IMS Realism

IP Multimedia Subsystem seems to be moving from concept to deployment, if recent observations by Manuel Vexler, IMS Forum VP, are any indication.

For starters, billing and operations support software firms are starting to be more active. That suggests their carrier customers finally are thinking about generating revenue from deploying IMS features (IMS is a platform allowing services providers to rapidly and cheaply create new services, test and then deploy them).

Carrier chief financial officers also seem to be asking tougher questions, which suggests carrier technologists are asking for authority to buy platforms. Many of the questions seem to be of the "you bought ATM 10 years ago, soft switches five years ago and now you want to buy IMS?"

IMS backers also now seem to be more aware that it really is infrastructure, and that the search for services will have to follow. "You don't have Google until you have the Internet," Vexler notes. Up to this point some have worried about identifying some "killer app" that would justify IMS deployment. Now there may be more awareness that until the platform is in place we won't really know what apps will resonate.

It probably still is a fair bet that wireless apps will be early candidates, as IMS originally was created by mobile carriers.

at&t 4Q: Guidance More Important Than Results

What's important about at&t's fourth quarter results is less the robust wireless and broadband services gains; or the matching financial performance. The fourth quarter included growth contributed by the purchase of BellSouth, so comparisons to the same quarter of 2006 do not mean much. More important is the guidance at&t offers about its 2008 performance, as that will reflect more directly--but not exclusively-- internal or organic growth, rather than growth by acquisition.

The company says it is confident about sustained double-digit growth in adjusted earnings per share in 2008. Some of that will be delivered by merger synergies or other cost cuts, as revenue will be growing at a mid-single-digit range in 2008. Growth in 2009 and subsequent years is expected at about that same rate: at mid-single-digits, possibly better.

Mid-teens wireless service revenue growth is expected in 2008, but again that partially is driven by the acquisition of Dobson Communications.

Enterprise revenue growth is expected to be in the mid-single-digit range by 2010. In-region consumer revenues will "be positive." In-region business services will grow in the mid-single-digit range as well.

So the company says it is "confident" it has the ability to deliver sustained double-digit growth in adjusted earnings per share and strong growth in free cash flow in 2008 and on an ongoing basis.

Some of that performance is driven by cost savings over the next few years because of the BellSouth merger. Company executives say they wrung about $2 billion in cost out of the company in 2007 and will save $5.9 billion in 2008 as well. Savings will grow to "more than $7.0 billion in 2010."

The forward-looking guidance arguably is more important than the fourth-quarter results themselves, which obviously were driven by acquisition-inflated numbers.

The company's net gain of 2.7 million wireless subscribers was the highest quarterly subscriber increase ever for any U.S. wireless provider, up 13.5 percent from 2.4 million net adds in the year-earlier fourth quarter.

But that performance includes the impact of the acquisition of Dobson Communications, which added 1.7 million subscribers.

That's not to denigrate at&t's performance. It was a good quarter. The point is that we all need to separate out organic rates of change from those wrought by the impact of acquisitions. Lots of companies in communications hide slow or lagging internal growth by buying other companies, with a predictable growth in revenue or customer base. That sometimes is a sign of weakness, not strength.

BroadSoft for Act!

Forget the hype about "voice mashups," the integration of communications capabilities with applications. The idea is about as simple as mating the BroadSoft call control and feature set with the Act! customer management application.

The VoIP AddOn developed by C3IP seamlessly integrates ACT! with BroadSoft’s BroadWorks platform Basically, BroadWorks users now can access those features directly from Act!

That means the ability to "click to dial" from the database, automatic logging of calls and screen pops on inbound calls, for example. So far, voice mashups largely have been developed as a way to improve the efficiency or effectiveness of current business processes.

That's just the way such innovations are introduced, because in a business context there has to be some measurable benefit on either cost or revenue fronts. The easiest way to demonstrate such effects is to "save money" or "save time" doing things that already must be done.

It will be a while before people start to redesign whole processes in light of ubiquitous communications embedded inside the applications themselves.

EarthCaller: Free U.S. Calling

EarthCaller (http://earthcaller.com), a new PC-to-phone service developed by Jaduka that allows its users to call any landline in the U.S. market for free, has been launched.

