Friday, July 29, 2011

Telcos invested $8 billion in cloud in first half of 2011

Communication service providers committed almost $8 billion to cloud-related pursuits in the first six months of 2011, but recent acquisitions won’t boost cloud revenues overnight and service differentiation remains poor, according to Informa Telecoms & Media. That finding is not terribly surprising, given the relative newness of the business and the cost of investing in facilities.

Informa estimates that the typical provider generates less than five percent of its enterprise revenues from annuity cloud services. That sounds like a small amount, but can be quite significant for a large provider. Some might point out that text messaging revenue only accounts for about five percent of Verizon Wireless revenue, but it is a quite-important revenue source.

Of the 10 acquisitions and 21 investments announced in the first half of 2011, 80 percent involved data centers. Using a five-year return on invested capital rule of thumb, the invested $8 billion implies annual expected revenue of $1.6 billion. Of course, one also expects some amount of over-investment at this stage of business growth, so many would not be surprised if those projections for annualized revenue fall short.

By itself, cloud computing services might not be big enough to justify so much effort. But as part of a wider effort to expose network features to business partners, the provision of cloud facilities and software is seen as important. Few firms the size of AT&T or Verizon will waste time on new revenue initiatives that do not promise at least a $1 billion annual revenue stream. Right now, it isn't so clear that will be the case, for either firm, in the near term, and perhaps not even in the medium term.

But a reasonable argument can be made that revenues from additional products built on top of that platform, plus the cloud hosting services, will amount to new revenue of the threshold magnitude.

U.S. Consumer Interest In Mobile Payments Still Low

Recent surveys by Forrester Research show that U.S. consumer interest in mobile payments is low.

Less than six percent of U.S. online adults have ever used any type of mobile payment.

Over the past three years, Forrester has seen interest in mobile payments continue to grow slowly, though, up from 11 percent of survey respondents in 2008 to 18 percent in 2010.

Sprint Shares Take Tumble; Strategy or Churn the Reason?

Sprint's shares on July 28, 2011 suffered their biggest intraday drop since 2008 as its second quarter results missed analyst forecasts, and an unclear 4G strategy, despite firm news of a deal with LightSquared that at least clarifies part of Sprint's Long Term Evolution approach. It isn't entirely clear whether the drop was caused by investor concerns about ongoing churn, or uncertainty about Sprint's long-term strategy.

The future of its relationship with Clearwire, though, remains unsettled. The deal with LightSquared is tactically helpful, assuming LightSquared can mollify the GPS community about interference issues. That is one major issue, but there are others, including the loss of about half its potential spectrum if LightSquared has to avoid using the "L" band frequencies where GPS interference issues exist.

Longer term, some will have questions about the viability of a wholesale-only strategy, as well as ability to raise the rest of the capital needed to finish the full LightSquared network.

Never wait on hold again with the FastCustomer app

FastCustomer, an iPhone and Android app, claims to have saved its users 220,000 minutes they otherwise would have spent "on hold." FastCustomer will call any company’s call center or any department and wait on hold for you. The app saves you time and eliminates the need to listen to elevator music

On the free iPhone or Android app, just tap a button telling the app which company you need to reach, then go back to living your life.

Does Apple Want to Buy Barnes & Noble?

Are Apple executives weighing a possible bid to buy Barnes & Noble? That's the rumor reported to Boy Genius Report by an as yet "unproven" source.

Apple presumably then would fold the Barnes & Noble digital library of books and publication into Apple’s own iBooks store.

Apple would have no use for the Nook, and that would likely be discontinued in this scenario. Apple could then convert some of the brick and mortar Barnes & Noble stores into Apple stores and close the rest. Apple easily can afford the transaction.

Some of us would lament the loss of the retail bookstores, or the possible demise of the Nook. Along with Amazon's coming Android tablet, the Nook has seemed to some the best chance for a branded Android tablet to create a niche in the tablet market that actually answers the question of "why buy it instead of an iPad?"

How to Search Google+

Google Plus SearchSooner or later, you will want to search Google+, perhaps to find a profile, or conduct a keyword search on a topic. Go ahead, do it. Oh, you say, there's no search box.

For some reason there’s no convenient way to search your Google stream. But you can go directly to http://googleplussearch.chromefans.org/ and conduct the search there.

Thursday, July 28, 2011

Study: Execs Aren't Yet Sure What to do About Social Media

More than half of 302 executives surveyed by Harris Interactive on behalf of Capgemini say that social media is a part of their company's customer care operations, but 64 percent of those said that the marketing department is solely responsible for social media marketing. Most (74 percent) executives in the study were simply unsure how many employees are dedicated to customer care using the social Web.

Most (57 percent) see social media as a means for "inviting customer input on product and services, lead generation, responding to complaints, internal reporting, and measuring customer satisfaction."

