Comcast to Use Smarter Phones to Enhance Wired Experience

Devices increasingly are key as service providers seek to add value to their wired and wireless experiences. "Compelling end user devices are definitely part of the story," says Chris Mairs, MetaSwitch CTO.

So it comes as no surprise that Comcast plans to roll out new cordless phones that add email and other Internet features, as Verizon is doing as well.

http://www.lightreading.com/document.asp?doc_id=174853&site=cdn

Conference Calls Really Do Need Live Blogging

Seth is right: conference sessions are more valuable--or can be, when a large call is in process--when there is a live blogging or chat function.

http://sethgodin.typepad.com/seths_blog/2009/04/reinventing-the-conference-call.html

More Signs of Prepaid Wireless Surge

MetroPCS added more than 1.5 milion gross customers in the first quarter of 2009, up 59 percent over the same point a year ago, and 684,000 customers after accounting for quarterly churn of five percent.

The growth suggests one thing: more wireless users are keeping their mobile service, but downgrading to prepaid plans. We can make a couple of observations: despite fears, wireless is now so embedded in user lives that it cannot be dispensed with.

On the other hand, there are ways to satisfy that need at lower cost, and consumers are taking that option.

Australia to build $31 Billion Fiber to Home Network

The Australian government is moving ahead with a $31 billion national broadband network that will operate on a structurally separated, wholesale-only basis, with all licensed retail providers able to buy and use the network. The network aims to connect 90 percent of Australian homes with service at speeds up to 100 Mbps. 

Every private company bid submitted in any earlier tender process earlier had been rejected by the Australian government as inadequate.

Instead, a public-private partnership will be commissioned to construct the network, with provatization planned for five years after network operations begin. But construction might take seven to eight years, so it will be some time before an privatization event occurs. 

The network would operate on a wholesale-only, open access basis, separating retail operations and allowing Optus, Telstra and other companies to build services into the system.

Telstra, though, will not be barred from applying to manage the wholesale network, once built. In some ways, the scrapping of the original plan might be positive for Telstra, which now will face for the first time a high-speed optical fiber network that virtually any other retail competitor can use. 

The upside is that although Telstra might not savor the new and more-competitive marketplace, it might be able to salvage a role as the wholesale operator, even as it has to compete as a retail provider buying access from the wholesale entity. 

There are other, shorter-term sub-plots as well. One is the mix of motives, from economic stimulation and job creation, that are blending with the concrete goal of creating a broadband platform; as well as the issue of how well the plan will work out in terms of end user pricing, which affects the ability to raise investment capital to build the network in the first place.

Still, the move potentially ends the stalemate that has prevented Australia from moving ahead on badly-needed broadband upgrades that have been stalled by inability of regulators and policymakers to come up with a solution acceptable to Telstra, the national incumbent. 

http://www.bloomberg.com/apps/news?pid=20601081&sid=aBA74wtO9nDc&refer=australia

IM Most Popular French Online Activity

French Internet users in February 2009 spent more time uisng instant messaging than any other application, including email. Instant messaging claimed the highest share of total time spent at 14.3 percent, followed by social networking at 5.7 percent, say comScofre.  In combination, the two categories accounted for one out of every five minutes spent online during the month. 

Online entertainment accounted for 8.6 percent of time spent and online gaming 2.9 percent share of total time spent online. 

http://www.comscore.com/press/release.asp?press=2763

Wireless "Net Neutrality" Will Lead to Higher Prices

There's a sort of inescapable logic to what wireless network access providers will do if or when mobile VoIP applications are freely enabled, as some policy proponents advocate. Since the entire business model rests on voice revenues, the loss of those revenues will be compensated for in the form of higher mobile broadband access prices.

Existing best-effort plans might be the baseline. But new plans optimized for voice, or conferencing, or other applications, might well emerge. Of course, optimizing might violate some notions of "net neutrality," unless optimizing is available to any provider of voice over a mobile IP network, in which case it might not be a neutrality violation.

But those optimizing services will be an add-on.

You might argue providers can create replacement revenues some other way: selling content or advertising, for example. But the numbers don't work. Build your own spreadsheet and you'll figure that out. There is no conceivable new revenue stream that replaces voice revenues "one for one."

After some years of watching what happens in a robust, mandatory wholesale environment, even European regulators are starting to see what happens. Service providers start spending their money outside the home market, where financial returns are higher.

Investors aren't dumb. Businesses with low growth and margin prospects get less investment than competing alternatives promising a higher return. The current capital stringency is bad enough. Wait until you see a capital strike.

http://www.eweek.com/c/a/Mobile-and-Wireless/Skypes-iPhone-App-May-Force-FCC-Hand-on-Wireless-Net-Neutrality-527564/?kc=rss

Enterprise Twitter is Coming, Gartner Says

Analysts at Gartner predict that micro-blogging tools such as Twitter will be widely available in enterprise versions, and will be used in four ways.

Firms will use Twitter as a marketing or public relations channel, using them as part of wider corporate communications strategies such as corporate blogs.

