Networks. If one looks at opex and adds depreciation, backhaul can represent 70 percent of on-going costs.
Up to this point, most of the mobile backhaul has been provided by T-1 lines or DS-3 connections, in some cases.
But deployment of 2.5G and 3G technology has lead to an increased backhaul requirement, to say nothing of coming 4G requirements. So where base stations that previously required one or two T1/E1’s for backhaul now need four to six T1/E1’s. The result has been a 200 percent to 400 percent increase in required backhaul capacity and its associated increase in operating expense costs.

Mobile Backhaul Services $15 Billion in 2011

Telcordia analysts predict there will be a $15 billion wholesale transport revenue opportunity in the mobile tower backhaul market by 2011, based on new needs to get broadband backhaul to more than 200,000 wireless network cell sites in the United States.

Satellite Pioneer Andy Werth Dies

Andrew (Andy) Werth, a satellite industry pioneer, died January 28.  He was 74 and lived in Washington, D.C. 
He co-founded a digital satellite communications company that eventually became Hughes Network Systems. Mr. Werth later became president of the company’s international division.
Andy was an avid cyclist, finishing one place short of qualifying for the U.S. cycling team in the 1952 Olympics, though he won numerous other events in his youth, including the New York State Junior Championship and the Tour of Somerville. A victory in a nine-day cycling event in Canada earned him enough prize money to pay for his first semester of college. He resumed cycling later in life, and won the Masters National Track Championship in 2000, 2003 and 2004. Until slowed by illness, he was an active member of DC Velo, a Washington-based cycling club.
Beyond that, what many of us always will remember is his mentoring and teaching, born, no doubt, of his genial and caring nature. Thanks, Andy. 
Mr. Werth…

Software-Based Telecom (Video in 5 Parts)

Voice has for decades been a "service" sold by the "the line" or as an "application" created by a premises switch. Now voice also is a feature of instant messaging, Web sites, enterprise applications and email. As a result, there now are multiple business models, revenue streams and applications that use the "voice" feature. This panel will examine some of the ways this is happening, and what it means for traditional providers of voice services.
Gary Kim, Editor-in-Chief, IP Business Rodrigue Ullens, Co-founder & CEO, Voxbone Trevor Baca, VP, Software Engineering, jaduka Michael Veys, COO, JAJAH Eric Reiher, Founder & CTO, Mobivox
Click on "Related Article" at the bottom of this post for the first of five parts. Click "Watch in HD" if you have the bandwidth.

Voice Peering Drivers and Strategies: 7-Part Video

Gary Kim, Editor-in-Chief, IP Business
Carlos Da Silva, Americas Marketing Director, France Telecom
Paul A. Woelk, Sr Manager, Access Strategy, Sprint
Heather Olson, Regional Manager, Telecom Italia Sparkle
Rodrigue Ullens, Co-founder & CEO, Voxbone

click "Related Article" at the bottom of this post to launch the first video segment. Also, if you have the bandwidth, select "Watch in HD." It's better.

Mobile Broadband Supplemental, But High Risk of Substitution

A huge explosion in mobile broadband use in Europe over the next five years largely will be driven by consumers, and largely will complement, not supplant, wired broadband connections, predict researchers at Analysys Mason.

That said, a separate forecast by Informa Telecoms & Media suggests the potential for broadband substitution will remain high.

Analysys Mason projects148 million mobile broadband connections in Europe by 2014, when they will account for almost half of all broadband connections in the region.

The potential for fixed-line voice substitution also will remain high. About 40 percent of total mobile traffic was generated in the home environment in 2007, says Informa Telecoms & Media.

By 2013 it is expected to reach 58 percent, with about eight percent of total mobile traffic offloaded to fixed broadband. In 2008, the home environment likewise represented more than 43 percent of total mobile data traffic and will climb to 60 percent by 2013.

