Good Reason to Buy a Wi-Fi-Equipped Smart Phone

On Dec. 11, JetBlue Airways Corp. will begin a trial of free in-flight e-mail and messaging using in-cabin Wi-Fi. If passengers respond positively, the airline said it could install the service across its entire fleet, according to Citigroup analyst Jim Suva.

The in-flight Wi-Fi service will be welcomed by many notebook PC users and owners of Wi-Fi-equipped BlackBerrys or iPhones, since some people travel with a BlackBerry, iPhone or some other smart phone and leave their notebooks at home. That's not me, but other people do it. The relevant BlackBerry devices include the 8210, 8820 and 8320 Curve. You are out of luck if you have service from at&t, though, as at&t blocks Wi-Fi usage on its Curve. T-Mobile supports Wi-Fi on the Curve.

Of course, there apparently is just one single aircraft involved in the JetBlue test. But if it proves popular, and one suspects it will, we can hope other carriers eventually will move to equip their cabins for Wi-Fi.

Of course, the danger is that people will start using VoIP over Wi-Fi, even if cabins aren't equipped for mobile phone use, an idea that many of us absolutely detest. As annoying as mobile phone etiquette now is, it will be unbearable when you can't escape the audio pollution created by your seat mates.

International Long Distance: Merger Wave Coming

Look for a wave of mergers and outsourcing in the international long distance business in 2008. The issue is that voice traffic growth is slowing sharply after decades of rapid growth. That means more volume is needed to keep a business cash flow positive or profitable. Not every global carrier will be able to attain that level of scale, so executives are going to have to consider buying wholesale capacity and abandoning operation of their own networks.

That, of course, is a business opportunity for wholesalers with the ability to handle a large amount of additional traffic.

International voice traffic grew approximately 15 percent annually, from less than 18 billion minutes in 1986 to just under 300 billion in 2006. But international calls grew only 10 percent in 2006, and signs point to continued sluggish growth in 2007.

Skype and other computer-based voice services are a key reason for the slowdown. "Skype only accounts for a small share of international calls, but the volume was enough to cut global growth in half," says TeleGeography analyst Stephan Beckert.

France Telecom: Flat Organic Cash Flow for '08

In confirming its 2007 organic cash flow target of 7.5 billion euros and setting the same level for 2008, France Telecom executives also point out how hard it is for large incumbent service providers to achieve organic growth inside their present service territories, without expanding out of region.

France Telecom says it will achieve organic cash flow at this level as long as it also hits the same operating margin and maintains investment expenditure at about 13 percent of revenues and maintains the same 2007 dividend distribution rate at between 40 and 45 percent of organic cash flow.

Growth will occur "beyond 2008 and over the medium term," France Telecom executives say.

But growth might not be a problem only the largest incumbents have. SureWest Communications has acquired an out-of-market broadband provider, Everest Broadband, in Kansas City, marking SureWest's first-ever move outside its metro market, aside from the competitive local exchange carrier operations SureWest conducts in the broader Sacramento market, where it competes with at&t.
Growth, despite a management team's best efforts, seems now to be a matter of expanding out of territory. The corollary might be that internal, organic growth is stalled. Presumably, internal new services initiatives will have time to catch on while most companies look to acquisitions to fuel near-term growth.

Text Messaging Growing 37% a Month

U.S. text messaging (SMS) traffic volumes have increased at least 37 percent a month since 2003, according to CTIA researchers. Usage also is significant across many age categories as well. About 19 percent of users are 18 to 24; 24 percent are between 25 and 34; 22 percent are between 35 and 54 and 19 percent are between 45 and 54.

As of December 2006, over 18.5 billion text messages are sent every month and that number has grown by 250 percent each year for the last two years.

Verizon Wireless anticipates the number of text messages sent by their users on their network to grow nearly five times from 400 million per month in July 2005 to over two billion per month next year.

Apple to Gain Share

Apple's Macintosh computers are poised to make sizable market share gains in the coming months, according to ChangeWave Research.

ChangeWave says it sees continuing momentum for Apple's Macs among both consumer and business customers.

ChangeWave recently conducted two surveys that gauged PC-buying plans over the next 90 days, a period running from the holiday shopping season into first-quarter 2008. It polled members, who tend to be more tech-savvy and have higher disposable incomes than the general public.

The latest poll found that 29 percent of likely notebook and desktop PC buyers in the next 90 days are planning to get a Mac. That's higher than consumer purchase intent for HP laptops (21 percent), HP desktops (24 percent) and Dell laptops (28 percent).

