iBasis Says Voice is Not a Commodity

iBasis has introduced its expanded portfolio of international voice products designed to address the needs of all telecommunications market segments from cost-driven wholesale carriers to retail mobile operators worldwide.

The iBasis portfolio now includes four basic products, each addressing a different market segment. Worth noting: if voice really were a "commodity," this sort of differentiation would not be possible. The implications are equally clear: voice actually is not a commodity or a single product. Rather, voice is a range of products, and they are not functionally identical substitutes for each other.

So if your voice strategy is based on it being a commodity, you might want to rethink your strategy.

Direct Voice provides wholesale carriers access to iBasis’ lowest-cost routes and direct pricing for highest possible savings, though capacity and coverage are managed to minimize costs. The product is aimed at providers whose primary concern is absolute lowest cost. "Direct Voice gives access to our direct routes at lowest cost," says Chris Lengyel, iBasis product manager.

"We engineer the product so one in three calls might be rejected for rerouting to another vendor or one of our products," Lengyel says. This might the case for some calling card providers or users of Web-based voice features.

Value Voice provides increased coverage and greater consistrency of key voice metrics. Value Voice features prioritized vendors to provide more stability of calling experience as well as a broader footprint.

Certified Voice provides full calling coverage, high route stability, call completion and capacity. Certified Voice is sold to consumer VoIP providers such as Skype and cable operators. It is ideal for retail VoIP traffic and "more of a tradtional wholesale product," says Lengyel.

Premium Voice offers mobile and retail operators guaranteed features and exceptional voice quality using direct connections with incumbent carriers and qualified providers. Includes advanced features such as guaranteed calling line information, fax and roaming. "Premium Voice" is sold to service providers whose primary concern is stability and quality.

Premium Voice often is bought by mobile operators because "it cannot fail," Lengyel says.

The new products recognize that some customers want price while others want coverage. Some want stability while others want roaming, fax or guaranteed CLI.

"What you see here is that there are varying levels of quality required for different applications," says Lengyel. "Skype doesn't care about fax or CLI, for example, but voice really isn't a full commodity," he says. "A minute isn't just a minute; there are lots of nuances."

"The mobile space needs quality," he says. "People will pay for quality, for some applications."

3G iPhone Cannibalizing Fixed Broadband?

At least some of us believe that mobile broadband someday will be as prevalent as mobile voice now is. Where broadband once was a service delivered to "places," it will be delivered to "people."

The immediate issue, though, might be whether at least some users will decide to substitute mobile broadband for fixed broadband. 

That, at least, is a possibility as the number of lower-income 3G Apple iPhone users increases. 

Ownership of the 3G iPhone rose 48 percent from June 1 to the end of August among households earning between $25,000 and $50,000 a year, compared to 21 percent overall.

Since iPhone ownership disproportionately has been concentrated among higher-income households, the shift might suggest that users are making rational decisions about value and price.  If a 3G iPhone provides mobile music, voice, email and Internet access, then the cost of using it is balanced by cost savings from avoided landline voice and broadband spending.

Ultimately, personal broadband might mean some amount of cannibalization of fixed broadband. And we might be seeing just that at work, among 3G iPhone users.

Up to 33% of Mobile Broadband Buyers Have Gripes

More than 10 percent of mobile broadband users feel that they were mis-sold, according to a survey sponsored by U.K. mobile provider O2. Nearly a third complaining that the ongoing cost was higher than expected while 20 percent found they were unable to use mobile broadband where they wanted it despite being told by providers that there would be coverage.

Another 13 per cent were frustrated that there was no returns guarantee if the service wasn’t right for them and around half wanted inclusive Wi-Fi as a standard option.

In response, O2 is changing practices to address the complaints, including a price reduction on core mobile broadband tariffs, the launch of a new coverage checker and a 50-day "happiness guarantee."

International roaming has been a key element in "sticker shock," so that feature will not be automatically enabled for all new O2 Mobile Broadband customers. New customers will need to contact O2 Customer Service to have roaming activated so that O2 can explain the likely costs.

For heavy users, O2 is also introducing a new 10 GByte package for £30 per month on a two year tariff and is also the only provider to offer all its customers unlimited Wi-Fi through any of the 6,100 hotspots through an exclusive partnership with The Cloud.

In addition, O2 is reducing the price of its core Mobile Broadband tariffs, with 3GB packages costing just £15 per month. Customers purchasing an 18-month or 24-month contract will also receive a free USB modem (or £99.99 on a rolling monthly contract).

An improved coverage checker will provide what O2 calls "an honest assessment" of the likely coverage customers will receive at their home locations.

The 50-day guarantee allows users to terminate service without penalties and return adapters for a refund.

Internet Gains 23% as News Source

Many more Americans are turning to the Internet for campaign news this year as the web becomes a key source of election news, say researchers at the  Pew Research Center for the People & the Press. Television remains the dominant source, but the percent who say they get most of their campaign news from the Internet has tripled since October 2004, up from 10 percent then to 33 percent now.