That's the danger for …

T-Mobile Outage: "All Markets West of Mississippi River"

T-Mobile has a  BlackBerry email services outage in "all markets west of the Mississippi River," I am told by tech support. Sunday, Feb. 15, about noonish Mountain time.....
Apparently there also was a Feb. 3, 2009 outage on a more-localized basis on the AT&T network in  Houston, New York, New Jersey and Baltimore/Washington D.C. areas.
There are some reports T-Mobile and possibly some Sprint BlackBerry users had the same issue on Feb. 3, 2009 as well. Undoubtedly there will be finger-pointing, but it would seem to be a RIM issue if multiple networks had outages at the same time.

58% of Mobile Use In-Home by 2013

About 40 percent of total mobile traffic generated in the home environment  in 2007, says Informa Telecoms & Media. By 2013 it is expected to reach 58 percent, with about eight percent of total mobile traffic offloaded to fixed broadband.
In 2008, the home environment likewise represented more than 43 percent of total mobile data traffic and will climb to 60 percent by 2013.
Mobile voice minutes of use in the home environment represented about 42 percent of total mobile voice traffic by the end of 2008. Mobile voice usage at home will gradually increase to reach 49 percent by 2013.
Mobile use at work will represent 30 percent of usage, with nine percent of calls initiated while users are moving. About 21 percent of calls will be generated from other public environments.
"In the same way that voice traffic has moved from old fixed line telephony service PSTN to mobile, there is reason to believe that a significant percentage of Internet traffic generation will move away from fixed…

Wireless and Broadband Grow, Wireline Shrinks, Ofcom Says

Fixed-line call volume and access revenues fell by two percent during the third quarter, the U.K. Office of Communications now reports. Total residential call volumes in the third quarter of 2008 were nine percent lower than in the third quarter 2007, while total business call volumes fell by five percent over the same period. The total number of fixed lines fell by 36,000 to 33.5 million during the quarter as well. The number of residential and small or medium business broadband connections increased by 322,000 during the quarter to 16.9 million. Total mobile revenue for the four largest mobile operators increased by 1.5 percent, quarter over quarter, Ofcom reports. Revenue from calls and other charges grew by 2.3 percent, though call volume declined by 0.05 percent, quarter over quarter.Roaming call volumes increased by 11 percent year over year. The number of outgoing international minutes grew by 14 percent over the same period.

Core Switches on Blade Servers: Nokia Siemens

Core network infrastructure is moving along a path that will have software functions running on standardized hardware, such as blade servers. That's quite a change from a world where you could tell the difference between major brands of Class 5 switches just by looking at them.

So note that Nokia Siemens Networks now has a new strategy focusing on hardware-independent solutions for core networks. Nokia Siemens Networks has introduced a new, open hardware architecture, where Nokia Siemens software runs on off-the-shelf hardware blades.

The long-term goal for the strategy is to provide an open, multi-application, hardware-independent platform, where the same open hardware platform can be used for a variety of different network elements.

The switch means the MSC Server mobile softswitch, which is currently implemented on the Nokia Siemens Networks DX 200 hardware platform, will run on open and standard blade servers.

“This is the beginning of a major shift in the way we design our core n…

Tweet, Tweet and More Tweet

As of December 2008, 11 percent of online American adults said they used a service like Twitter or another service that allowed them to share updates about themselves or to see the updates of others, say researchers at the Pew Internet & American Life Project.

Just a few weeks earlier, in November 2008, nine percent of Internet users used Twitter or updated their status online and in May of 2008, six percent of Internet users responded yes to a slightly different question, where users were asked if they used “Twitter or another ‘microblogging’ service to share updates about themselves or to see updates about others.”

Good thing the company just raised $35 million more in investment capital. It still is growing really fast.

Small Business Demand Remains Stable

Small businesses (zero to 500 employees) represent 99.7 percent of all firms, employ about half of all private sector employees, pay nearly 45 percent of total U.S. private payrolls and have generated 60 to 80 percent of net new jobs annually over the last decade, according to the U.S. Department of Commerce.

It's no surprise that smaller businesses therefore represent much of the underlying demand for communications and information technology purchases as well.
It's a darn-near sure thing that such businesses will represent the only new net private sector jobs for the balance of the year. So it is noteworthy that small businesses were able to add new employees in January 2009, according to actual payroll processed by Surepayroll, which handles payroll data for more than 20,000 small businesses.
There was a 0.3 percent increase in the average small business size between the December 2008 and January 2009 periods, meaning that the average small business grew in size in January.


