BroadSoft Targets Mobility, Web

BroadSoft has announced compliance with the 3GPP Multimedia Telephony standard and launched BroadSoft Xtended, an initiative to open its functionality to makers of Web-based and productivity applications. At the same time, BroadSoft has created at developer program

The trio of moves might be viewed in several ways. Most significantly they reflect BroadSoft's belief that the next wave of growth will come from mobile applications and integration of core communications capabilities with all manner of Web and enterprise applications.

At some level the moves also signal that the significance of hosted communications is not limited to replacing legacy Centrex or phone systems, but is part of a larger move towards more sophisticated communications capabilities for many, if not most, Web and enterprise applications.

It's a tough market to quantify, but looking at the size of unified communications services is a part of the whole picture. Ultimately, some communications service revenue will shift from existing categories to "Web enabled" categories.

Beyond that, some of the value will be intangible, such as "stickiness" leading to lower churn or higher ad revenues. Over the near term, unified communications "revenue" will be hard enough to quantify. Web-based rich communications will be even tougher.

"The full-blown developers program and an online marketplace will enable service providers and end users to download applications that integrate BroadWorks with a wide range of productivity, personal, and social applications," says Joe McGarvey, Current Analysis principal analyst.

While the transformation of services to IP presents opportunity for BroadSoft, it also creates challenges. While the company is well-recognized as a leading provider of enhanced VoIP applications, its application suite is also considered by some service providers to be overkill for residential services, says McGarvey.

At the low end of the application server market, BroadSoft faces significant challenges from traditional telecommunications equipment makers, e.g., Alcatel-Lucent, Thomson/Cirpack, MetaSwitch and Sonus.

McGarvey says it will be important for BroadSoft to capture the middle ground of the application server market, where service providers are looking for some enhanced features but do not require the complexity of applications associated with PBX replacement.

To be successful in this space, BroadSoft needs to move down the complexity curve than it is for challengers to move up, McGarvey says.

To be sure, BroadSoft now finds itself challenged by a new set of competitors, including softswitch providers, which have been gradually increasing the breadth and sophistication of their Class 5 application offerings.

Ultimately, market success might not be as dependent on unique features as on ability to make those features available widely on mobile, Web and enterprise applications.

T-Mobile and Sprint: A Transformative Acquisition

If T-Mobile USA parent Deutsche Telekom does decide to attempt an acquistion of Sprint Nextel, and if that bid were to succeed, T-Mobile would emerge as the largest U.S. mobile provider by quite some measure.

Up to this point AT&T, Verizon Wireless and Sprint Nextel have held roughly equal shares of the market, and all three have had more than twice the market share of T-Mobile.

There are many regulatory, technical and even psychological issues to surmount, though.

Consider that T-Mobile and Sprint now operate three classic mobile air interfaces. Xohm will create a fourth. And then there's Long Term Evolution. Complexity means cost, and that's t0o many different networks to continue operating.

Still, Sprint's low stock price and strong Euro have to be driving some hard thinking about the feasibility of pulling such a merger together. Regulatory or other concerns might ultimately deter making of an offer, or scuttle a merger attempt.

But it would be a transformative move for T-Mobile.

VOD: First You Have to Find It

Before any form of on-demand media can be watched or purchased, it has to be found. That's been a growing issue even for linear media as channel counts have risen over the last two decades, not to mention user-generated video found only on the Web, or the growing range of on-demand video options.

In a parallel but almost-perfect metaphor, paper "viewing guides" have become dysfunctional. Even in the walled garden, linear programming, one screen world, there's just too much information, and too many choices, to display. And that means content isn't found.

Those of you who use the Netflix or Blockbuster DVD rental services, or simply try to find something to watch online, will understand the greater problems beyond linear-formatted TV. Search engines are helpful to the extent of locating pieces of content.

But trailers, sampling mechanisms, user recommendationsand recommendation engines and other sorts of processes are about the only way people can discover content they might enjoy.

Even in the walled garden, linear viewing world there are new efforts to aid the discovery process. ReelzChannel is a "media highlights" channel showing movie and TV clips, commentary and content-focused news.

The channel's research suggests its viewers purchase 24 percent more pay-per-view titles than non-viewers.

Also, in a recent study, 76 percent of users said they found out about a movie they had never heard of by watching the channel. About 21 percent watched a movie on premium services because of something they had seen on ReelzChannel. Another 16 percent ordered video-on-demand or pay-per-view titles, the company says.

Some 87 percent of those polled say ReelzChannel's “What2Watch“ promos were helpful when making a viewing decision.

Dead Company Watch

Azaire Networks, which sold a fixed mobile convergence security gateway product, has gone out of business, iLocus says. IPXstream/IPtelephony.org, a content and newsletter provider, also has gone under.

There always are periods of consolidation after big investment waves, and we are at the front of a winnowing process that already has claimed Pulvermedia and Verso.

Similar contraction cycles hit venture-funded CLEC and Internet firms between 2001 and 2003. Now it is VoIP's turn.

The next cycle, which will not begin for some time, is a similar weeding process for consumer-focused video start-ups.

O2 to Blanket UK with Broadband

O2 will extend its broadband coverage to the whole of the United Kingdom using BT's wholesale broadband network. O2 also seems to have earmarked a sizable amount--£6m (€7.7m)--to grab new customers.

O2 can do so because BT has created a separate business unit that sells wholesale broadband access to any retailer that wants to use it. The U.S. policy framework took a different route, and relies on vigorous competition between the local cable and telephone companies.

One might argue we'd see faster uptake, but less innovation using the functional separation model. Conversely, slower diffusion but more differentiation using the U.S. model. There are different benefits.