While use of the Web has seen considerable growth, the percentage of Americans relying on TV and newspapers for campaign news has remained relatively flat since 2004. In March, 26 percent of survey respondents cited the internet as a main source for election news, while the percentages citing television and newspapers remain largely unchanged. 

Not surprisingly, the Internet is a considerably more popular source for campaign news among younger Americans than older ones. Nearly three times as many people ages 18 to 29 mention the internet than mention newspapers as a main source of election news (49 percent for younger respondents, 17 percent for older respondents). 

Nearly the opposite is true among those over age 50: some 22 percent rely on the Internet for election news while 39 percent look to newspapers. Compared with 2004, use of the Internet for election news has increased across all age groups. Among the youngest cohort (age 18 to 29), TV has lost significant ground to the Internet. 

European Mobile Behavior Might Shift, Temporarily

Forrester Research analyst Pete Nuthall does not think economic stringency will dent
European mobile penetration rate of 84 percent. But he does predict there will be some reduced usage and spending. Purchases of more advanced handsets and services also might dip.

Mobile providers are responding to the anticipated changes by de-emphasizing mobile data services and expanding the variety of SIM-only offers.

Send and Receive Text Messages from Google Chat

At least some Gmail Chat users now can send text messages to buddies on their mobile phones using Gmail Chat. Recipients also can respond to those text messages just like they would respond to messages sent directly from a mobile phone, as well. As is typical for new feature introductions, the feature is being rolled out in phases, so not every Google Chat user has access to the feature right now.

Google appears to enable that function by providing a virtual phone number. The feature also works for mobiles responding from outside the United States, but the operation isn't quite so automated.

The ability to send a text message from a PC is not new. The ability to receive text message replies to a PC is.

To send text messages, users enter a contact name in the "Search or invite friends" box in "Chat," and select "Send SMS" from the box of options. If a chat window already is open for that contact, users just click "Video & more," and select "Send SMS."

If your contact replies, the text message response will appear as a reply in "Chat." These conversations are stored in your Chat history just like regular chats.

Age a Factor in New App Adoption

Just to confirm what you already know, a new study by ABI Research shows that, when it comes to viewing TV and video, growth in consumer markets is more limited by consumers’ ability to create new habits than by technology availability or ease of use. 

“The willingness to adopt new forms of entertainment delivery is in many cases determined by the age of the consumer,” says Steve Wilson, ABI Research principal analyst.  “That means that market growth is simply a matter of time.”

Still, there are some new changes. Game console penetration in the 18-to-25 year old segment showed no gain over last year, whereas penetration in the 65-or-over segment grew more than 200 percent.    

DVR ownership likewise is up uniformly across all age groups. On the other hand, some 65 percent of the respondents over 65 have never used VOD, compared to 30 percent of those in the 25 to 29 age range. However, 40 to 50 percent of those who have tried it continue use it at least once a month regardless of age. 

Internet downloading likewise is only really popular with consumers under 30. 

Video cell phone usage: consumers in their 30s are four times more likely to have watched video on their handset than those in their 50s.  The wealthy, willing to pay the extra costs, are much more likely to watch video on their handsets than the less affluent. 

Cincinnati Bell Revenue: Only 14% Consumer Voice

In some ways, the big story out of Cincinnati Bell in the third quarter was the progress the independent local exchange carrier has had in diversifying its revenue streams. In the third quarter of 2008, just 14 percent of its revenue was generated by consumer voice.

About 20 percent of the carrier's revenue was earned providing technology solutions including data center and managed services.

Wireless service revenue in the quarter was $74 million, up $6 million or nine percent from a year ago. Cincinnati Bell had 567,000 wireless customers at the end of the quarter, which reflected year-over-year growth of six percent in its post-paid wireless customer base.

Post-paid quarterly average revenue per user was $48.82, an increase of $1.41 year-over-year and $1.46 sequentially. Pre-paid ARPU was $26.33, up 15 percent from the third quarter of 2007 while prepaid subscribers declined eight percent.

Technology Solutions quarterly revenue was $73 million, down $1 million, or one percent from a year ago. Technology Solutions segment operating income of $6 million was up two percent from the prior year quarter.

Data center and managed services revenue was up 39 percent from the third quarter of 2007. But lower-margin equipment revenue declined $10 million or 19 percent from the prior year.

Year-over-year DSL subscriber growth was six percent. At the end of the quarter, Cincinnati Bell had a total of 231,000 DSL subscribers.

Quarterly wireline revenue was $201 million, down $1 million or one percent from the third quarter of 2007. Increased revenue from data services, long distance and expansion markets partially offset lower voice revenue in Cincinnati Bell's traditional service area.

Year-over-year total access line loss in the third quarter was 6.8 percent, reflecting a decline in the company's in-territory consumer access lines. Business lines were even with a year ago while expansion market access lines increased 14 percent.

iPhone Penetration Broadening Sharply

The trend can't be identified with any precision yet, but some end users might be adopting a new form of "substitutional" behavior of the sort mobility seems to be causing to wired phone lines.