Charter to Declare Chapter 11 Bankruptcy

Charter Communications will file for Chapter 11 bankruptcy as part of a financial restructuring on or before April 1. Charter says it has reached an agreement with a committee of some debt holders to reduce its obligations by about $8 billion. 
The company had net debt of slightly more than $21 billion as of Sept. 30, 2008, so despite wiping out what remains of the equity value, and paring debt by $8 billion, Charter will still have to contend with as much as $13 billion of remaining debt. 
Controlled by Microsoft Corp. co-founder Paul Allen and based in St. Louis, Charter has about 5.6 million customers in 28 states.
The cable company has sold the most U.S. high-yield bonds of any company in the past decade, according to data compiled by Bloomberg. Allen bought Charter in 1998, amassed the company’s debt burden while building it into the fourth-largest U.S. cable provider. 
Charter has reported losses every year since going public in 1999. In some ways, Charter is less a victim of the cu…

Carriers Move to More "Open" App Environments

The parlay initiative (, which aims to create APIs enabling telecom service providers to work with developers and industry technology suppliers, seems to be bearing fruit. 
TDC A/S, the Danish service provider, is using open application programming interfaces and making those APIs available to third-party application developers.
TDC is using the service delivery platform marketed by Aepona Ltd., which has experience with this sort with Canadian carrier Telus Corp. TDC expects to be up and running by late summer of 2009.
Aepona also provides similar capabilities for France Telecom, KPN Telecom, Sprint Nextel Corp. and TeliaSonera.
The GSM Association is working with Aepona on a new initiative called Open Network Enablers API (OneAPI), as well.
Vodafone Group, Telenor, Telecom Italia and France Telecom's Orange France are part of the OneAPI initiative.

Iridium Losts Satellite, Globalstar Also Has Issues

It had to happen some time, and now it has. Two satellites, an operating Iridium communications satellite, and a defunct Russian satellite, collided in orbit on Feb. 10, 2009, destroying both objects and creating 500 to 600 new pieces of orbital debris, adding to about 18,000 other orbiting pieces of "space junk" softball-sized or larger that routinely are tracked. 

Iridium, which owns a fleet of 66 low-earth orbit satellites, expects minor outages, and will move an in-orbit spare into position within 30 days. 
Iridium isn't the only satellite communications provider facing at least some issues. Frost & Sullivan compared performance of more than 1,000 calls on Iridium and Globalstar networks, from Northern California and Central Texas.
In initial testing, analysts found that more than 99 percent of calls placed through the Iridium handset were successfully connected, compared to 51.3 percent of calls from the Globalstar handset. 
Tests also indicate that 98.1 percent of ca…

Telecom in Uncertain Times, Multi-Part Video

Click the "related article " link below to get the video, in 7 parts on YouTube.

Today's telecom and cable companies face an increasingly complex and uncertain world in which continual and rapid change is the norm. But different providers face distinctly unique challenges. This panel will evaluate the ways contestants operating in different geographies and customer segments; with distinct business models and products; diverse regulatory and technology environments, evaluate where they are, and where they want to go.

We'll take a look at:

Which challenges contestants believe are most crucial
Which opportunities are most relevant
Which customer behaviors and desires offer the greatest upside
How contestants respond to the competitive environment
Where unique value can be created in their chosen markets
How core competencies can be leveraged to create more growth

Recorded at Voice Peering Forum (c) 2008 Stealth Communications

Huge Shift in Telecom Industry Supply Chains

Continuous Computing, a suppler of protocol-centric hardware, software and systems to telecom industry original equipment manufacturers, is introducing a solutions and services practice in response to demand for more prepackaged platforms from global customers. The new practice will deliver customized, fully-integrated, application-level solutions to network equipment providers, especially in the wireless space, and including deep packet inspection capabilities. The move reflects a change in global telecom operations and technology development, which require faster development at lower cost, at a time when virtually all service providers and equipment suppliers have fewer in-house resources to do so, says Brian Wood, Continuous Computing VP. The new capabilities will accelerate the creation and delivery of carrier-class systems to service providers much faster, in many cases as much as 12 to 24 months faster, says Wood.The demand for more prepackaged platforms also is part of a broade…

