Growing Business Social Networking

A fair number of enterprise and business users already are making use of online-based collaboration tools, says Compass Intelligence. This table shows the percentage of respondents in a recent 351-respondent survey that say they now are using one or more online collaboration tools for business in February 2008.

Respondents were most likely to say that they were not currently using these capabilities, as one possibly would suspect. But most say they are interested in using them for business purposes, if their company offered it to them.

For the time being it seems professionals are using online collaboration tools without the explicit blessing of their IT staffs.

In other words, millions of professionals and other knowledge workers that want to connect, interact and transact using business-based social Web tools.

IDT: A Company in Transition

"IDT is a company in transition," says IDT Corp. CEO Jim Courter. No kidding. Basically, IDT is harvesting the cash flow from its declining U.S. calling card business and consumer phone services division and investing in a somewhat bewildering collection of other businesses.

In fact, IDT Corporation now describes itself multinational holding company. IDT Telecom, the original company business, represents most of IDT's revenue. IDT Telecom sells prepaid and rechargeable calling cards, offers consumer local and long distance service, prepaid wireless phone services and wholesale carrier services.

IDT Energy, which operates an energy services company in New York State. IDT Carmel is a receivables portfolio management and collection businesses.

American Shale Oil Corporation is in the U.S. oil shale business.

IDT Local Media includes CTM Brochure Display, a brochure distribution company and the WMET-AM radio station in the Washington D.C. metropolitan area.

IDT Internet Mobile Group is a new media content distribution company. It includes Zedge, a Web site and platform to produce and distribute mobile content. IDW is a comics, graphic novel, and children's book publisher.

IDT Spectrum holds a significant number of Federal Communications Commission licenses for commercial fixed wireless spectrum in the United States. IDT Global Israel is a call center operation.

"IDT is in a metamorphic stage de-emphasizing some of our historical operations and investing in new businesses that if successful can greatly enhance long-term shareholder value," adds CFO Steve Brown.

At the moment, IDT is harvesting cash from its declining communications business by slashing costs at a faster rate than revenue is dropping. Compared to a year ago, costs are coming down faster than revenue is dropping.

"Gross costs per minute were down 13.7 percent in the second quarter compared with the year ago, while revenue per minute fell only 8.5 percent, a spread of over five percent, says Brown.

In its most-recent quarter, IDT Corp. revenues were $476.7 million, down seven percent year-over-year. The quarterly loss of $62.5 million was significantly higher than the net loss of $27 million one year ago.

About $386 million was generated from IDT's wholesale, prepaid and retail calling businesses.

Verizon Expands 7 Mbps DSL Service

Verizon now has activated 7 Mbps DSL service in 12 Eastern states and the District of Columbia.

The new service more than doubles the speed of Verizon's current fastest offer and costs as little as $39.99 a month when ordered with an annual service plan.

Customers in Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, Vermont, Virginia, Washington, D.C., and West Virginia can get the higher speeds now.

Verizon expects the 7 Mbps service to be available to more than two million homes and small businesses in 22 states and the District of Columbia by the end of 2008.

In a bit to provide more value as well, Verizon offers an optional security suite; 4 gigabytes of online email storage; and premium tech support for routers, network cards, video cards, sound cards, CD/DVD reader-writer, hard drives, flash memory systems, printers, scanners, gaming consoles and firewalls.

Verizon also offers entertainment services from Disney Connection, as well as a 24-hour news and information channel, ABC News Now; ESPN360 and NFL Network Game Extra.

The move positions Verizon in the "sweet spot" for consumer bandwidth consumption, at least if forecasts by analysts at Ovum are correct.

Mobile Data Networks Face New Strain

Jonathan Christensen eBay Skype division general manager, says “the phone is dead," arguing that VoIP over mobiles will accelerate the trend. Agree or disagree, mobile network operators,will face issues other than loss of lucrative long distance calling revenues and bandwidth consumption, as the "VoIP over mobile" trend gathers speed.