After a slower start, it looks as though access speeds and "price per megabit" propositions, plus managed services wrapped around the access, are finally starting to get interesting in the U.S. market.

Mobile TV: It Isn't About the Small Screen

Some observers might argue that most mobile users do not really want to watch TV on their handsets all that badly. Others might argue they'd like to, but the small screen or shortened battery life are barriers. Some would say the logical use is short form video to fill interstitial time, not long-form content or TV shows. Others will say people don't want to pay as much as carriers now charge.

All these objections have some merit. But what might be most significant is the limited amount of linear content people can get.

AT&T's new video service will deliver 10 television channels for a fee of $15 a month.

AT&T Mobile TV will be available in 58 markets including Atlanta, Chicago, Los Angeles and New York.

Two handsets are available immediately, the LG Vu, which sells for $299.99, and the Samsung Access, which sells for $199.99.

Observers often note that a typical TV viewer only watches about seven channels. The problem is that every person uses a different mix of seven channels. And that's the issue for AT&T and Verizon.

AT&T Mobile TV delivers CBS Mobile, Comedy Central, ESPN Mobile TV, Fox Mobile, MTV, NBC 2Go, NBC News 2Go, Nickelodeon, Sony Pictures and CNN Mobile Live.

As long as those channels cover enough of your seven favorites, you're going to be interested. If that list does not contain at least one of your favorites, you won't be that interested. And then any rational buyer is going to do a "cost per channel" analysis to figure out whether buying the mobile TV service makes sense.

And the end of the day, all the other objections likely can be overcome. The basic objection, though, is that people will want access to their favorite channels. That value proposition makes sense to 96 percent of all households.

What people won't want is to pay for is channels they don't really watch. Cable TV succeeded because it gave consumers more choice. Mobile TV today is lagging precisely because it doesn't provide enough choice.

Nokia, T-Mobile Enhance Mobile Web

Nokia and T-Mobile have signed a deal that has Nokia supplyng T-Mobile with phones especially tailored to provide easy access to T-Mobile’s “web’n’walk” internet service and Nokia’s mobile portal Ovi.

The two companies also saythey will work on making social network sites more mobile, and will cooperate on creating mobile widgets to create a “richer” user experience for T-Mobile’s web’n’walk service.

A couple of angles: Nokia supports its own content portal; T-Mobile, despite that possible conflict, needs Nokia to optimize handsets for web'n'walk. That's co-opetition, to be sure: competing and collaborating all at the same time.

Facebook Apps Skew Towards "Just for Fun"

Enterprise IT managers generally consider Facebook a huge time waster. They might be right. Most of the applications created for Facebook so far are of the playful sort, with no direct business application.

Still, there's more than a smattering of tools that can have business application, beyond the ability to create business-focused social groups.

There are more than a thousand apps self-described as business tools, and many of the others might be used in a business way.

Sure, it's a non-guided, messy process. But that's pretty much the way innovation is going to happen in any case.

It's just a process of discovery.

Lots of business-focused people are trying to figure out how to apply social networking in an enterprise context, so there is a clear sense that this is not all about "fun and games," even if that's where most of the apps are.

Dumb Pipe Isn't a Bad Thing

The unique contribution any communications network plays in a value chain is precisely the "pipe."

That doesn't mean "just" pipe, but connectivity is fundamentally important. Consider a Strategy Analytics forecast of global consumer and advertiser spend on mobile media and associated transport.

Strategy Analytics predicts mobile media spending will rise from just under $47 billion at the end of 2007 to almost $102 billion by 2012, driven by access to web services, video and music.

But note the contribution made by "data transport," which is the "dumb pipe" part of the business. Premium services are important, no doubt. But access is far from unimportant.

Over the same period the population of unique cellular users actively using mobile content services will more than double from 406 million to over 870 million.

What About Wal-Mart?

One issue the studios are going to have to grapple with, as they go with "date and date" release of DVD and video-on-demand movie content, is channel conflict. Specifically, Wal-Mart sells about 40 percent of all DVDs. Target sells about 15 percent. Add in Best Buy and you probably have half the market for retail DVD sales.

Those three mass market retailers won't be happy if DVD sales, used as loss leaders to drive shopper traffic, start to dwindle. Surely studio executives are thinking about this problem. Ultimately, they'll want to come up with some sort of kiosk operation allowing buyers to sideload rental or sale content directly to their iPods.

You'd think USB flash drives might do the trick. The issue will be the cost of storage required to hold a two-hour HDTV movie. And then there's the issue of moving that content directly to the TV for viewing.

The studios will figure this out, or somebody will help them figure it out. The studios won't want to make a key channel partner too angry.

Video Substitution Coming

In the movie content market, all revenue streams beyond theatrical showings basically are substitutional: money made in the DVD segment tends to displace revenue that might have been earned in the pay TV or broadcast TV segments, for example.

With the recent movement towards "day and date" release of movie content to DVD channels as well as video on demand, one should logically expect some revenue to shift from the DVD channel to the VOD channel.

But there's a difference in the "quality" of the revenue, from a studio standpoint. Studios make 60 to 70 percent profit margins on downloaded or streamed content; only 20 to 30 percent on DVDs.

Aggregate consumer spending might not change all that much, but studios might make more money. That is the only reason they'd even agree to a different "day and date" scheme.

Apple Gets Earlier Access to Movies

All you need to know about where money gets made in the movie business are the three letters "DVD."