Broadband Mapping: Studying Non-Problems

About $350 million of the version of the broadband stimulus package passed by the Senate will go toward mapping broadband coverage. Some will argue that it doesn't matter what "stimulus" spending goes toward, as long as the money goes to work immediately, is targeted and terminates once the recession is over, and there is sound logic there.

The issue, though, is whether there is a terrible problem requiring that we "study" this matter some more. If one looks at where the United States ranks in telephone penetration, for example, the United States ranks about 16th, as measured by the Organization for Economic Development and Cooperation.

One can quarrel with the methodology OCED uses, but for the moment consider simply the well-developed state of landline voice service. Does anybody really think the United States has a problem with wired voice penetration?

And if not, why is a "15th in the world" ranking for broadband access a problem?

A "back-of-the-…

Telco broadband Now Shifts to Video

The telco broadband market experienced a significant downturn in new subscriber additions during 2008, according to iSuppli Corp. Of course, the reason is that the market is mature: most users who want broadband already buy it. As a result, the next several years will be about enticing customers to migrate to higher-speed tiers and enhanced services, principally IPTV.

In part, this will lead to a shift in lead product offering and a slower growth rate than broadband access had achieved. Some major telcos are pushing IPTV services more than Internet access, a product category in which there are entrenched incumbents. In the broadband access market, there were no incumbents to dislodge, so growth was not a zero-sum game. In the IPTV market, growth will come in the form of market share shifts, a tougher proposition. 
“New telco broadband subscriber growth saw a 9.1 percent decline in 2008 following double-digit gains during the prior five years,” says Steve Rago, iSuppli principal analyst.…

Every Company is a Media Company

Smart businesses are beginning to produce content that’s less about their product and more about topics that their customers gravitate to, writes Rick Burnes, an inbound marketing manager at HubSpot.

Whole Foods publishes recipes and cooking videos. These companies are producing quality media, just like The New York Times or Discovery Channel.

Why? Every company, no matter what industry, is essentially gathering and distributing information, both to employees and external audiences, and trying to attract attention from prospective customers. 

Traditionally, this has been an "outbound" function using intermediaries such as media, trade shows, email blasts and direct sales, where companies reach out to potential customers.
These days, one sees use of webinars, blogs, Web site content, news feeds, videos and other efforts that invite potential customers to show up.  So every company now produces and distributes content.

Market Doesn't Like Bank Bailout, Apparently

Judging by the plunge on the markets as Treasury Secretary Geithner spoke...

Verizon FiOS Challenges DirecTV as HDTV Leader

DirecTV continues to offer the most high-definition channels of any pay TV provider, but Verizon is catching up quickly with its FiOS TV service, according to Pike & Fischer. The firm finds that as of January 2009, DirecTV was offering as many as 104 channels in high-definition format. But that only beats Verizon's HD menu by one channel.

Comcast, the largest cable operator in the United States, has one of the smallest selections of high-definition channels, Pike & Fischer says. Comcast in some markets is offering less than 40 HDTV channels, although the company's marketing focuses on its large selection of HD movies, TV shows and other content available on demand.

Most providers examined in the study charge a premium price for HDTV service, usually less than $10 per month. But some, including Cablevision and Time Warner Cable, offer a substantial number of HD channels for free.

Qwest: Enterprise and Wholesale Drive the Business

Some will look at Qwest Communications International Inc. fourth quarter and full-year results and see trouble; others will see improvement. Irrespective of those judgments, it should be noted that for Qwest, business markets and wholesale are the majority of the business. 
Mass markets, which includes both consumer and small business revenue, represented about $1.4 billion worth of fourth-quarter revenue (and some portion of that is small business). 
Wholesale markets contributed $789 million. Business markets represented $1.1 billion.  In other words, Qwest one of these days relatively soon will be earning more money from wholesale and business customers than from consumers, as important as consumer markets may remain.  
Furthermore, revenue in business markets grew year over year, while mass market and wholesale revenue declined, with those declines attributable to voice services. 
In the fourth quarter of 2008, net income was $185 million, or 11 cents per diluted share, compared to $3…

Brighter Prospects for SaaS?