As it turns out, says Mike Schabel, Alcatel-Lucent general manager, bandwidth consumption isn't the only problem mobile networks face, and in some ways may not be the key problem posed by IP applications.

Consider Session Initiation Protocol. As SIP applications start to represent more of any mobile user’s total usage, the problems become evident. Ignoring for a moment the revenue implications, SIP-based applications present previously-unacknowledged issues. The reason is that although SIP-based voice and communications are not a terribly big consumer of bandwidth, they are a huge consumer of radio network signaling resources. And it is radio network contention that is the gating problem, in some ways, not bandwidth consumption.

Where a typical user might place most of the bandwidth load on the radio network by using Web browsing, P2P and WAP applications (and where SIP bandwidth is negligible), the signaling load is highly disproportionate.

Where HTTP use might represent 44 percent of total bandwidth use, and consume 1.3 hours of airtime, while imposing 240 signaling events, a SIP application might chew up 3.9 hours of airtime and 2,240 signaling events despite using just 0.02 percent of total bandwidth.

Likewise, a VPN connection might represent just 2.4 percent of bandwidth consumed, but represent 20.75 hours of airtime, while imposing 5,970 signaling events.

So the problem for a mobile network provider is not simply a cannibalization of current revenue, but dramatically-more-intense pressure on the radio access network. And the issue isn't bandwidth: it is signaling overhead that chews up radio network element capacity, even when bandwidth is hardly used.

Necessity Drives Strategy at Qwest, Other Firms

Service provider strategy sometimes is dictated by necessity, and to the extent that service providers large and small now face different "necessities," there is an increasing divergence in strategy. Over time, in other words, service providers will "look" different from each other where in the past they all had resembled each other to a striking degree.

Consider Qwest, one of the three former "Baby Bells." Qwest always had a customer geography significantly more rural than the other original seven Bell Operating Companies. But when SBC gobbled up Telesis, Ameritech, AT&T and BellSouth to form at&t; while Verizon was formed from the former Bell Atlantic, NYNEX, GTE and MCI, the differences grew.

Both at&t and Verizon have the leading mobile assets and much-larger scale than any other contestants in the marketplace. Qwest is far smaller, does not own a national wireless network and faces much-larger challenges in the fiber-to-customer area because of lower density serving areas.

So where a triple play offered over owned facilities strategy makes sense for Verizon and at&t, for Qwest it does not. Qwest simply doesn't have the customer volume, density or access to capital that strategy would require. Unlike the other former Baby Bells, Qwest's fiber-to-customer strategy is not anchored by video services, but strictly by broadband data services.

Lacking a mobile network, Qwest originally tried offering services under its own brand, as a mobile virtual network operator. But it now has decided that approach has drawbacks, including some handset limitations, financial returns limited by low volume and, arguably, the lack of a popular "brand name" in wireless.

Qwest also has to maintain a balance between capital investment and shareholder return issues, such as reducing debt load, buying back shares and supporting the payment of dividends.

So Qwest's strategy will embrace partnerships in areas such as video and wireless, in ways that Verizon and at&t will not. In the process of revising its mobile strategy, Qwest also says it will rely on DirecTV for the video services component of its offerings. And where video services will be a key part of the payback for FiOS and LightSpeed, Qwest expects to get its payback strictly from new broadband services.

That's going to necessitate high penetration and new services as well. By 2011 Qwest plans to increase its broadband penetration from 23 percent to 40 percent.

Qwest will "look different" in its strategy because it has to. It doesn't have the scale or resources to become a smaller version of at&t or Verizon. Consider that at&t books about $39 billion annually while Verizon books $24 billion annually.

Qwest books about $13.8 billion a year in annual revenue. Neither does Qwest closely resemble the middle tier of independent telcos, either. Embarq, for example, books about $6.4 billion in annual revenue. Windstream books about $3.3 billion annually. But most independent telcos are far smaller than that, booking millions to hundreds of millions worth of revenue each year.