Studios make 14 percent or less from theatrical showings and about half their revenue from DVD rentals and sales. Less than 10 percent is earned from all cable, satellite and telco payments, including content shown as premium channels such as HBO and video on demand.

DVD is where the money is, and studios aren't going to make any really significant changes they think will damage those revenues. So they must have concluded that "the times they are a changing."

After years of negotiating with the movie studios, Apple finally has gotten the major studios to allow rental of iTunes movies on the same day they release new DVDs. That's a big change, and suggests studios now have evidence that they will make no less money, and possibly more, if they do so.

Disney has had that arrangement with Apple since September 2006. Now Apple will be able to distribute movies from 20th Century Fox, Warner Bros. , Paramount Pictures, Universal Studios Home Entertainment, Sony Pictures Entertainment, Lionsgate, Image Entertainment and First Look Studios.

New movies can now be purchased for $15 or rented for $4. Older movies cost $10 to buy or $3 to rent.

For any number of practical reasons, such as the fact that hard drives always die, it is likely iTunes will get more revenue traction from rentals than from sales. Up to this point Apple movie sales have been pretty low, volume-wise.

Rentals are not only are cheaper, but are congruent. Most movies are not compelling enough to watch more than once, and owning makes most sense for movies one thinks one is going to watch several times or more.

So the issue everyone now will be watching is how revenue shares move around within the movie ecosystem. Studios wouldn't be taking this move unless they think they'll make more money from downloads and streaming than from selling discs.

Sure, downloads probably will negatively affect DVD rentals and sales. But the profit margins on downloads are much higher than for DVD sales or rentals. So if all downloads do is cannibalize DVD sales and rentals, the studios win.

Free Wi-Fi for All AT&T Wireless Customers?

AT&T hotspots have started providing iPhone users with free Wi-Fi access at Starbucks and other locations. AT&T Broadband customers also have free access. One wonders how long it will be before all AT&T Wireless customers will get access. AT&T has talked about that.

That's one advantage of customer and network scale. AT&T doesn't necessarily have to make much actual incremental revenue from the Wi-Fi service. What it does is make its wired and wireless service much more sticky.

And given its scale--100 million customers--AT&T is in position to create other "everybody is on network" services of various types, the same way Skype creates "free calling to all other Skype users."

The difference is that AT&T can mix and match services and features available on its in-region wired, national wireless and global network, including mobile and fixed broadband, mobile and fixed calling, messaging or other services with a "social" or "community" aspect.

Scale has many advantages.

T-Mobile Lighting 3G: Voice Only

T Mobile is lighting its 3G network in New York in voice-only mode, says Gizmodo. Don't ask me why. I cannot figure this out. Maybe the backhaul issues are serious enough that broadband really isn't available yet. If so, don't bother offering commercial service.

The voice network and EDGE data network already work. What conceivable value does a T-Mobile customer get from 3G speeds if all you can do is what you already are doing? Sure, it's just the first city of a national network.

But why not offer some new service that the network actually enables?

Mobile Sites Significantly Lift Site Usage

TotalWeb, the new company created by Nielsen Online, says mobile Web sites provide a significant increase in usage. Weather-based sites, for example, see an average 22 percent lift in usage, compared to sites that are designed for PC access alone.

So do entertainment sites, which get 22 percent more use when sites are rendered for mobile screens.

Game and music sites get 15 percent lift when authored for mobile use.

Nielsen says 87 million U.S. mobile users subscribe to mobile Internet services, and more than one in ten mobile subscribers (13.7 percent) actively uses mobile Internet each month.

iPhone Sales to Double?

Apple is going to sell lots more phones (no surprise there) if AT&T does subsidize the new 3G iPhones, says Bernstein Research analyst Toni Sacconaghi, reported by Eric Savitz, Barrons columnist.

If AT&T does provide a $200 subsidy for the3G iPhone, bringing the phone’s cost for consumers down to about $200, where current models are priced at $399 and $499, sales might double, based on past precedent.

Sacconaghi notes that that sales of the Motorola RAZR doubled when its price dropped from $500 to $150 and doubled again when the price went to $100.

If AT&T average revenue per subscriber from the iPhone is in the mid-$90 a month range, compared to less than $60 for the average post-paid user, then AT&T has an additional $720 in revenue over the course of a two-year plan to offset the subsidy.

AT&T Launching Mobile TV

AT&T is launching its own mobile TV service, which should provide more pointers for Dish Network, also expected to launch its own service in the future.

AT&T's service requires specific device models costing between $200-$300, a TV-only data plan costing $15 a month (or $30 if a user also wantsWeb browsing). One device not supported is the Apple iPhone, which for many is reason enough not to bother.

It is doubtful AT&T expects much immediate success. Verizon does not seem to have seen healthy uptake for its Vcast service so far.

Qualcomm, which provides the technology to support the Verizon service, says only that so far the service has been a disappointment. Silicon Alley writer Michael Learmonth suggests that
perhaps 1.5 percent, or 820,000 Verizon subscribers, have ever watched TV on their phones.

In Europe, where several operators offer mobile TV, fewer than one percent subscribe.

Analysts at the Yankee Group say five percent of mobile subscribers are actually willing to pay for mobile TV, if the monthly price is $5.

As has been the case for other mobile services, sluggish uptake now does not mean the service never will be significant. Mobile service itself and texting took quite some time to become firmly embedded as a part of consumer behavior, at least in the U.S. market.

Still, some question whether there is much appetite for a limited selection of long-form TV shows in the mobile space. The issue there is whether the preferred delivery mode might not ultimately be some on-demand delivery. Content breadth is more important to users than lots of other attributes.