EarthCaller is said to run the calls over the Public Switched Telephone Network, with obvious call quality benefits. That's really a teaser for international calling, offered on a prepaid basis.

EarthCaller currently is PC-compatible at the moment.

Service Providers Don't Know Much About Customers

About 62 percent of global network service providers (telcos) say they do not today have enough information about how their customers behave, according to a new study commissioned by Apertio.

About 76 percent of respondents say customer profiling is important, closely followed by identity management. (64 percent of respondents say that is important. That sort of knowledge is important since 67 percent of respondents say "personalization of services" is a key revenue opportunity for IP and data services

The situation won't be too surprising to anybody who has been in the service provider industry long enough. The problem arguably is easier to deal with in the IP realm, but even there network service providers might not have access to as much granular data as IP application providers do.

Some observers continue to think that demographic information is helpful, and it is, up to a point. More significant, others think, is actual user behavior expressed in application use, and what users do inside those applications. Since telcos and cable companies don't have much useful information on their customer demographic profiles, ability to capture clickstreams, when legal, is much more useful.

That's another reason why the drive to capture Internet access account is so important. It isn't simply that broadband access is becoming the foundation service for a landline services provider, it is that the ability to personalize a user experience comes from knowledge about clickstreams, not calling patterns or street addresses.

Auction Starts Jan. 24

Bidding begins Jan. 24 for the 700-MHz spectrum that will, among other things, allow creation of a new broadband network with significant open access requirements for devices and applications. The auction also will allow some regional players to acquire new spectrum on a local basis, either to fill in a national footprint or to serve some new local need. The biggest unknown is whether Google will place an initial minimum bid only, and then watch other bidders increase their bids to win the auction, or make some move to try to win the spectrum.

Under FCC rules, the identities of daily bidders will be kept secret although bid amounts will be posted on the agency's Web site on a daily basis. So we'll know soon enough.

Most observers saay the requirement to support any technically compliant device on the C block national network, as well as any lawful applications, has contributed to a recent "embrace" by Verizon and at&t Wireless of open-network policies even on the existing mobile networks.

At least so far, many observers say Verizon Wireless is the most motivated bidder as it needs additional spectrum more than at&t, for example. Some think at&t will look to the regional allotments in other blocks as a way of filling in its footprint.

at&t launches VoIP in Detroit

At&t says it will soon launch VoIP for U-verse customers. The service has been launched in the Detroit market. The service is a replacement for traditional landline service and is priced accordingly.

A $40 monthly fee provides unlimited domestic calling while a $20 a month plan provides 1,000 long distance minutes. The service includes an online call manager portal, unified messaging, click to call from the TV, and simultaneous ring of up to four separate telephone numbers.

So the long march towards VoIP by dominant telcos begins. As just about everybody now recognizes, VoIP will in some cases represent an incremental change in user behavior, in some cases a replacement for traditional calling and in some cases a better way to do traditional calling with a better user experience.

Pretty soon we'll start to get some insight into the ways VoIP helps traditional telcos, in addition to representing a threat to established revenue streams. Without widespread fiber-to-customer networks and a complete shut-off of traditional time division multiplex infrastructure, it will be hard to say for certain.

But Verizon executives think they will save operating expense when they are able to shut off the TDM voice network and shift everything over to IP.

Employees Spend $693.50 Calling and Texting When Abroad

Global U.S. enterprise travelers spend about $693.50 on an 11-day trip, about 12 times more than the average monthly wireless bill, according to a new survey conduced by Harris Interactive and sponsore dby Brightroam.

“The study shows that 15 percent of employees make at least one international trip per year, which translates into costs of more than $950,000 annually per 10,000 employees," says Jeff Wilson, Brightroam general managers. Voice accounts for about 80 percent of the charges while data charges for Web browsing or testing represent 20 percent of total roaming charges.

About 62 percent of calls are made directly for business purposes while the balance of calls are personal, at 38 percent. Cell phones account for half of the devices being used to make those calls while 29 percent are originated from landlines.

The average number of calls is nine to 10 calls a day. About half of business users have smart phones rather than traditional wireless phones, the survey finds.

