Enterprise IT Spend is Falling

The latest ChangeWave corporate IT spending survey shows--for the first time in years--a weaker IT spending growth rate and poor visibility headed into the first quarter of 2008. About 24 percent of respondents say their company will increase IT spending for the first quarter, a figure unchanged from the previous survey, but far below the average seven-point seasonal increase seen in each of the last four years, Changewave says.

Another 20 percent of those surveyed report IT spending will decrease, or there will be no spending at all in the first quarter, which is three percentage points worse than reported in the last survey.

While just over half (52 percent) say their company is giving a "green light" to IT spending, suggesting spending is normal, this figure is down five percent from previously and is now at its lowest level in more than three years, Changewave says.

Some 42 percent say their company is either reducing spending or putting spending on hold, the worst reading in three years, Changewave notes.

BlackBerry Still Owns Enterprise Smart Phone Market

Research in Motion's Blackberry (73 percent share, up two points) continues to control the lion's share of the corporate smart phone market, according to a recent ChangeWave Alliance survey. In contrast, second place Palm lost about four points of share (19 percent). Motorola has 11 percent share, down one percent since the last ChangeWave survey.

Apple's iPhone has five percent share, up three points since the last survey, but has presence primarily among small to very small companies, the ChangeWave survey shows.

Google Threat to Telcos: How Real?

Yesterday at the Stealth Communications Voice Peering Forum, there was spirited discussion about Google, and on Google's impact on the broader telecom industry. One line of thinking was that Google wasn't as big an issue as sometimes thought, because the one thing it really has succeeded at is advertising. The implication is that Google will not, or cannot, emerge as a force in the mobile or landline parts of the telecom industry.

The other point of view is that Google already has become a factor, even if it is only as a force reshaping all of advertising.

Likewise, some people are going to argue that Verizon Wireless and at&t Wireless announcements about the openness of their networks are essentially "no big deal." Customers already could swap Subscribe Information Modules" in at&t and T-Mobile phones because both carriers use GSM, and that's just a feature of a GSM network.

That misses the point. The entire U.S. wireless industry now has formally and publicly embraced the notion of open networks. There won't now be any retreat from that position, as end users increasingly will expect it, as every consumer expects such openness in Europe.

And though it sometimes seems as though all essential regulatory debates have ended in the U.S. market, the converse is true. In large part because of what now is happening in Europe, policymakers ultimately are going to have to reexamine the basic national framework for telecom regulation in the U.S. market.

The argument that a capital strike is inevitable in any "functional separation" regime, or a "structural separation" regime, does not seem to be borne out in the European markets. Carriers might not like the framework, as it is helpful to competitors. But dire consequences: a capital strike that cripples robust broadband access deployment, does not seem to be occurring in Europe, where such a strike might have happened.

That is not an endorsement of "anti-telco" restrictions. What is required is some encouraging, stable policy that provides clear incentives for rapid, aggressive optical access investment on the part of the leading U.S. telcos, and assures their investors that a predictable return is possible. "Structural" or "functional" separation essentially can "guarantee" a carrier that most wired broadband traffic (other than cable's) will flow over the carrier's owned pipes.

In essence, regulators can ensure that nearly 100 percent of broadband access traffic. other that that provided by cable operators, flows over the incumbent wired telecom network. Granted, the U.S. and European markets are diverging. Cable is a big factor in the U.S. market and is driving measurable and effective competition to a large extent.

The issue is whether some sort of separation can be crafted that actually creates a better investment climate for incumbent optical access facilities. That isn't the way separation traditionally has been viewed. But circumstances might be changing. A company whose "reason for living" is the "best possible optical access", serving virtually every potential retail competitor, with reasonable assurances of a return on investment, might be worth looking at.

The analysis will not be easy. Cable is a huge "fact on the ground". It might be too late to create a regime where all retail services flow over one huge physical access network. Also, cable operators historically have resisted giving up their networks. But there's a cost to upgrading those networks, and the financial markets never like it when cablers have to invest heavily in those networks.

But even large global carriers are discovering that spending more of their dear capital on transport facilities might not be the best way to proceed. It might seem improbable at the moment that such a fundamental new debate is possible. But give matters a couple of years. Demand for access bandwidth is going to explode. Carriers, with the exception of Verizon, will need to respond.

Financial markets will need reassurance. Maybe the current regime continues to work. But maybe it doesn't. Watch the European markets. If bandwidth demand continues to explode, and European end users start to routinely receive much more bandwidth than U.S. consumers do, there will be an inevitable demand for doing something in the U.S. market.

att wireless goes open

The last wall has crumbled: at&t Wireless says it will "immediately" open its network to any device and use of any application, without contract requirements, with the exception of Apple's iPhone, which still will carry a two-year contract requirement and remains subject to Apple's own requirements.

Consider what has happened in just a month: Sprint Nextel and T-Mobile agree to work with Google on Android, the open operating platform for mobile devices. Then Verizon says it will open its network next year. Today, at&t Wireless says it is open "now" to any GSM devices.

In the process, the entire U.S. wireless industry has moved to an open, unlocked devices regime that, although the norm in Europe, never has been the U.S. regime.

Give credit to Google. It has done what no other company could do: it has forced openness upon the entire U.S. wireless industry, proving that, at least sometimes, only a very large, very powerful contestant can cause massive industry innovation.

What's Causing Comcast Slowdown?

Comcast has cut it outlook for 2007 citing “an increasingly challenging economic and competitive environment.” Cable revenue growth will be 11 percent, off from the 12 percent predicted just six weeks ago, representing 500,000 fewer revenue generating units.

Comcast now projects adding six million to 57 million, versus previous guidance of 6.5 million additions. Cable cash flow growth will also be off about a percent from prior guidance at 12 percent.

That isn't what is so interesting. In the past, cable has claimed to be recession resistant, and analysts generally have agreed. In fact, the argument has tended to be that in a tougher economic climate, cable represents even more entertainment value for the price.

To be sure, cable now has many more lines of business, and perhaps some users will consider some of them optional. Perhaps the more advanced video services will be seen as optional if choices have to be made. Perhaps customers will consider trading down from higher-speed broadband packages to slower speeds.

But the larger issue is a matter of weighing the importance of economic and competitive factors. Is it the economy driving the shortfall or is it competition? Maybe consumers are making some tough budget choices.

But what if some of the slowdown is defections to telco services? And how much to Verizon? Is FiOS now a growing factor driving defections?

To be sure, we might not be able to assess the relative competitive impact until there is simply no question that economic softness is causing the slower growth.

Comcast Won't Bid for 700-MHz Spectrum

Some financial analysts and investors had been worried that Comcast would do so, further depressing its battered stock price.

30,000 Orange iPhones Sold in Less than a Week

France Telecom's subsidiary mobile carrier Orange saysit has sold 30,000 Apple iPhones since they debuted in France less than a week ago. In addition, nearly half of the sales are resulting in new subscribers for the carrier. Orange has a year-end target of 100,000 unit sales.