Right now, that thesis can't be tested as the programming selection is so limited. Only when the variety of programming is about as rich as any typical cable, satellite or telco line-up is can other possible barriers be tested, including price of the handset, price of the subscription and need for dedicated handsets.

And even those attributes can only be truly tested when there's enough ability to download or stream video "over the top."

Comcast Triple Pay Adoption 18%

About 18 percent of Comcast customers actually buy the triple play. And there seems to be some resistance to the notion, despite its fundamental importance for both cable and telephone companies these days.

Qwest executives, for example, have discovered they are leaving money on the table by not selling single play and dual play services more aggressively.

Comcast says it is going to do the same. The triple or quadruple play might be the fundamental packaging strategy.

That doesn't mean every customer is going to buy such a package. And there are lots of reasons why that could be the case. Lack of interest, lack of money, lack of one specific feature, inability to use subscriber identity modules, lack of availability of a specific handset or programming network, contract terms, sticker shock and lack of awareness all can be barriers to triple or quad play adoption.

Real-Time Services: Bandwidth is Not Enough

Real-time services are the future of private and public IP networks. Just as certainly, users are starting to recognize that raw bandwidth is not enough. Quality of experience hinges centrally on quality of service, typically requiring class-of-service mechanisms, virtual private networks and application-aware control of bandwidth parameters.

Thinking Phone Networks might provide an example. The Covad partner offers voice-optimized access and has increased its customer base using that feature by 200 percent in the past two years.

“We believe this expansion will continue as more nationwide customers appreciate the quality and reliability of Thinking Phone services made possible by Covad,” says Steven Kokinos, Thinking Phone Networks CEO.

Thinking Phone Networks’ customers utilize its voice services to connect multi-site
locations, remote workers, and home offices. The issue there is "multiple sites." It's one thing to assure bandwidth quality at a headquarters site. It is quite another to ensure that home office and distributed associates have that same level of access to quality bandwidth.

It isn't clear how well most users understand that, yet, but greater experience, followed by word of mouth and other "social" mechanisms inevitably will create a market for "real time services" bandwidth that is different from "best effort" access.

Covad’s "Voice Optimized Access" product provides the dedicated bandwidth Internet connection that powers VoIP services from more than 50 wholesale partners nationwide.

Subscriptions, Not Ads Drive Cable, Telco Video

There is a notion, incorrect, that advertising revenues will be a big contributor to telco revenue streams as those firms scale up the size of their video entertainment customer base.

Some of the understandable confusion results from glancing at cable industry statistics on overall revenue, including programming networks and cable operators.

While it is true that programming networks derive a huge chunk of their revenue from advertising, cable operators really do not benefit as much.

As this Time Warner Cable chart suggests, advertising actually is quite a small part of the overall revenue mix, and has dropped, percentage-wise, as newer businesses such as high-speed Internet access service and voice have grown.

It's a nice revenue contributor, to be sure. But arguably not more important than churn reduction and retention, in terms of overall revenue contribution. Certainly it is not more important than voice and high-speed data services, going forward.

Time Warner Cable Expects 9% 2008 Revenue Growth

Time Warner Cable expects its 2008 full-year growth rate in revenues to be approximately nine percent, from a 2007 base of $15.955 billion, and its 2008 full-year growth rate in operating income before depreciation and amortization to be in the range of nine percent to 11 percent, from a 2007 base of $5.742 billion.

Time Warner Cable also announced that it is increasing its expectation for full-year free cash flow growth, primarily due to a reduction in cash taxes resulting from the Economic Stimulus Act of 2008. The Company now anticipates that its full-year FCF growth rate will be at least 40 percent.

That's if the newly spun off company can get all its local franchises renewed, a time-consuming if necessary formality, and then does not have time to make any acquisitions in 2008. The odds of the company making it through 2009 without making a significant acquisition or two are fairly low, many observers think.

The company will have the borrowing power and the motivation to extend its footprint.

Qwest Launches 20 Mbps Access Service

Qwest has begun selling two new broadband service tiers for residential and small business customers. Qwest Connect Titanium offers broadband speeds of 12 Mbps downstream and 896 kbps upstream at a standard rate of $64.99 a month.

Qwest Connect Quantum providers 20 Mbps downstream and 896 kbps upstream.

Bundle and annual pricing incentives are available. The company is rolling out the service to 23 of Qwest’s top markets in ten states, reaching two million customers at the end of 2008.

Charter Introduces 16 Mbps Access Service

Charter Communications has announced a 16 Mbps broadband service in its Wisconsin markets. The new offer features upstream bandwidth of 2 Mbps for both consumer and business customers.

The new service is priced at $79.99 a month for up to 16 Mbps downstream and 2 Mbps upstream. The offer is available to the majority of its residential Wisconsin customers and comes with a $10 bundle discount available for users that also subscribe to Charter’s phone or TV services.

Charter competes against AT&T 6 Mbps digital subscriber line services. AT&T has introduced U-verse access service operating at up to 10 Mbps downstream in Wisconsin, primarily targeting Time Warner Cable markets including the Milwaukee metro area.

$200 iPhone Subsidy from AT&T in June?

When the 3G iPhone is introduced this summer, AT&Twill cut the price by as much as $200, says Fortune magazine writer Scott Moritz. That would bring the phone's cost down to $199 for customers who sign two-year contracts.

Apple is expected to have two versions of the new iPhone, an 8-gigabyte-memory and a 16-gigabyte-memory model with "list" price tags widely expected to be $399 and $499.

Such a move would create significant churn potential for rivals Verizon Wireless, Sprint and T-Mobile.

