SunRocket to Packet8 Transition: Why it is so Easy

Most former SunRocket customers who have moved to Packet8 service have had their new service up and running within three days, says Huw Rees, 8x8 VP. So why is the Packet8 service faring better than TeleBlend, in terms of transition ease?

Serendipity, at least in part. Global Crossing and Level 3 Communications were the primary SunRocket transport providers, and Packet8 works with both of them as well. So when a former SunRocket customer wants to switch to Packet8 service, pretty much all it takes is the letter of authorization, about 24 to 48 hours to get the account re-pointed to Packet8 and away from SunRocket, and time to ship out a new analog terminal adapter.

That's not to minimize the face that 8x8 has had quite some years to get its back office and warehouse operations into place. It's just that having common transport providers in common with SunRocket has made the logistical process of "porting" accounts easier.

Consumer, Mobile Satellite Drive Growth for HNS

Though its legacy enterprise networking business still generates the most revenue, consumer broadband access and mobile satellite provided the growth for Hughes Network Systems in the most recent quarter, says. Pradman Kaul,HNS CEO.

“The consumer, small and medium business and mobile satellite businesses continued to be the key contributors to our revenue growth,” says Kaul. Over 30,000 new broadband access subscribers were added in the second quarter of 2007, growing the HughesNet customer base to 353,000 at the end of June. That's year-over-year growth of 18 percent.

Revenue from our mobile satellite business showed strong growth of 88 percent
to $35 million in the second quarter of 2007 over the second quarter of 2006.

HNS does not report average revenue per unit for either its enterprise or consumer users. So you might not think 353,000 broadband access customers is a particularly big deal. But look at it this way. Assume that ARPU for a single enterprise customer site is $100 a month or so.

Then assume that each of the consumer, small office or small business sites each represents the same ARPU, as some analysts have suggested. That's a very healthy recurring revenue stream, by anybody's standards, for a consumer Internet access product.

And extremely rare in the communications business. How many other companies do you know that can claim the ARPU for a consumer access line is the same as the ARPU for an enterprise line? I know of no others.

Vonage Work-Arounds in Place

Vonage has "substantially completed" the deployment of work-arounds for two of three VOIP (voice over Internet Protocol) patents claimed by Verizon Communications. Though some litigation remains, the theory that patent infringement would kill Vonage does not presently look like it will match the facts.

Vonage began deploying the two work-arounds about July 1, the company says. The two work-arounds target most of Vonage's customers, with the third work-around covering wireless voice, Citron said.

Vonage also has completed development on the third work-around, Citron notes. The company consulted outside experts to ensure that the work-arounds do not violate Verizon's patents, he adds.

The patent hiccup will be just that: a hiccup. The strategic problem remains Vonage's positioning in a world where cable triple play offers have serious traction, more call volume is migrating to wireless or text modes, and communications are becoming part of enterprise, portal, entertainment and instant messaging experiences.

Microsoft OCS: Here Comes Presence

Microsoft Office Communications Server (OCS) 2007 has recently been released to manufacturing, so expect to hear a lot of noise from Microsoft about presence and voice, as Microsoft will be nudging and cajoling third-party software vendors to integrate presence into their applications. Microsoft also will be rearranging market share in the fragmented space as well (Cisco, Jabber and all the traditional business phone system vendors will be playing, as well as Oracle, for example)

And, oh by the way, the effort shows just how real is the danger of communications service providers becoming "dumb pipe" providers.

Consider a typical customer relationship management (CRM) application. A salesperson might be looking at a customer record, and see a list of all email communications that others on a sales team have had with a given customer. There's a problem noted, and the sales rep wants to make sure it is fixed before placing an outbound call to the customer. That means checking with another internal team member. This then entails:

1. Launching Outlook Address Book.
2. Pointing to Global Address List.
3. Double-clicking a name.
4. Finding the appropriate number.
5. Dialing on the desktop phone.

Using OCS 2007 with presence, the process is:

1. Right-click internal colleague's name directly within the CRM record.
2. Choose "Call this Person" or "Send an Instant Message to this Person."

Aside from access to the global IP network, where is the telco, cable company or other access service provider involved?

Will Verizon Wireless go WiMAX?

Will Verizon Wireless someday adopt WiMAX as its fourth generation access platform? And if it does, will WiMAX swiftly become just one more access technology wireless incumbents use to reach customers? If so, will WiMAX really be disruptive?

So here's the logic. Vodafone has at least for the moment chosen to keep its 45 percent stake in Verizon Wireless. And though it hasn't been a WiMAX backer heretofore, Vodafone has become a principal member of the WiMax Forum, and has been conducting trials in Malta, France and Bahrain for some time now.

This might just be a hedge, as Vodafone also supports the cellular-based standard for very high speed data networks LTE (Long Term Evolution), as well as WiFi Mesh. But it's a fast-moving world, and Vodafone at the very least wants to react swiftly in case WiMAX takes off as a primary tier one provider access platform.