What makes Qwest different from the mid-tier of telcos such as Windstream and Embarq is that Qwest operates global backbone networks that can feed a more-robust enterprise business. The other providers might more logically be called regional "local" providers. Some competitive local exchange carriers also have a "national local" character, the difference being that such firms generally only serve the business customer segments.

In many ways, the interesting strategic paths will be among the smaller telcos rather than the tier one providers. Very-small independents typically are very interested in offering IPTV services. The middle tier of companies generally are not. The middle tier of companies may have brighter prospects in business customer segments. Very-small providers typically will not. Very-small telcos may not find out-of-region operations too compelling. The middle tier, at some point, virtually has to look at footprint expansion.

Since strategy is the result of multiple background, financial and management factors, we can expect that some of the more-differentiated approaches will be taken by those providers who are particularly challenged in some way. Inability to create the triple play or quadruple play strategy; geographic or demographic limitations or sheer borrowing power will force some managements to strike out on atypical paths from that generally seen as the tier one global provider approach.

at&t to Raise Text Messaging Rates

It appears at&t Wireless will be raising the prices it charges for casual sending and receiving of tex messages, though "bucket" prices remain unchanged. Effective at the end of March, the charge for text messages not part of a messaging bucket will be 20 cents.

For most of us, that means the buckets make even more sense. For light users, the move just shows how data services are becoming the revenue model for mobile services, with voice gradually declining in importance.

WiMAX Segmentation

One of the unresolved questions about WiMAX networks in the U.S. market is whether a sizable new business can be created around devices other than cell phones and smart phones.

And there is at least some reason to believe an opportunity exists, though pricing might be an issue.

Analysts at Compete Inc. recently asked consumers shopping online for consumer electronics devices about their interest in connecting devices to the Internet.

More than 50 percent of laptop and GPS shoppers were very interested in devices that enable enhanced connectivity using an open access network.

A follow-up question revealed that consumers are also willing to pay for this connectivity, with about 25 percent willing to pay over $50 at the time of purchase to include this feature, Compete suggests.

Recurring costs are the bigger issue, though. It isn't clear how many users will be happy to pay recurring connection fees if the option to use their in-home Wi-Fi networks is available for no incremental cost. Up to this point, no matter what they might say as part of a poll, few camera users have proven willing to spend money for network services.

Sprint Mogul to Use Rev A Broadband

Sprint is releasing a software update for the Mogul phone, made by HTC Corp. of Taiwan, that will enable the phone to connect at Rev. A speeds.

Downloads speeds should be 600 kilobits per second to 1,400 kbps, up from a range of 400 kbps to 700 kbps with Rev. 0.

It will be capable of uploads of 350 to 500 kbps, up from 50 kbps to 70 kbps.

Traffic Shaping Enhances User Welfare

To protect all users of shared access resources from service degradation, it makes sense to charge a congestion premium or use traffic management techniques, say researchers at the Phoenix Center. When congestion-causing applications degrade the experience of other users, the most efficient traffic management actions would be targeted at applications that cause congestion externalities and not upon all applications generally, say George S. Ford, PhD, Thomas M. Koutsky, Esq.and Lawrence J. Spiwak, Esq., Phoenix Center analysts.

Ironically, service providers tend to do too little to reduce the harmful effects of negative externalities caused by network congestion, they say. So those who argue that the Federal Communications Commission needs to impose prohibitions against network management practices because broadband providers will always be “too aggressive” in clamping down on uses of their network have it precisely backward, the researchers argue.

"It is socially desirable to charge a congestion premium when congestion-causing applications are used on a broadband network," Ford, Koutsky and Spiwak say. That is especially true when the congestion charge targets a particular congestion-causing
application, not blanket "price-per-bit" rules, they argue.