Firms will tweet about corporate accomplishments, provide links to press releases or promotional Web sites, and respond to other tweets about the brand. Inevitably, some firms will "overreach" and publish uninteresting or obviously self-serving tweets.

Employees also will use Twitter or other micro-blogging applications to enhance and extend their personal reputations, thereby enhancing the company's reputation, Gartner says. Employees will enhance their personal reputations by attracting followers who go on to read their blogs.

As people enhance their personal brands, some of this inevitably rubs off on their employers, says Gartner.

Employees use the platform to communicate about what they are doing, projects they are working on and ideas that occur to them, though Gartner does not recommend this, for security reasons.

Inbound signaling also will be a value for firms, which will find micro-blogging posts a rich source of information about what customers, competitors and others are saying about a company.

http://www.gartner.com/it/page.jsp?id=920813

Communications Still Trumps Entertainment

Getting ready for an upcoming presentation, I've been thinking about the relative value of entertainment services, as compared to voice and data applications.

As important as video is for a telecom provider's business case, as well as its foundational role for satellite and cable companies, my thinking has been that voice and data apps of various sorts have been, and likely will be, more important for firms with roots in the telecom business.

Part of the argument rests on profit margin. Cable and satellite providers can assume they will have high margins. Attackers tend to find more-modest margins, in part because of scale economies that favor providers with high penetration.

Telecom providers tend to see higher margins on voice and data services.

Revenue opportunity also plays a part. The voice and data business simply is far larger than the video entertainment business. Depending on how one categorizes the business, the voice and data service business is twice to three times bigger than video services business.

With the advent of Web and IP-based communications, including email, text messaging, instant messaging and "non-traditional" communication modes such as micro-blogging, blogging, I'd argue the centrality of "communications" has grown, even for activities that might arguably be considered "media" or "content."

Consider that social networking among U.S. broadband users has grown 93 percent since 2006, and has increased the amount of time people spend  communicating online 18 percent, to 32 percent of total online time, according to Netpop Research.

As online communications has increased, the time spent on traditional forms of online entertainment has declined 29 percent, and is now down to 19 percent of total online time.

Video is important; just not as important as voice and data. Communications remains more important than entertainment, at least for firms with a telecom rather than entertainment orientation.

http://www.marketingcharts.com/interactive/social-networking-grows-93-communication-becomes-entertainment-8576/netpop-social-networking-time-spent-communicating-entertainment-online-2009jpg/

Bandwidth is YouTube's Main Cost Driver

YouTube still hasn't figured out a sustainable business model. Ad revenue is the objective, but

most of YouTube's content remains outside the category of "inventory."  Credit Suisse analysts estimate that YouTube will bring in about $240 million in revenue in 2009, mostly provided by home page  placement ads and in-video overlays and adjacencies.

Credit Suisse estimates that YouTube generates approximately $86.7 million a year on homepage placement ads, or about $7 million per month.

In-video ads and banner adjancencies contribute another $87 million, according to the analyst estimates. Sponsored videos ($37.1 million) and sponsored links ($30.1 million) also contribute to YouTube's revenues.

On the cost side, Credit Suisse estimates that Google spends $711 million in operating expenses related to YouTube. Those costs include bandwidth, content acquisition, partner revenue shares, site overhead, and storage.

The biggest expense for YouTube is bandwidth, as you might guess, as YouTube streams about five million videos a month. That costs YouTube about  $360 million a year, or $1 million a day. Keep in mind that observers believe Google pays about half the the lowest "market" rate for

bandwidth.

And Google gradually is assuming some roles more analogous to a traditional network. Credit Suisse estimates that YouTube will pay $260 million in content acquisition costs in 2009.

And despite the estimation that YouTube buys its bandwidth at discounts as high as 50 percent of the lowest "market rates," bandwidth still is the biggest sunk cost.

General overhead represents about $24 million worth of 2009 cost. Storage costs $12.7 million a year.

http://seekingalpha.com/article/129505-google-may-lose-big-on-youtube-in-2009?source=feed

Media at the Tipping Point

IP doesn't just reshape the telecommunications, video entertainment and advertising businesses. It reshapes the rest of the media as well. This trend has been underway for decades, but the tipping point has been reached.

http://247wallst.com/2009/03/24/ten-major-newspapers-that-will-fold-or-go-digital-an-update/

Trade Show Blues

As somebody who spends lots of time at industry trade shows, I'd have to say the temporary economy-induced decline in attendance at virtually all major industry meetings is not the biggest problem. There's less real news or value at these venues than there used to be, in part because information moves with the speed of Twitter and the Web.

That doesn't mean these venues are not important for some attendees. They're still valuable for sales people meeting with prospects in suites, away from the sessions and exhibits. But trade shows now seem to be less mission critical for lots of participants in the ecosystem, if only because the industry is developing other ways of replicating the marketplace functions trade shows and industry media once were a larger part of.

Webinars, podcasts, Web conferences, user group meetings, channel partners, Google and Twitter, Real Simple Syndication, blogs, wikis, even email and YouTube, are rival conversation channels.

Attendance likely will pick up again once the recession is over. But I have greater doubts that the value and effectiveness of the bigger industry meetings will improve.