The $200 rebate or subsidy would be limited to AT&T customers and not available through Apple’s stores.

The average iPhone user however, runs up a $100 tab each month due to the higher priced data and calling plan. That would give AT&T an quick payback on its $200 outlay.

Such a move also would snare more of the ultimate iPhone market as AT&T moves closer to the eventual end of its exclusive deal with Apple. And since the iPhone has proven to be such a boost for mobile broadband, AT&T logically would believe much-wider iPhone adoption will help it get where it wants to go, in terms of mobile broadband revenues.

Rich Media: 20% of Online Ads by 2012

eMarketer predicts that spending on online rich media and video ads will account for nearly one-fifth of all online ad spending by 2012, up from 9.7% of all online ad spending in 2007.

"Video ads command higher prices than static display advertising," says David Hallerman, senior analyst at eMarketer. "That both boosts overall ad spending and draws in more dollars from traditional brand marketers, who have been reluctant to commit much of their ad budgets to the Internet."

Ongoing experiments with video ad formats and a lack of standards have, in part, kept the online video ad market from even stronger revenue growth.

Other hurdles have included limited high-quality video content to attract big advertisers and unresolved issues such as traffic measurement, which will be needed to gain the trust of the most deep-pocketed marketers.

As those problems are solved, spending will increase. eMarketer predicts that US online rich media and video ad spending will total more than $9.4 billion in 2012, which is more than four times as much as the 2007 spending level.

Windstream Doubles Access Speed

Windstream has doubled the Internet speeds available across most of its 16-state network, offering 12 Mbps service in certain areas and expanding the availability of 3 Mbps and 6 Mbps service. The company now offers 3 Mbps service to virtually all of its broadband addressable lines as a result of the network upgrade.

“Windstream experienced a four-fold increase in Internet usage in 2007 as our broadband customer base grew 28 percent year-over-year,” says Ric Crane, executive vice president and chief marketing officer.

Windstream high-speed Internet service is available at any speed – including 12 Mbps, 6 Mbps, 3 Mbps and 1.5 Mbps – for $19.99 per month for the first six months with qualifying services in participating areas.

Comcast Boosts Business Class Access Speed

Comcast has boosted its "Business Class" Internet access speed from 8 Mbps downstream and 1 Mbps upstream, to 16 Mbps and 1 Mbps, respectively. The increase, offered in all Comcast markets, comes at no extra cost. Prices for the MSO's Business Class Internet service range from $59 to $89 per month.

Unmanaged bandwidth is getting cheaper and faster all the time, despite the fears some have had that a strong duopoly in the U.S. market would inhibit such moves. The task now remains for providers of quality-assured bandwidth to make the case for why managed bandwidth is more important, has value, and is priced accordingly.

Fixed Mobile Convergence Drives Quad Play

Fixed mobile convergence might be shaping up as a key driver of "logical" quadruple play bundles. Of the top values cited by respondents to a Compete survey in early 2008, three of the four most important features involved integration of home (fixed) phones and mobiles.

Another significant finding: 97 percent of consumers were most interested in the broadband Internet service component of the bundle.

These two top findings suggest that FMC is as big a deal as many say, and that broadband has emerged, at least among technology-savvy users, as the single most important service delivered by a wired network.

The new survey also is interesting in suggesting that consumers finally are figuring out conditions under which a wireless service is a "logical" part of a bundle.

In past years, people seem to have better understood or accepted the idea that a voice service and Internet access service "go together." They now are comfortable with the idea that video and Internet access go together, or that voice and video can be bought in a package.

Wireless and wired voice service seems to have been less obviously a logical bundle for most consumers. But the ability to integrate the mobile and landline phone obviously is resonating in a new way.

Compete says interest in bundles increased 55 percent from July 2007 through March 2008.

More than four out of 10 respondents say they would either be "likely" or "very likely" to consider purchasing mobile phone service from their telecommunications provider.

Stronger FiOS Growth than DSL at Verizon

Verizon digital subscriber line growth in the first quarter was up sequentially about six percent, a fact that leads some to conclude that DSL adds are slowing. There's some truth to that, caused primarily by growing saturation of the broadband access market.

FiOS account additions were up to 23 percent, sequentially, though. Some customers logically are upgrading from DSL to FiOS, though.

Some observers might argue that Verizon's churn rate is up. That's obviously caused by current DSL customers upgrading to FiOS. Excluding the internal upgrades, the churn rate for DSL services hasn't budged, Verizon executives say.

In the most-recent quarter FiOS net subscriber counts were up by one million, year over year, while net DSL subs were up about 170,000.

Unlimited Mobile Plans Are Revenue Accretive

Despite fears of a new and devastating price war caused by unlimited calling plans, the opposite seems to be occurring.

Quite to the contrary, the new plans seem to be encouraging users to trade up, and add more-capacious data plans as well, at least at Verizon Wireless.

"In the first quarter our unlimited plan accounted for 13 percent of our single line retail post-paid adds, says Denny Strigl, Verizon Communications COO. "That compares to about four percent choosing the $99 or above tiers before the plan was launched." Lots more users seem to be trading up to the more-expensive plans, in other words.

"We’re seeing good growth in high tier voice plans," says Strighl. There are churn benefits, which was the impetus for the plan. What might have been unforeseen is the increase in usage of data services and aggregate growth of customers moving up to the $90 plan from lower-revenue plans.

"Additionally, a high percentage of the new customers who choose an unlimited plan also choose our select or premium data packages," says Strigl.

"In March, which was the first full month after the launch, our average daily disconnects declined six percent from previous months and that is at the voice access tier $79 and above," says Strigl.