However, there's still a sizable minority (13 percent) that believe social media is just a fad and is not important to their company's success.


Verizon Wireless to Pay $10 Billion Dividend

Some of us might see an important implication in the Verizon Wireless decision to distribute $10 billion to its two owners, Verizon Communications and Vodafone. And that observation is that Verizon needs the cash to help pay dividends, because Verizon does not any longer generate the cash to pay its own common dividend, said Craig Moffett, Sanford C. Bernstein & Co. analyst.

'There simply isn't any cash elsewhere in the business to fund the common dividend,' Bernstein said. A rational person might conclude that, over the longer term, something has to change. Either Verizon lowers its dividend, which most would assume is the last thing Verizon would do, or Verizon Communications has to find some way to boost its revenues and profits to maintain the dividend. There might be other short-term expedients, such as asset sales, but that can only go so far.

The other implication is that observers who believe Verizon easily can afford to invest in its fixed line infrastructure increasingly may find that view hard to support, over the long term. A firm that no longer can generate enough internal cash to pay its historic dividend has a problem. Big new investments will require some reasonable expectation of adequate financial return.

To be sure, Verizon Communications reported encouraging results for its second quarter, especially a near return to wireline segment growth. But keep in mind that Verizon is trying to return to a slightly-positive revenue growth position in its fixed-line business.

PayPal Says it Will Be Agnostic About Payments, Zong Purchase Proves It

PayPal executives have been pretty clear that they are going to be "agnostic" about the ways mobile phones can communicate with payment terminals, and eBay, PayPal owner, has "put its money where its mouth is" by buying Zong, which provides carrier billing, with some 250 carriers globally.

"Death by PowerPoint" and Other Similar Afflictions

"Trying to sound really smart is really, really dumb," argues Marcus Schaller, a content marketing strategist, speaker and author of "The Lead Ladder-Turn Strangers into Clients, One Step at a Time." His basic point is that simple, clear language is important.

"You see it every day; puffed up blog posts, white papers, webinars and website copy full of important sounding jargon," he says. "The less of it you understand, the more important it must be."

Corporate/Marketing Speak is a relic of the days before Google and RSS feeds, a time when information wasn’t at everyone’s fingertips. A white paper in 1998 didn’t have to compete with the same avalanche of information as the white paper of 2011. So be clear, he argues.

There's a similar analogy, less about jargon and more about "parading knowledge," though. Most of us attend conferences and trade shows. That means most of us sit through PowerPoint presentations. If you take a survey of conference attendees, you will almost always find that most people think most presentations are unhelpful to some extent, overly-long in most cases and "not so good" all too often.

At the suggestion of a friend, I read "15 minutes, plus Q&A" earlier this year, written by Joey Asher. Basically, the argument is that the reason so many PowerPoint presentations are less effective than they might be is that we all have a tendency to use such occasions to parade our knowledge, and that typically is not helpful for communicating the couple to several points that really can be made in 15 minutes.

So we wander around, "dumping data" instead of reinforcing the couple of important messages we should be trying to communicate. That, of course, assumes the agenda really is to communicate, rather than genuinely obscure matters. There might well be times when the actual intent is to get through a presentation essentially "saying nothing," for some valid business or political reason.

But clarity, in all content, is only partly a matter of communication skill. It also is the result of discipline; the willingness to exclude extraneous material that might impress, but fails to help get across the few points one really wanted to make in a short time.

There are reasons for some of the "wandering around," of course. For presenters at many meetings, the whole reason a person is allowed to attend is to make a marketing pitch for whatever it is that the company sells. Whatever the conference organizer or the audience might prefer, the speaker's job is to make the pitch. In other cases, demonstrating competency is "the pitch." Lawyers and consultants, as well as anybody else selling an intangible product, has to provide some "proxy" for skill which, by definition, is intangible.

If you wonder why attorneys have nice offices and furniture, it is to provide some "proxy" for skill, which a buyer cannot assess accurately. Educational credentials are proxies; so are awards; frequent speaking engagements and so forth. Still, the temptation to parade knowledge can get in the way of a clear, focused, on target talk, speech or presentation that makes one to several points very well.

"15 minutes, including Q&A" is a useful antidote to "death by PowerPoint."

The growing mobile payment divide

"Mobile payments and the mobile wallet are turning out to be completely different things," says David Schropfer, consultant and author of "The SmartPhone Wallet."

The mobile wallet, which allows a user to store and access a number of accounts and credit cards linked to loyalty programs and offers, all from a mobile device, is developing in the U.S. mainly as a way to attract consumers with plenty of other payment options. "I don't think there will be much market adoption of the mobile wallet without it being attached to other options."