That doesn't mean all "live meetings" are in this bucket. The more-specialized meetings provide more value, at least from my perspective. A few new or emerging venues have "buzz." EComm stands out in that regard.

But it is the "user group" venues that have, over the last couple of years, started to assume more importance, at least from my perspective. The Voice Peering Forum and MetaSwitch Forum, for example, have been quite useful.

So I've been spending much more time at user group meetings. That's where service and application providers are most concentrated and most easy to engage in conversation. That, after all, is why many of us attend such meetings.

http://www.pcworld.com/article/162551/top_10_signs_of_the_economic_slump_at_ctia.html?tk=rss_main

Grudging Embrace of Skype, Other IP Providers is Rational, If Maddening

Major U.S. carriers haven't been happy about the emergence of Skype and other third-party VOIP clients, which threaten to undermine the global industry revenue model.

One can hardly blame them for not rapidly embracing new technology that threatens to bankrupt them, anymore than politicians will embrace being voted out of office by more attractive candidates, labor unions will embrace automation or outsourcing,  accountants and attorneys will get excited about really-simple tax codes or Microsoft is happy about effective and free operating systems and business productivity suites.

Nor can one blame VoIP enthusiasts, application providers or users for wanting VoIP to work on whatever devices they typically use.

As VoIP gets better and better, more and more users are going to conclude tha all they really need from their service provider is good broadband. Someday, service providers will have weaned themselves off a reliance on voice revenues and found other business models that work as well, or better. In the interim, service providers will not move any faster than they have to.

So disputes are going to keep occurring.

The Free Press has asked the Federal Communications Commission to investigate whether or not the restriction of Skype use on AT&T Apple iPhones, except when in Wi-Fi access mode, is in violation of federal law.

The Voice on the Net coalition Europe, which includes Google, Microsoftand Intel, has asked European telecom regulators to ban blocking of VoIP apps on 3G networks an devices. T-Mobile Deutschland blocks use of Skype application on the iPhone, for example.

AT&T allows use of Skype when users are connected to Wi-Fi, rather than the 3G wireless broadband network. That's AT&T's way of not prohibiting use of the applications, but also not encouraging them to replace voice directly. Inability to control network quality sometimes is invoked as the reason for not encouraging Skype or over-the-top VoIP over the existing network.

Someday that will change. At some point all networks will be IP-only. For wireless providers, that generally coincides with the arrival of fourth-generation networks. For wired network providers, a switch to all-fiber or high-bandwidth digital subscriber line access (plus robust wholesale regulations) typically is the driver.

But so long as the entire network is supported by legacy voice, services providers are not going to encourage IP-based voice any more than they have to. Do you know any executives, at any company, in any industry, willing to put themselves out of business as fast as possible by enabling customers to avoid buying their products?

http://blogs.computerworld.com/skype_for_iphone_doesnt_bode_well_for_at_t_telcos

Google Trying to Buy Twitter?

Like it or not, Google seems to be the most-logical buyer. One can argue that Google could write an app that replicates Twitter.

But that's only part of the value Twitter, as opposed to any other micro-blogging and real-time search app anybody might produce.

Twitter has gone viral. It has mindshare. People like it and use it.  Sometimes that trumps every other consideration.

A sale to Google alleviates the need to  "find a business model." Google already has one.

And if one assumes Twitter always has been an acquisition candidate (for most firms the "going public" exit does not presently exist), then Google simply is the most-logical buyer. The value Twitter provides is congruent with the value other Google tools provide.

http://www.techcrunch.com/2009/04/02/sources-google-in-late-stage-talks-to-buy-twitter/

Random VoiceCon Observations

Here's a set of fairly random observations from VoiceCon, ranging from "slow" return on IP telephony to "no return," as well as the usual cautions about buyer resistance. Joe Abate, Mounrt Kisco Medical Group director of IS says " I don’t think we’ve seen any productivity gains at all after deploying IP telephony. Ouch!

Conrad Cross, City of Orlando CIO, says he "expects the return on investment on the city's TDM-to-IP migration to take four to five years. Three years or less is what most buyers probably would want to see. Small businesses won't even be willing to wait that long, I'd guess.

But Gary Grissum, BNSF Railway VP Telecom, estimates that 40 percent of his company's workforce will retire in next few years, and unified communications might be a way to attract a new generation of workers. That's a big deal. Some of us have argued we need to see a change of buyer influences (younger, in other words) before we can really assess how far technology buyers are willing to shift their preferences.

Overheard a VAR mention that the problem with selling unified communications to smaller businesses is that they don't see the benefits, forget about the price. I'd say that has emerged over the last year or so as a key impediment. Buyers in the small business segment discount all "soft" gains such as productivity, less wasted time and unified message boxes. Really, you have to show them how they save money--hard dollars--right away.

Kevin Gavin at ShoreTel points out that the tough economy is focusing IP PBX buyers on return on investement, even more than typically is the case. Duh! Customers demand very-clear ROI before buying.

Wells Fargo to Replace 50% of Desk Phones

Karen Bailey, Wells Fargo director of voice services, says her firm plans to replace 50 percent of employee desk phones with soft clients and mobile phones.