It appears that there are more users willing to trade up than there are heavy users finding they can save money by trading down, in other words.

$6.6 Billion U.S. Mobile Media Revenues by 2012

U.S. mobile media and entertainment revenue will grow to $6.6 billion in 2012 from $3.1 billion in 2007, according to Analysys Research.

Analysys said that most of the growth will not happen until after 2010, when the technical and market environment for mobile media and entertainment is expected to improve.

Up to this point, mobile TV, music and other content has been patchy in coverage, limited in content and expensive.

That is less true globally, Analysys says. Total spending on mobile media services by consumers and advertisers worldwide will grow to more than $102 billion in 2012 from about $47 billion in 2007.

"Relative growth in consumer spending on mobile media applications will be surpassed by advertisers, as they look to exploit the maturing cellular content channel as a means to deliver their marketing and advertising messages to key target segments," said David Kerr, vice president at Strategy Analytics.

The New Conventional IT Wisdom

It is perhaps a commentary on how much things have changed that the U.K.-based research group Butler Group can put out a new research report that confirms what the consensus is.

Butler Group says organizations are moving from traditional hierarchies based on command and control to looser structures featuring collaboration and team work, with a fundamental shift from one-to-one to many-to-many communication.

Communications service providers typically worry more about access line shrinkage, margins on minutes of use and adoption of new services, than about changes in user communication modes. But Butler Group's point about many-to-many communication is key.

It implies a growing shift to "broadcast" modes of communication such as blogs, Twitter-style streaming and social networking mechanisms.

Organizations also are beginning to expand past their traditional boundaries found in the past, which is driving the need for IP infrastructure.

There is a requirement for greater location independence, with remote working becoming more popular and many employees no longer remaining in one place for any great length of time, the research group says.

"It is becoming apparent that the existing separate silo-ed infrastructures are no longer the answer," Butler Group says.

"A services-based approach is best suited to this environment," Butler Group says.

That means Web services, says Mark Blowers, Butler Group director.

"Moving away from proprietary solutions for voice and data to a horizontal communications architecture will enable the communications environment to be broken down into separate layers, making use of industry standards to integrate the hardware, common services, and administration elements," he says.

All of that shows what the new consensus is. Web services, software as a service, open networks, remote and cross-boundary communications. Most significant of all, from a service provider perspective, is the move to "many-to-many" communications. That could be as significant as the shift from wired to wireless communications.

3G BlackBerry 9000 Delay

Research In Motion's 9000 series BlackBerry may be delayed by two months due to battery life, voice quality and other issues, RBC Capital Markets says.

The new device was expected to be announced in May with a June launch for AT&T in the U.S. and Vodafone in Europe, but might now be delayed to July and August, RBC analyst Mike Abramsky says.

Some suggest the "Meteor" will use the new BlackBerry 4.5 operating system, a 624MHz processor, 480x320 screen, GPS, Wi-Fi and HSDPA, a 3G mobile communications protocol that is reportedly the source of the battery problems.

The new BlackBerry may also have rounded edges, giving it a sleeker look. Reports suggest that it will not have a touch screen like Apple's iPhone.

The BlackBerry and iPhone are in what some observers call a "two horse smart phone race," and 3G connections are the top new feature iPhone users want, according to ChangeWave.

AT&T Begins Starbucks Wi-Fi Rollout

AT&T has begun its rollout of Wi-Fi service at company-operated Starbucks stores, kicking off a nationwide effort that will continue through 2008.

As of May 1, qualifying AT&T high speed Internet and Wi-Fi customers will have complimentary Wi-Fi access at more than 7,000 Starbucks locations nationwide.

Free AT&T Wi-Fi service is currently offered with AT&T's three higher-speed residential broadband packages, all small business broadband packages and with all AT&T U-verse offerings with high speed Internet service.

For other customers, AT&T Wi-Fi service will reach company-operated Starbucks locations on a market-by-market basis throughout the year. The experience will include a mix of free and paid connection options for both frequent and occasional Wi-Fi users and qualifying Starbucks customers.

Mobile Skype in Beta

Skype has released a beta version of Skype for mobile phones. The “thin“ client works on about 50 of the most popular Java-enabled mobile phones from Motorola, Nokia, Samsung and Sony Ericsson, Skype says.

The beta version is available worldwide with a feature set that includes chat, group chat, presence, and inbound calls from Skype users using SkypeIn.

Additional features, which include Skype-to-Skype and SkypeOut calls from the mobile handsets, are initially supported in seven markets: Brazil (Rio de Janeiro), Denmark, Estonia, Finland, Poland, Sweden, and the United Kingdom.

U.S. Smart Phone Market: iPhone and BlackBerry

ChangeWave says its polls show a rapidly evolving two-horse race between the Apple iPhone and Research in Motion BlackBerry, with second tier players like Palm (PALM) and a host of others being shoved to the sidelines.

BlackBerry owners like most the BlackBerry's exceptional access to email. What they don't like is its Internet browsing experience.

As you might guess, iPhone users value different features. By far the most lauded feature of the iPhone among owners is its seamless integration of a Phone, iPod and Internet browser.

The second most popular feature is the iPhone's touch screen interface, followed by its ease of use.

There is no doubt about what iPhone owners hate most: the speed of the AT&T EDGE network. Nor do they like being restricted to using just one carrier.

Users also expressed unhappiness with the iPhone's lack of copy-and-paste functionality.

Each device has "a super-loyal cadre of users that fervently support their phone brand, and each has extraordinary room to grow," Compete says.

BlackBerry continues to show "enormous strength" among ChangeWave business users.