In the U.S. market, two code division multiple access (CDMA) networks are Sprint and Verizon Wireless. The Sprint Clearwire alliance ups the ante. And Vodafone obviously knows things we do not. But there is some chance WiMAX becomes a major incumbent access platform. And that would clearly blunt its use as a competitive and alternate pipe.

Still, it is fair to argue that WiMAX, even in the hands of incumbents, will spur some "goodness". Sprint WiMax will launch first in Chicago and Washington, D.C. in early 2008, offering 2 Mbps to 4 Mbps service for an estimated $55, company executives have suggested. That would blow the doors off at&t or Verizon 3G offerings, I have to tell you.

Sprint also will be mulling a more open approach to use of that bandwidth than we have been accustomed to seeing on wireless networks. So maybe more competitive and open goodness will flow from WiMAX, even if it winds up being a major incumbent access platform.

Remarkable Calm Despite TeleBlend Snafus

Given all the challenges new VoIP provider TeleBlend has faced since deciding to make a major play as a continuity provider for former SunRocket customers, including at least one significant service outage in the first couple of weeks, there isn't much squawking by disaffected customers in the blogosphere. It's somewhat odd. For an operation that jump started itself fast, and then had to transition customers from another provider, there were bound to be transition problems. Billing issues here and there, administration portals not displaying real time data, password issues or adapter resets were almost certainly to be expected.

Having worked at start up operations where we had to support Cisco networking gear, Nortel phone systems and the circuits to support them, I know what it is like when all the systems are not fully baked. And, in fairness, there is simply no way TeleBlend was going to have its back office fully baked before stepping right into the customer support morass.

I'll be willing to bet, however, that I've encountered more software problems setting up a new Vista PC than most SunRocket customers have had getting their transitioned services to work.

Maybe customers are more unhappy than they appear to be expressing. If so, we'd like to hear about it. But we aren't hearing all that much. Which might simply mean most users might have encountered a glitch here and there, but that service for the most part is working the way it was before.

The adage we are fond of repeating is simply that customer satisfaction and loyalty do not correspond all that well for mass market communication services. Happy customers will desert. Conversely, it is well worth noting, somewhat unhappy customers will not necessarily churn. I wouldn't say I am happy having to use Vista. Neither would I say I am ditching Windows for a Mac, though I have been considering it for at least a year.

Maybe I'm just not hearing what is going on in SunRocket land. But I am neither surprised there have been porting and support issues, nor concerned TeleBlend will fail to get its operational processes in enough order to support the services and price points it has chosen. How much support can a user really expect for a $12.95 a month service? That's no slam on TeleBlend; just a recognition that price points that low will not allow for much support infrastructure.

Still, I have been surprised at the relative calm, despite all the difficulties.

Movie Download Business Won't Be That Easy

Until now, most consumers have been reluctant to purchase movie downloads. There are lots of reasons. It is a new behavior, and learning to do things in a different way takes time. There's little compelling reason to change current behaviors, either. Whatever else one might say, the ability to rent or buy movie material is not a pressing problem.

So Web downloads of the same material consumers easily can get is not a winning proposition for most people: it simply doesn't solve a big enough problem, or save enough time or money. Not when DVD retail, Netflix, Blockbuster rental channels, IPTV and video on demand are so easy to use, both absolutely and comparatively.

And so far, it would be hard to argue that paid movie content delivered over a Web connection for viewing on a standard TV actually saves either money or time.

Download-to-burn services offer a way to get around these limitations and might prove more appealing to consumers, says The Diffusion Group. But not for a while. The number of titles available for D2B services is extremely limited, and that won't be an easy problem to fix.

Not for any technical reason, but because movie content owners are acutely tuned to the distribution methods that net them the most money. And there's no way they'd take a chance on harming existing channels by aggressively deploying a new channel before they have some assurance that cannibalization is minimal and new markets can be created.

CinemaNow and Movielink, both of which offer who offer D2B services, have found uptake to be poor. The problem is pretty simple. Movie rentals and purchases are all about the content, and when the content can be had. Since the studios are cautious, the content D2B offers is widely available elsewhere, through the traditional channels.

While 49 percent of adult Internet users are to some extent familiar with online movie stores that offer downloads, less than five percent report having purchased a movie download.

Not surprisingly, those most interested in D2B services are also the heaviest DVD buyers. On average, D2B potential users purchase 55 percent more movies than users who say they won't, or probably won't use D2B services.

Price sensitivity for B2D services also is significant as well. Still, the biggest problem is simply that the hassle factor is too great, the content selection available elsewhere and the price or time savings minimal to non-existent. This is going to be a tough market to jumpstart.

Joost will provide a new test, of course. But it still is hard to see how the incremental value outweighs the hassle, at least for most consumers. Non-traditional content likely will be the more important factor, ultimately.