Since June 2008 3G iPhone use rose 48 percent among those earning between $25,000 and $50,000 per year and by 46 percent among those earning between $25,000 and $75,000.

These growth rates are three times that of those earning more than $100,000 per year, the original "early adopter" population.

The reason it is not clear whether a new trend is emerging or not is that some of these users, perhaps most, are buying $200 subsidized phones, which puts the devices into a range many might be able and willing to pay for some other sort of smart phone.

And while the cost of a stand-alone, single-device and single-user account might be fairly hefty for users in the fast-growing income ranges, it is conceivable that many are on family or group plans of some sort that do not represent new monthly charges as much as $70 a month.

Still, there is a suggestion here that some users might be choosing to use use a single device for a music player, email device, voice and Internet access platform, possibly cannibalizing some amount of broadband access and wireline voice service in the process.

Mobile Usage Up

Over 54 percent of those surveyed said their mobile phone usage had increased by more than 25 percent over the last two years, and one in five respondents said it had increased by more than 50 percent, says Azuki Systems, Inc.
About 62 percent of respondents say they either own or will own a smart phone in the next 12 months.

ABI Lowers Mobile Handset Sales Forecast

ABI Research has revised its expectations for fourth quarter 2008 mobile handset sales to 7.5 percent growth from the 10.4 percent it earlier expected.

Call that the expected impact of tougher economic conditions.

Year over year annual growth is therefore likely to be between 10.5 percent and 11 percent, to close out the year at around 1.27 billion.

Handset sales grew 8.2 percent during the third quarter, year over year.

Expect to see aggressive marketing and promotional activities from operators and vendors alike as they strive to lure end-users to upgrade their handsets before the year’s end, ABI predicts.

Orange Gets 72% TV Growth

France Telecom has grown subscriber take-up by 72 percent over the last 12 months As of September 30, 2008 the Orange-branded service had 1.746 million subscribers compared with 1.017 million just 12 months earlier. 211,000 customers were signed in the third quarter of 2008.

Stats like that are one reason executives at Comcast see AT&T and Verizon as their primary competitors.

Negative Growth in Third Quarter, Commerce Dept. Reports

The Commerce Department has released its preliminary estimate of U.S. third quarter gross domestic product, showing a decline to -0.3 percent. If the fourth quarter follows suit, we will be safe in saying we officially have entered a recession.

Consumer spending fell by -3.1 percent. Business investment fell by -1.0 percent, final sales were down by -0.8 percent. Disposable income came in at -8.7 percent.

The odd thing is that despite the generally-tough tone since perhaps the summer of 2007, growth has been positive through the second quarter of 2008.

Hulu Finds Less is More

Hulu, the online video site, finds that when it comes to advertising, less is more. In contrast to the multiple-ad format used by broadcast TV, only one ad is shown during each segment break on Hulu.

In a customer survey commissioned by Hulu and conducted in July and August, 76 percent of nearly 18,000 respondents said that the site had the right amount of ads given the "no incremental cost to view" format, according to the New York Times.

Just over 17 percent said there was less advertising than they expected. The survey also found a 22 percent increase in advertiser message association and a 28 percent increase in intent to purchase among users.

There might be some "novelty" element driving the findings, so everyone will have to wait and see whether ad effectiveness of this sort continues, on Hulu and other sites that may choose the same format.

Only one finding remains consistently true: consumers tend to say they "hate ads." They also prefer getting free content and will tolerate ads if that is the price of getting the content at no additional charge.

Hulu has another advantage, however. The ads are short, and there is no way to zip past them, as would be the case if viewing on a digital video recorder.

$3 Trillion Global Service Provider Revenue is Forecast

Between now and 2013, a time when global communications service provider revenue will climb from $2 trillion to about $3 trillion, wireless is going to be a key factor.

Whatever else happens, mobility services in developing regions are going to play a big part in that growth.

In developed regions, pressure on landline voice revenues will be the challenge. In developed regions, service providers will have to create new services based on wireless and broadband, especially services that combine formerly-separate experiences such as voice, image, video, audio, text, presence, location independence and devices.

Nothing is certain, in that regard. History suggests that service providers, even those deemed to the most slow-moving, can replace their revenue mainstays. Wired telephone services providers, generally considered the slowest-moving contestants, already have twice done so.

They made a transition from "dial tone" to "long distance" as the revenue mainstay. Then they made a transition from "long distance to wireless." The next transition will be to replace wireless, as inconceivable that might seem. IP services are part of the answer. Video and content are parts of the answer. Software and information technology services are part of the answer. Personal broadband is part of the answer.

It remains unclear whether, in the next iteration of industry business models, there will be a single revenue source that clearly underpins all the others, even though this has been the classic model. The only thing that is clear is that, as important as wireless is, it also will someday fade as the key industry revenue driver.