"But the bottom line in this horse race is Apple and Research In Motion are both giant winners," says ChangeWave. "The rest of the smart phone manufacturers lose."

VCs Think TV is Ripe for Disruption

Venture capitalists seem to agree that television is a business ripe for disruption. Silicon Alley bloger Michael Learmonth says 68 startups landed $460.5 million in funding in 2007, up from $266.9 million in 2006. Venture capitalists also invested another $217.3 million in the first quarter of 2008, he says.

$6 Billion Enterprise VoIP Market by 2012

Business-class VoIP service revenues could reach $6 Billion by year end 2012n say researchers at Pike & Fischer.

The firm predicts business-class VoIP services in the United States will grow at a 31 percent compound annual growth rate over the next four years. In a new study, we've concluded that revenue for

One Bucket for Voice and Broadband

One of the reasons unified communications, unified messaging, unified services, fixed mobile convergence, mashups and other similar concepts are so confusing is partly because there are lots of different ways they can be implemented, and because they highlight different ways software usage and communications are changing.

In some future incarnation, users who pay money for services will be able to invoke various identities and roles when using those services and features, with some sort of analogy to "multiple service, single log in" rather than "single service, single sign-on."

In other words, where today users might have to log in serially to multiple services they want to use, in the future they might be able to log in once, but use different features, devices and network services depending on their "roles" and "identities," while the network itself figures out all the details of authentication and security.

In the nearer term, it might be more common to find that customers buy a service, such as "voice and messaging" or "broadband access," and then be able to use any number of access networks or devices as part of the one service. Think of a single bucket of usage that can be used for "calling," "messaging" or Web surfing, for example.

Instead of buying separate 3G wireless service, digital subscriber line and then Wi-Fi hotspot service, a user might be able to buy "broadband" and use all the various modalities. The same sort of concept might hold for "calling," where mobile, fixed or PC-mediated, TV-mediated, game console or some other format is used.

AT&T is pushing that way, for example. Having a large internal customer base, or "community" if you like, it can leverage assets and relationships in a fairly broad way. All AT&T voice customers, for example, are one huge calling community.

In the meantime, lots of changes on lots of fronts will keep happening, pushing almost inexorably toward a future where features are made available not on a location or device or number level, but at a authenticated user level. Beyond that lies the ability to invoke features based on an identity or role.

Java: 100 Percent Open Source

Sun Microsystems says Java will be made 100 percent open source. Sun began moving that direction in 2006 and now will hope the change prompts much more development on the Linux platform.

The move does not finally the answer the question of how some companies can make money "selling" things other people offer "for free." Still, the move will provide more examples of how "for fee" businesses and services are built on "free" or "open" platforms.

One of the obvious developments so far is that "open" is one business model, "free" another. Platforms can be "open" to innovation without using a "free to end user" business model. On the other hand, "free" platforms can sometimes create huge ecosystems of "for fee" devices, services and software that leverage a widely-used "free" platform.

Mobiles: Slowdown Possible

Mobile shipments are shaping up to be softer in the second quarter, says ABI Research Vice President Jake Saunders. "Year on year, the first quarter of 2008 was up 13.7 percent, but the second quarter of 2008 is likely to be softer than in previous years."

Shipment volumes in the developed markets have softened slightly due to the credit crisis, but emerging markets such as Asia-Pacific, South America, and the Middle East/Africa are delivering growth rate percentages in the mid-20sn he says.

Nokia increased its share to 39.9 percent while Samsung and LG were also net winners with 16 percent and 8.4 percent, respectively, he adds.

Motorola continued to lose market share (falling 2.6 percent) to 9.5 percent, while Sony Ericsson lost market share (down to 7.7 percent).

But a new class of mobile device: MIDs (Mobile Internet Devices). MIDs made their debut last year, and some might consider them contenders of a new sort.

ABI Research expects 2008 to top out at 1.28 billion devices shipped – a 12 percent increase year over year. But the firm also warns there could be exposure to the downside.

Spam Not an Issue?

Ferris Research wonders why there isn't more interest in spam problems on the part of the media. One reason might be that ISPs, application providers and security suites are doing a pretty good job these days.

One observation: mission creep is an issue lots of organizations face. Attention gets paid on new problems that sooner or later get solved. Then organizations or companies have to find some new problem to solve or they are out of business.

Maybe spam is that sort of problem.

Teens: 60% Have Mobiles, 70% Have PCs

Six in ten teens (59 percent) now have a desktop or laptop computer and 71 percent own mobile phones, up from 45 percent in 2004 and 63 percentin 2006, says the Pew Internet and American Life Project.

Overall, more than four in ten teens (45 percent) personally have both a computer and a cell phone with cell phone (81 percent) and computer (65 percent) ownership being
particularly high among older teens.

iPhone Boosts Wireless Data Revenue

The iPhone clearly is boosting AT&T Wireless data revenues, which increased 57 percent increase year-over-year in its most-recent quarter.

Wireless revenue for the first quarter of 2008 was $11.8 billion, with wireless data revenue contributing $2.3 billion, or 22 percent, of that total, compared with 16 percent in the same period last year.

Internet access, email, and messaging overall are the drivers. And there's no doubt smart phones are key. Smart phone users generate twice the data revenue of typical phone users.

iPhone average revenue per user is more than $90, AT&T executives say.

BT's 90 Day Cycles Startle People

BT now operates on 90-day development cycles for applications, including the time needed to prepare a business case, says Dave Axam, BT director of transformation. In some cases, as you would suspect, more than a single cycle might be required for a single project.