Historically, the transmission belt for new applications and communications technology has been that university researchers would come up with something new, suppliers would sell those innovation into the enterprise market, and then at some point the tools move into the mid-market, then finally into the smaller business entities, finally winding up as consumer tools in the final stage.
These days, there are different avenues. In many cases, innovations come out of universities, then go straight to the consumer market and then fairly quickly into the small business market, with enterprises and mid-market customers becoming aware of the trends only as individual "lead users" start to make use of the tools in their work roles. 
Of late, in fact, it is hard to point to any significant innovations that went enterprise first, with the exception of mobile email, which was driven by enterprise users. Everything else pretty much developed first in a consumer context, including instant …

Are Telcos Toast?

There is a sentiment in some quarters that the telecommunications industry is too inflexible, slow moving and unimaginative to transform itself. Those criticisms are well taken. They could be right. But look at matters a different way. If executives know what business they really are in, they won't make the proverbial mistake the railroad industry made: thinking it was in the "railroad" business instead of the "transportation" business. 
In fact, a quick review of technology underpinnings of the communication industry should tell the story. AT&T once meant "American Telephone & Telegraph."
The telegraph, and the business it created was an 1840s invention. The telephone was a 1870s invention. AT&T made the transition. Wireless was invented in the 1890s. And though they were slow to enter the business, large "landline" providers now lead the wireless business. 
Radio broadcasting was invented in the 1920s, television in the 1950s. Tel…

Is Content Really King?

There continues to be talk in the communications business about network infrastructure providers as "dumb pipes." That's a bit of an analogy to the "content is king" discussions that the video business periodically revisits. Put simply, there is a tension, in either communications or media businesses, between the value added by network services and applications, and the debate never seems definitively solved.

Consider the case of Time Warner, which is in both the "content creation" and "network delivery" businesses. Some financial analysts say the content assets are overvalued, compared to the cable assets.  Time Warner Cable trades at a discount to Comcast on price-to-earnings multiple, some note. 
To be sure, some analysts worry about increasingly effective competition from Verizon and AT&T. But Time Warner Cable still is adding net subscribers in a recessionary environment. Of course, these debates tend to run in cycles. 
Distribution wa…

Will Recession Lead to Permanent Behavior Changes?

Nobody yet knows when the current recession will end, or what will happen to various industry segments during the recession. What is even less known is how consumer and business behavior during the recession might carry on in the form of new trends once the recession is but a memory.

Recessions can cause people to think more about the effective use of their assets. In bad times, users are forced to see if there are substitute ways of doing things that save money right now. But if the substitutes are good enough, people might not go back to their former preferred ways of doing things.

At a practical level, business buyers in many cases are taking longer to make decisions, so the time lag from proposal to acceptance is stretching out.

But there still is little, if any, concrete evidence that business or consumer users are abandoning key services ranging from broadband access to wireless to multi-channel video. In fact, the evidence so far indicates they are behaving as they have in the pas…

Broadband Stimulus: Small Details, Big Difference

The revised Senate version of the "stimulus" bill has not yet been passed. Nor has it been reconciled with the House version. But there could be big differences. The revised Senate version funnels money through the National Telecommunications & Information Administration. The House version splits disbursements between NTIA and the Agriculture Department.

The difference? For a company such as Qwest Communications, the Agriculture Department funds would not be available, because of Agriculture Dept. rural loan program rules. The NTIA program does not operate under those rules, making Qwest eligible to apply.

Essentially, Agriculture Dept. rules ascertain eligibility on a statewide basis, while NTIA would fund on a community basis. As Qwest serves both urban and rural communities in each of its states, it has been ineligible for rural broadband loans that it might otherwise qualify for.