About four out of five companies surveyed say cell phones or smartphones are the primary communication tool used when employees travel internationally and 57 percent of all calls made on a trip are made on these devices. Users also are more likely to use a cell phone rather than a land line phone whether they are calling locally, to another country or calling back to the United States from abroad, the survey finds. If not using their cell phone, 60 percent will use a calling card and half will use the hotel phone.

Half of calls are placed back to the United States while 40 percent are local calls within the country traveled to.

Wireless Open Access Watch

With a change of presidential administration, and the high possibility that the White House will be occupied by a Democrat, all bets are off where it comes to the composition, leadership and therefore direction of Federal Communications Commission policy. But it is fair to say that a more heavily regulated approach is likely if Democrats win the White House. Incumbent tier one U.S. telcos won't like that. For other reasons, cable industry leaders will be happy as well. Competitive providers might well think their chances improve as well.

So it might be all that significant that Commissioner Michael Copps, a Democratic member of the FCC, seems to want to give incumbent wireless providers a bit of time to make good on their recent pledges to move towards more open networks, allowing any devices or applications compliant with their networks to be used.

That's an obvious counterweight to any thinking by an eventual owner of a new national broadband network that construction and activation of that similarly open network should be built as slowly as legally possible, essentially "warehousing" spectrum as long as possible. The motivation obviously is to extend the life of current revenue models as long as possible.

Pressure to keep those promises about openness on the Verizon and at&t Wireless networks will remain high if Democrats win the White House. In fact, pressure to open up wireless networks more than before is likely unstoppable if Republicans retain the White House as well. The 700-MHz auction rules about openness were pushed through by a Republican FCC chairman and the market seems to be shifting inevitably in the direction of open devices because of the market force exerted by the Apple iPhone and Google, in any case.

Dominant wireless carriers really would prefer not to deal with more openness. But it appears they no longer have a choice. That's going to be good for some new handset providers, application developers and end users, both consumer and business.

Bidden or unbidden, openness is coming.

Who Buys Sprint?

With its stock price now so low, it is inevitable that speculation will grow about the fate of Sprint Nextel as an independent company. There has always been some level of speculation about Comcast's possible interest in Sprint. Most likely there also will be talk of what Google might want to do with those assets. There are lots of plusses and minuses for either company.

Given the growing importance of product bundling, as well as wireless, it might make sense for Comcast to have its own wireless assets, it is argued. Comcast is a part owner of some wireless spectrum through SpectrumCo and also uses the "Pivot" offering developed by Sprint to offer a branded wireless service to cable customers.

Then there is the fourth-generation WiMAX asset Sprint could provide. But there are lots of arguments why Comcast can't, or shouldn't consider buying Sprint. Start with the WiMAX network, which obviously would operate outside Comcast's cable franchise territory. There is one big unstated "no no" among leading cable operators, and that is that one never competes with another cable operator. "I have mine, you have yours" has been the rule since the industry began in the late 1940s. Comcast would not likely want to be first to break the taboo.

Comcast shareholders also seem to be terrified that Comcast might embark on just such an expensive acquistion. The last time Comcast tried, attempting to buy Disney, the stock was pounded. Any Sprint acquisition would likely have the same effect this time, and Comcast's stock price already is beaten way down.

Comcast also says it continually monitors what is happening in the wireless industry, and one could make the observation that as crucial as wireless has been as a revenue growth engine, slowing has to occur as the market reaches complete saturation in just a few years. Nor is it clear that cable customers see wireless as a "natural" part of a bundle. That's arguably not the case for buyers of "phone service," who may well see a wireless-broadband-voice bundle as "natural" and "logical."

Google, on the other hand, might also be seen as a logical consolidator. It clearly wants mass in the wireless market, and control of Sprint's customer base would be helpful. The price tag is really low. The 4G network makes much more sense for Google than it does for Comcast, and the cost of the spectrum is already baked into Sprint's share price.