But that sort of speed seemed to startle many delegates at the MetaSwitch Forum, many of whom are independent telcos, rural cooperatives, competitive local exchange carriers, cable companies and other associated with those ecosystems.

But Axam says BT is serious about that sort of adaptation to a world running "at Google speed." He was given the assignment of launching voice over IP for BT "in three months." Axam says he discovered early on that Session Initiation Protocol is a bit like English--one has to know which variant of the dialect is being used--and that has taught BT much about the pitfalls of relying exclusively on such "standards."

All of that seemed to provoke some anxiety on the part of delegates, who may well have been wondering how well they'll fare in a world that requires innovation at that sort of speed, with the relationships and assets such speed would seem to require. BT, after all, created a developer community, a software development kit, feedback, response and interaction capabilities as part of the overall effort.

"But one of the hardest things is the commercial wrap," says Axam. That means the ability to intgrate new applications, many with some sort of tie to the Web, with the rest of BT's services.

One delegate, who seemed to agree with the characterization of where things were headed, nevertheless expressed the obvious point that "I don't think we are going to be putting together third-party developer groups" to do this sort of thing.

Anxiety? Yes, for many reasons. The integration of Web with telephony, the increasing importance of software-mediated experiences, the growing technological complexity of the business overall and the different assets required, may well be disadvantages for whole classes of competitors, even as the trends favor larger, wealthier companies.

All of that simply creates new opportunities for aggregators of applications, though. Still, as another delegate put it, "I'm not sure how comfortable I am with putting my widget on an iGoogle page."

But that might be a more viable avenue than trying to "force" customers to a service provider portal, as beneficial as that might be for the service provider.

Qwest Readies 20 Mbps Access Service

Qwest appears to be very close to launching a 20 Mbps downstream, 896 kbps upstream access service called Qwest Connect Platinum, available on a "naked" basis without the requirement for buying a voice line at the same time, and costing $109.99 a month.

The consumer portal now seems to be working just fine, so enter your street address or phone number, if you use landline service and are a Qwest customer, to find out what sorts of speeds really are available at your location. In my case, for example, my connection back to the central office appears to be long enough as to preclude getting 20 Mbps. About 5 Mbps is all Qwest actually can deliver to my location in Denver.

And Qwest does not seem to among those service providers who want to "throttle" use of bandwidth, as the Qwest Web site emphasizes using the service for "watching full-length movies online, multi-player Internet games, multitasking with multiple Internet applications and networking computers.

Signing a two-year contract locks in that price "for life."

It's Still All About Wireless and Wireline...

Despite gaining 148,000 net new U-verse TV customers in the most-recent quarter, and total net video connections of 264,000, including DirecTV and Dish Network accounts. Broadband access revenues were up 13.2 percent year over year.

Total high-speed Internet connections, which include DSL and satellite broadband services, increased by 491,000, and AT&T ended the quarter with 14.6 million broadband connections, up 13.9 percent over the year-earlier period.

However, AT&T’s wireline disconnect rate for the quarter of 10 percent, compared to 9.4 percent probably is the highest in that company's history.

Broadband someday will represent a bigger percentage of total revenue. But right now, the only services that can really "move the needle" for a company this large is wireless and wireline voice accounts.

AT&T: Different Quarter, Same Story

Once again, wireless drove performance during AT&T's most recent quarter. Revenue grew a healthy 22 percent in the first quarter, but wireline voice service revenue fell 7.1 percent to $9.7 billion, while wireless revenue increased 17.1 percent to $10.6 billion. Data revenue grew six percent to $6.2 billion. Slower data growth will be a problem if wireless does not continue its upward climb.

IP-Based Surveillance Market: Take a Look

The market for IP-based video surveillance equipment grew about 50 percent in 2007, say researchers at MultiMedia Intelligence. It's a new market, so equipment sales will not knock your socks off: $500 million worldwide. But that's a comparative growth rate 400 percent higher than for traditional cameras and other gear to support video surveillance. And IP gear tends to be smaller and cheaper, so more equipment is bought, even at lower aggregate sales volumes.

The important thing to note is that many of those cameras are connected to live monitoring centers. That's another IP trunking revenue stream.

Also, keep in mind that high-defintion plasma displays are starting to show up in more retail and professional settings than one has seen in the past. Video, in short, is starting to become an immersive medium, not confined to traditional TV screens. That's going to represent lots more opportunities for services, applications and gear.

All those screens have to be installed and configured, for example. That's going to increase the amount of work available to multimedia "home theater" installers, for example. And since some increasing number of those video screens are going to be networked, a new type of application for traditional value added resellers to support as well. That's not to mention video services and bandwidth sales.

Skype Revamps Unlimited Calling Plans

Jim Courtney at Skype Journal says Skype has revamped all of its Skype Pro plans by creating flat rate unlimited (fair use of 10,000 minutes a month) international calling plans covering landline numbers in 35 countries, plus mobile numbers in some countries.

Among the notable changes are the cheaper calling plans for users who call between the United States and Mexico, elimination of connection fees and greater plan simplicity.

The plans do not require a contract. Users can buy plans covering calling to Canada and the United States; Canada, the United States and Mexio; or 32 countries plus Canada, the United States and Mexico.

Users also can upgrade their plans on a temporary basis. All plans include voice mail.

For users in Canada and U.S. the three plans:cost $2.95, $5.95 and $9.95 a month. European user plans cost €2.95 per month for calls within a single country, unlimited calling within 20 European countries for €3.95 per month and unlimited calling to 35 countries for €8.95 a month.

Similar plans are available for users in Asia, Brazil and the rest of the world.