So the reconciliation process will be crucial.

About $6.5 Billion in Broadband Spending Still in S.1

The 778-page Senate version of the "stimulus" bill apparently calls for about $6.5 billion in tax credits for supplying broadband to rural or "under-served" areas. It is not yet clear what will happen when the Senate version of the bill is reconciled with the House version.

The House version includes more specific references to broadband speeds, while the Senate version deletes those references.

Earlier versions of the Senate bill had talked about providing tax credits for building new capacity in rural and underserved areas would be as much as 40 percent, but only for service operating at 100 Mbps or faster.

A 30-percent credit would be offered for service operating at 5 Mbps or better. The bill also seems to allow 40-percent credits for wireless service operating at 6 Mbps or better downstream and 30 percent tax credits for wireless service of 3 megabits per second or better.

It does not appear that those clauses remain relevant in the new revised Senate "sti…

Sprint Nextel Operations Outsourcing Imminent?

Sprint Nextel Corp. soon will announce it is outsourcing part of its network operations to Ericsson, removing about 2,000 to 7,000 employees from Sprint's payroll, reports the Kansas City Business Journal.

That move, which would indicate Sprint Nextel no longer considers some parts of its network operations to be so important they must be staffed in-house, could affect about a third of Sprint’s network employees.

Sprint spokeswoman Lisa Zimmerman-Mott denied the report, though.

Sprint has said it would cut 8,000 jobs by the end of March. Those cuts include the head of Sprint’s network, Kathy Walker. In addition, former Ericsson executive Sven-Christer Nilsson joined Sprint’s board in November, the Kansas City Business Journal reports.

Cusick estimated that outsourcing network operations would save about 25 percent of expenses in that area.

Congressional Budget Office Says "Stimulus" Plans Will Reduce Output in the Long Run

The Congressional Budget Office now estimates that by 2019 the Senate "stimulus" legislation would reduce U.S. gross domestic product  by 0.1 percent to 0.3 percent. H.R. 1, as passed by the House, would have similar long-run effects, the CBO says.

"Most of the budgetary effects of the Senate legislation occur over the next few years," CBO says.  Even if the fiscal stimulus persisted, however, the short-run effects on output that operate by increasing demand for goods and services would eventually fade away."

"In contrast to its positive near-term macroeconomic effects, the Senate legislation would reduce output slightly in the long run, CBO estimates, as would other similar proposals."

"In principle, the legislation’s long-run impact on output also would depend on whether it permanently changed incentives to work or save. However, according to CBO’s estimates, the legislation would not have any significant permanent effects on those incentives.&qu…

$6 to $9 Billion for Rural Broadband Soon? Maybe Not.

Don't get your hopes up that the $6 billion to $9 billion in potential "economic stimulus" spending to support broadband in rural areas will have any near-term measurable impact, either as a way of getting the country out of its current recession, or getting more broadband to rural users. 

Analysis from the Congressional Budget Office now indicates it will take seven years to get that money spent, and, at best, about 60 percent of the money might be spent in the years leading to 2011. In other words, by the time most of the money actually gets spent, the recession is likely to be over. 
The CBO projected that much of the $6 billion in broadband grants geared to underserved and unserved areas will be spent between 2012 and 2016.
Praiseworthy though the effort to extend rural broadband is, the current proposal does not seem to support the goal of "stimulus," which is to put money to work right now. For starters, any grantees would have to put up 20 percent of any pr…

New Era of Discrete Apps?