Two years ago, 16 percent of likely notebook PC buyers and 11 percent of desktop PC buyers planned to buy Macs. Demand for Macs has risen steadily ever since.

More consumers are buying Macs because they're turned off by PCs using Microsoft's Windows operating system, Changewave analysts say.

A separate ChangeWave poll of corporate PC buyers found increasing demand for Apple as well. For companies planning to buy computers next quarter, seven percent of laptop buyers and six percent of desktop buyers plan to get Macs. That's up from four percent of laptop buyers and three percent of desktop buyers two years ago.

Do Mobile Phones Cause Cancer?

Though the evidence is contested, indeed many will argue highly contested, research studies on the effect of mobile phone use on cancer, especially those funded by the industry, continue to suggest there is no danger. Indeed, some scientists argue that non-ionizing radiation typical of cell phone use could not cause cancer. The problem is that not every study suggests there is no correlation.

Regular use of mobile telephones does increase the risk of developing tumors, a new study by Israeli researchers published in the American Journal of Epidemiology finds.

An extract of the report reported by Israel's Yedoit Aharonot newspaper put the risk of developing a parotid gland tumor nearly 50 percent higher for frequent mobile phone users, those who talk more than 22 hours a month.

The risk was still higher if users clamped the phone to the same ear, did not use hands-free devices or were in rural areas.

The study included 402 benign and 58 malignant incident cases of parotid gland tumor diagnosed in Israel at age 18 years or more, in 2001 to 2003.

The research was led by Dr Siegal Sadetzki, a cancer and radiation expert at the Chaim Sheba Medical Centre in Israel and as part of a World Health Organisation project.

Note that levels of usage identified as dangerous were 22 hours a month. As with many other studies, the potential danger has to be kept in perspective: sometimes it takes really unusual dosages of an irritant to trigger a negative result. In this case, we are talking about 44 minutes of use in a 30-day month. That won't appear excessive to many dispassionate observers.

Some researchers (such as Friedman and Richter)point out that there is a high degree of potential conflict of interest in the funding of studies showing that cell phone usage is safe.

Studies published in the New England Journal of Medicine and the Journal of the American Medical Association during 2001, for example, found a strong association for studies whose authors had an economic conflict of interest and also reported there is no danger from cell phone use. The association between industry-funded research and findings of "no threat" were associated with a greater than 99.9 percent level of confidence.

Maybe texting isn't such a bad precaution?

Observers cite:

1. Schutz J, Boehler E, Berg G, et al. Cellular phones, cordless phones, and the risks of glioma and meningioma (Interphone Study Group, Germany). American Journal of Epidemiology 2006;163:512–20.

2. Hardell L, Carlberg M, Mild KH. Case-control study of the association between the use of cellular and cordless telephones and malignant brain tumors diagnosed during 2000–2003.

3. Hardell L, Carlberg M, Hansson Mild K. Pooled analysis of two case-control studies on the use of cellular and cordless telephones and the risk of benign brain tumours diagnosed during 1997–2003. Int J Oncol 2006;28:509–18.

4. Friedman LS, Richter ED. Relationship between conflicts of interest and research results. Journal of Gen. Internal Medicine 2004;19:51–6.

Indian Wireless Firms Structurally Separate

Three Indian Wireless companies have concluded that owning and operating layer one infrastructure is not essential for retail operations.

Bharti Infratel Ltd., a unit of Bharti Airtel Ltd., is merging its telecom tower business with Vodafone Essar Ltd. and Idea Cellular Ltd.

The three companies will form an independent tower company called Indus Towers Ltd. that will provide passive infrastructure services in India. Bharti and Vodafone Essar will hold 42 percent each of the company, and Idea will own the remaining 16 percent.

Passive infrastructure services include towers, shelters, cooling systems, power supply and other items that enable telecom systems to work.

The new firm will merge the passive infrastructure assets of the three companies across 16 telecom territories in India and will initially have about 70,000 telecom sites, the statement said.

The move parallels "structural separation" (creation of a legally distinct and separate wholesale facilities company) more than "functional separation" (creation of an owned wholesale facilities company). Still, the move is interesting given the move to functional separation in Europe, where wholesale facilities are run by one entity, and all retail providers lease capacity and features to run their retail operations.

The move by the three wireless service providers mirrors a broader change in the global communications business from a completely vertically-integrated model to a partially horizontally-integrated model. Basically, communications networks increasingly operate the way data networks do, with applications running on top of facilities that are owned by many different entities in the value chain.

You might call this a move to more "open" networks, and indeed that is precisely what is happening, in small steps.