In the developing world, the focus is more directly on enabling people to send money to each other, and other institutions, directly from a mobile phone, because the banking infrastructure is undeveloped.

Mobile payment analyst Bruce Burke argues that a variety of "front ends" will develop, using multiple brand ecosystems, devices and mobile service providers, typically using established transactions networks.

Global mobile revenues will be $1.1 Trillion in 2012

Wireless Intelligence now forecasts that global wireless service provider revenue will hit $1.1 trillion in 2012. Why is that significant? Over the last decade, global fixed-line revenue was about $1 trillion. So the new forecast suggests that mobile service revenue will surpass fixed-line revenue on a global basis by 2012, if not before. Global mobile revenues will be $1.1 Trillion in 2012

It long has been the case that mobile revenues have outstripped fixed-line revenue in developed markets.

What is new is that revenue in developing markets, the new global revenue engine of growth, also will shift to wireless. As recently as 2007, wireline revenues still were more than 50 percent of total industry revenues.

http://ipcarrier.blogspot.com/2010/01/how-will-global-telecom-revenue-sources.html 


Verizon Tops Customer Care Rankings in Latest JD Power Survey

Press Release Figure
The latest JD Power survey of customer service performance shows that Verizon Wireless is now at the top of the mobile service provider rankings. Verizon Wireless scored a 770 (out of a total 1,000 points) which was the highest score in “JD Power & Associates 2011 Wireless Customer Care Performance Study – Volume 2″.

Until the announcement of the T-Mobile AT&T merger, the top spot in the Wirelss Customer Care Performance Study was T-Mobile USA. The last survey before the latest survey had Sprint at the top.

Verizon Tops JD Power Rankings for Customer Care

That doesn't necessarily mean mobile or other service providers generally score all that well in broader surveys of customer satisfaction. See http://ipcarrier.blogspot.com/2011/04/service-providers-do-not-rank-high-on.html.

Typically, service providers score in the middle of the pack, across industry verticals. 

Android Now Controls 39% Of The U.S. Smart Phone Market

Nielsen smartphone market share for the U.S. Q2 2011Android now owns 39 percent of the smart phone market in the U.S. up three percent from the previous period measured by Nielsen. Apple controls 28 percent, which is up two percent from the prior quarter.

Research in Motion is at 20 percent, down by three percent. Microsoft's combined mobile OS share is at nine percent, which is down seven percent.


Sprint Nextel and LightSquared Announce Spectrum Hosting and Network Services Agreement | Business Wire

LightSquared, now building a new wholesale-only Long Term Evolution network, has signed a 15-year deal with Sprint that expedites LightSquared's construction timetable by allowing it to co-locate on existing Sprint towers. The deal also will save LightSquared a significant amount of capital investment as well.

Under the agreement, LightSquared will pay Sprint to deploy and operate a nationwide LTE network that hosts L-Band spectrum licensed to or available to LightSquared. Also, for the first 11 years, LightSquared will make payments to Sprint of approximately $9 billion in cash for spectrum hosting and network services, as well as LTE and satellite purchase credits Sprint can use which are currently estimated to be valued at approximately $4.5 billion.

The agreement also provides Sprint the opportunity to purchase up to 50 percent of LightSquared’s expected L-Band 4G capacity. The wholesale purchase credits will provide Sprint the option to obtain lower cost wholesale access to LTE capacity by offsetting Sprint’s purchases of 4G capacity from LightSquared, should Sprint elect to incorporate the L-Band LTE capability as part of its 4G offering. Virtually all observers believe Sprint will do so.

This agreement is expected to lower network capital and operating expenses for LightSquared by more than $13 billion over the next eight years in comparison with the cost of a stand-alone network build. LightSquared expects the deployment of the nationwide 4G-LTE network to be completed more than one year ahead of the Federal Communications Commission (FCC) mandate to cover 260 million Americans by 2015.

LightSquared has also entered into a 3G nationwide roaming agreement with Sprint. With access to Sprint’s 3G nationwide network, LightSquared’s wholesale customers will be able to offer combined 4G/3G data services as soon as LightSquared launches its first 4G markets in 2012. That typically is an important capability, as there will be locations where the 4G signal, for any number of reasons, is not available. Though users will default to the 3G network, coverage will be significantly enhanced.

The move does not mean Sprint is abandoning its WiMAX 4G network or services, only that it also is adding LTE capabilities in a significant way. That is expected to be important as it will allow Sprint to take advantage of LTE economies of scale in the handset area. Given the universal switch to LTE by the world's GSM carriers, handset manufacturers will have much more incentive to innovate in the LTE handset area, compared to the more-limited WiMAX space.

No Supplier Likes Customer Concentration, But Sometimes It Cannot be Helped

Customer concentration in the hyperscaler segment is practically unavoidable, when a handful of customers represent such a large percentage...