Many changes are possible as we move into an era of Web-based applications, built and accessed as Web services. On the demand side, users will be accustomed to a new way of buying and using software. On the supply side, we will see different business models. 
Especially for communications-enabled business processes, we likely will see more reliance on something we might call "discrete applications," rather than the more-monolithic approach we have seen historically, where lots of features were purchased upfront with the buying of a switch solution, for example. 
That doesn't mean every application is efficiently provided discretely. Generally speaking, large scale tends to dramatically tip the scale towards platform-based solutions. Conversely, low volume tends to tip the scale towards hosted, Web-based approaches. 
That is a pattern we have seen for services such as business phone systems, carrier switches and server farms, for example. If a provider or enterprise has high…

Adoption, Not Availability, is the Broadband Problem

What broadband really needs--more than money to build more broadband-- is action on the demand side, says David McClure, U.S. Internet Industry Association president. The reason is that only about one percent of Americans actually cannot buy broadband access if they want to. 
"We can now reach 99 percent of all households in the United States with some form of broadband," he says. "We are in pretty darn good shape."
The issue some policy advocates seem to be concerned about actually is not "availability" but rather "appetite" or other issues. Some potential customers might want broadband, but do not own PCs. Others might want broadband, but can't afford to buy it. Many potential users do not use PCs. 
About 25 percent of the U.S. population does not use the Internet at all, McClure notes. "Worse than that, they don't care if they don't get it."
About 51 percent of the non-users say the Internet is not relevant to their lives, M…

36% of Social Networkers Want Access from TVs

A recent survey of over 1000 households conducted by ABI Research found that 36 percent of those who currently use social media on a regular basis say they’d like to access their networks on the TV screen.
Younger consumers were more interested in engaging with their friends through chat and messaging, while middle-aged respondents were more likely to be interested in more passive social networking behavior such as checking status updates. 
The most popular potential application for those over 50 who expressed interest in TV social networking was being able to see what their friends were watching on TV.

Not a Good Day for Arizona Cox Customers

Both broadband access and voice seem to be down across much of the state.

Time Warner Cable Grows Revenues 8% in Recessionary Year

How does Time Warner Cable perform in a full year of recession? By growing revenues eight percent, or $1.2 billion, over full-year 2007, to reach $17.2 billion. Subscription revenues were up eight percent($1.2 billion) to $16.3 billion. Video revenues grew four percent ($359 million) to $10.5 billion, benefiting from the continued growth in digital video subscriptions and video price increases.

High-speed data revenues rose 12 percent ($429 million) to $4.2 billion, driven by continued high-speed data subscriber growth. Voice revenues climbed 36 percent ($426 million) to $1.6 billion.

The rate of revenue units added slowed later in the year, though. That is in line with past recessions, when customers delayed adding more enhanced services. 
Still, Time Warner faces a problem in its legacy video business that telcos face in their legacy voice business. Time Warner Cable is losing "basic video" subs, as telcos are losing voice line customers. Time Warner Cable lost 119,000 custom…

60% of Workers Use Social Networking Sites

About 60 percent of working Americans (18 years old or more) used one or more social networking sites at end of 2008, according to Compass Intelligence. About 35 percent of working Americans say they use Facebook, while 29 percent say they use LinkedIn.About 60 percent of working Americans not using social networking say they don't use them because "it's not a good use" of their time.

Conferencing Now the Lead UC Application, It Seems

I've been speaking on, and running, panel sessions on unified communications for some time, as have many of my other associates who follow UC. I've noticed a shift early this year: people now are talking a lot more about conferencing, and less about integrating voice, instant messaging,email,  mobile and fixed services. 
What that suggests is that "what is selling" is conferencing. It might, or might not, suggest a certain sluggishness of buyer response to the more-traditional pitches. 
Jill Taylor, product marketing executive for Verizon Business, says  "conferencing is becoming the lead product for UC." That's a switch. 
Verizon Business is one of the first global service providers to integrate audio and Web conferencing services across multiple leading IM services, including IBM Lotus Sametime Unified Communications and Collaboration, Microsoft Office Live Communications Server  2005 and the Cisco Jabber XCP, says Taylor. 

"I don't know that it …

More 3G, But Majority of Users Don't Use Broadband Features?

Use of smart phones with full HTML browsers that offer a true Internet browsing experience increased steadily in 2008, according to comScore. 
So mobile browsing  grew 34 percent during
the year. But users on 3G networks grew 43 percent from November 2007 to November 2008.
So the percentage of 3G users using the mobile Web did not change over 2008. In fact, the percentage of 3G users who do not use the mobile Web might have slipped a bit.