Indeed, if such charges are not targeted, then the price premiums may not achieve their desired purpose, Phoenix Center argues.

The objective of such charges is to attenuate congestion by requiring users of bandwidth-greedy applications to consider more fully the
congestion costs imposed on others.

"The fact that a broadband service provider operator may engage in application-specific traffic management techniques should not necessarily be viewed by a policymaker as evidence of illicit anticompetitive intent, the researchers say.

In fact, congestion is more likely to occur in shared media networks, such as wireless broadband networks, where all users share the common pool of spectrum capacity.

The complexity of this issue indicates that specific, prescriptive rules that ban entire categories of traffic management techniques across all network architectures and topologies can result in sub-optimal outcomes, they say.

"Our focus is upon the presence of congestion externalities: that is, the use of applications by some users that reduce the value of broadband service to other users on the broadband network, without compensation, by causing delays or other service quality problems," the researchers say.

"In the presence of a congestion externality, network management—including, but not limited to, the differential treatment of particular applications—is welfare enhancing," Ford, Koutsky and Spiwak say.

Apple Won't Block VoIP Apps Using Wi-Fi

CEO Steve Jobs says Apple will not block third-party development of VOIP applications for the iPhone and iPod Touch, as long as the applications run over Wi-Fi. That's an obviously politically astute move given Apple's relationship with mobile providers who aren't keen on the idea.

Nevertheless, the idea might allow everybody to get a bit more experience with "dual mode" service, using a widely-deployed handset, without a lot of expensive bets on particular devices, interfaces or marketing.

Mobile Content Habit Grows

Mobile phones for lots more than just talking, especially by Millenials, according to a recent study by the Deloitte Development-Harrison Group.

Nearly 90 percent of 13-to-24-year-old Internet users surveyed said they sent text messages frequently or occasionally.

Slightly more respondents overall said they used their handsets as cameras than said they used them for texting.

The intensity of usage of just about any data-oriented application drops in older demographics, as you might expect.

Ubiquitous Wireless Broadband: New Possibilities

As new WiMAX and 700-MHz broadband networks are built, two different sorts of new user behaviors will emerge. The abiliy users have to access Web-based data and applications anywhere, at any time, over wired and wireless networks, is going to allow business users to rely on network-based applications in a way unthinkable at present.

“Cloud computing” or "network computing" will move applications and data storage away from the desktop or laptop to remote servers accessed using high-speed networks. That's going to change enterprise data center strategies in profound ways.

It will make possible lighter, more portable access devices on the PC side, and might also drive the emergence of even-more-powerful portable devices on the handheld side, as business users start to rely on network-based resources where they now rely on their own hard disc drives.

The other potential development is that the range of consumer behaviors related to wireless broadband data might emerge.

"Our recent research shows that 62 percent of American adults have either accessed the Internet wirelessly or used non-voice data applications, such as texting, emailing, taking a picture, or recording video, with a handheld," says John B. Horrigan, Pew Internet & American Life Project associate director.

On the average day, 42 percent of those with cell phones or other wireless-enabled handhelds use the devices for at least one non-voice data application.

Users in this emerging environment will fall ino at least two different use profiles, Horrigan argues. Mobile business use might start to resemble desktop use. But consumer users might embrace digital content to play games. Today, some think mobile blogging or social networking might emerge as widespread new behaviors.

Apple, RM Battle Shapes Up

Apple took 28 percent share of the fast growing U.S. converged device (smart phone) market in the fourth quarter of 2007, behind Research in Motion’s 41percent, but a long way ahead of third placed Palm at nine percent, say Canalys researchers.

Apple also finished ahead of all Windows Mobile device vendors combined, whose share was 21 percent in the quarter.

Globally, converged device shipments rose 60 percent to hit 115 million in 2007. U.S. sales doubled.