On the other hand, Google wants to work with all the major wireless carriers, and becoming a competitor doesn't help. Nor will Google want to mess with operation of three networks or Sprint's marketing challenges. Still, to the extent that ownership of a national broadband wireless network might be helpful, and if the eventual owner of the 700 MHz C block spectrum is a company like at&t or Verizon, who might drag their feet putting that spectrum into service, Google and other supporters of a mobile Web approach untethered from legacy considerations about voice might want a chance to move ahead with WiMAX using a new business model.

Perhaps Google could even work out a pre-planned buy of all of Sprint, and then immediately spin off the non-WiMAX assets, to avoid becoming a competitor to at&t and Verizon. Other scenarios obviously will make sense to people if Sprint's share price doesn't climb soon.

Easier BlackBerry Use

It's going to be easier to read and respond to text, attachments and image-formatted documents on Research in Motion BlackBerries sometime later this year. RIM says it will upgrade its software so users can edit documents directly from the device and to view messages in their original formatting. That sort of functionality is obvious on Windows Mobile devices, so RIM has to keep pace. Apple's growing presence and market share also might be an issue, as the "easy to use, the whole Web" philosophy has got to be changing user expectations about what they ought to be able to do, and how, on their smart phones.

In the third quarter of 2007, Apple captured 20 percent of all U.S. smart phone shipments, Gartner Inc. says. RIM got 39 percent.

Enterprise iPhone

Enterprise iPhone users now have a specific set of plans and a financial inducement to sign up for a minimum two-year enterprise iPhone plan. The inducement is a $25 a month discount through December 2008 for new accounts. Users can sign up for the typical voice plans, and then pay a new enterprise data fee. At least that appears to be the case. The Web site isn't crystal clear about the matter.

The enterprise data plans include visual voice mail, unlimited data with both email and Web inside the United States, plus a bucket of text messages.

Data plans range from $45 to $65 a month. For users requiring data access outside the United States, at&t also offers data global roaming plans costing $24.99 a month with 20 megabytes of global data access, and a $59.99 a month plan offering 50 Mbytes of data access in 29 countries outside the United States.

It will be interesting to see how user perception of the value of a smart phone changes over time. Up to this point, the Web browser, though seen as useful, as been of the "nice to have" rather than "must have" feature, as this survey data from InfoTech suggests. So far, though, Web browser use and mobile searches by iPhone users have been significantly higher than is the case for a typical smart phone user.

As the developing trend of use of Web-enabled enterprise software continues to grow, the browser obviously will assume new importance.

Thailand, SE Asia iPhone Deal?

It doesn't appear to be a done deal. In fact, it might be premature to say the deal will get done, but Thailand’s Advanced Info Services is collaborating with shareholder Singapore Telecom and Australia’s Optus to win the right to bring Apple’s iPhone to Thailand and the southeast Asia-Pacific region.

AIS Chief Marketing Officer Sanchai Thiewprasertkul says " up to 60,000 iPhones have been smuggled into Thailand so far," according to TeleGeography.

Wireless Substitution: in China

China Telecom, the nation's largest fixed line company, reported a decline of 2.7 million local access lines in 2007, as a result of great competition from wireless carriers. The number of fixed line subscriptions fell by 1.48 million in December, its fifth consecutive monthly loss, to takes China Telecom’s total to 220.3 million.

China Mobile added 68.1 million users in 2007 to take its total to 369.3 million, while Unicom added 18 million subscribers to reach 160.3 million subs.

Fixed line substitution isn't just a problem occurring in North America and Europe, apparently.

iPhone Drives Learning About Contextual Search

If engineers, analysts and marketers at Google are smart, and we would agree they are smart, lots of really important data is being gathered about what it is that mobile Web users do on their mobile browsers. The reason is that the preliminary data suggests that iPhone users are much more heavy browser users than users of other makes and models of mobile devices.

That sort of information is going to be really important as software designers at Google and elsewhere try to unravel the secrets of mobile search. So far, everybody seems to think there are contextual factors to mobile search that make it different from desktop PC search. In other words, people probably are going to be asking different questions and trying to do different things when initiating a mobile Web search. Directions have to be right at the top.

My own usage tends to be "what's the address of the place I am going to" and "where can I find the closest book store." Another favorite: "where can I find good Thai food close to where I am?"

Everything beyond that remains to be discovered.