Nokia remained the global market leader, shipping 60.5 million smart phones, while RIM shipments grew 112 percent to 12.2 million.
Globally, Symbian operating system devices had 67 percent share, followed by Microsoft on 13 percent and RIM with 10 percent.

Apple claims that nearly 70 percent of all mobile Internet traffic is generated by iPhone users. Executives at Google, meanwhile, have confirmed the basis thesis: iPhone users surf the Web way beyond anything seen up to this point.

On the other hand, RIM points out that nearly two thirds of its 12 million BlackBerry subscribers in December 2007 were government or corporate customers.

The observation is that as the smart phone market continues to grow rapidly, the dynamics of the U.S. market--as distinct from the global markets--are shaping up, in part, as Apple going "up market" to enterprises and RIM going "down market" to consumers. That's not to dismiss Microsoft-powered or Nokia devices, but simply to illustrate a dynamic.

We have a market likely to take new shape as devices and users expand beyond the original base of "mobile email" addicts. The iPhone has shown there is a new class of user who uses mobile email but also surfs the Web and uses the mobile Internet in ways we haven't seen before. That's going to get designers moving in different directions as the various segments start to emerge. For some users the current iPhone or BlackBerry interfaces still will work. For others, something else might emerge.

Personally, I like the ability to swap SIMs between devices, which iPhone doesn't want me to do. I like to be able to change my own batteries, which iPhone doesn't want me to do. Small things, of course, but real barriers to me getting rid of my BlackBerry. Other choices will have to be made by music or video afficianados.

DirecTV Awaits Satellite Launch

Satellite launches always are dangerous things. But, should the DirecTV 11 broadcast satellite be launched successfully on March 12, DirecTV will be able to provide 150 national high-definition channels and will be capable of supporting spot beams carrying 1,500 local high-definition channels, typically useful for beaming retransmitted local broadcast station signals back into the local markets.

In February 2007 a Zenit-3SL rocket on the Sea Launch platform, the same one DirecTV is using, exploded on the platform. It happens from time to time.

The odds of a Sea Launch satellite launch will fail are about one in 8.5. Of roughly 25 attempts to date, the company has experienced a failure rate of 12 percent. That's no particular slam on Sea Launch. Launch failures have been part of the industry's reality since the beginning.

Enterprise Users Get their iPhone

Starting in June, Apple iPhones will be able to receive push email, calendar and contact information from Microsoft Corp.'s Exchange server. Apple has licensed Exchange ActiveSync from Microsoft and is building it right into the iPhone, so that iPhone will connect out-of-the-box to Microsoft Exchange Servers 2003 and 2007 for secure over-the-air push email, contacts, calendars and global address lists.

The iPhone 2.0 software provides a configuration utility that allows IT administrators to easily and quickly set up many iPhones, including password policies, VPN setting, installing certificates, email server settings and more.

Once the configuration is defined it can be easily and securely delivered via web link or email to the user. To install, all the user has to do is authenticate with a user ID or password, download the configuration and tap install. Once installed, the user will have access to all their corporate IT services.

Built-in Exchange ActiveSync support also enables security features such as remote wipe, password policies and auto-discovery.

The iPhone 2.0 software supports Cisco IPsec VPN to ensure the highest level of IP-based encryption, as well as the ability to authenticate using digital certificates or password-based, multi-factor authentication.

The addition of WPA2 Enterprise with 802.1x authentication enables enterprise customers to deploy iPhone and iPod touch with the latest standards for protection of Wi-Fi networks.

Those are features most enterprise information technology managers require before a device is approved for widespread use, and represent a huge potential opportunity for Apple to penetrate enterprise accounts.

Some even think the iPhone is about to become an envied thing: a "platform."

“Think about it," says venture capitalist John Doerr, who has launched a $100 million fund to back iPhone-related application companies. "In your pocket, you have something that's broadband and connected all the time. It's personal. It knows who you are and where you are. That's a big deal. A really big deal. It's bigger than the personal computer."