EchoStar, Dish Now Separated

EchoStar has completed the spin-off of its set-top box business into a new a company called EchoStar Holding Corp. The parent company, which now consists primarily of its satellite TV broadcasting business, will change its name to DISH Network Corp., and keep DISH as it stock symbol.

The transaction makes Dish a pure-play video entertainment provider, and arguably a cleaner asset for an acquirer or merger partner. There has been much speculation about an at&t purchase, but that seems unlikely given at&t's recent decisions about its stock buybacks, acceleration of its U-verse deployment and dividend increases.

The earlier proposed merger of Dish with DirecTV didn't pass regulatory muster, in part because the market was defined as "satellite TV" rather than multichannel video entertainment. At some point, as telcos gain more video market share, that argument might not be so compelling, and Dish and DirecTV might be allowed to merge.

Given that the consumer market increasingly is dominated by triple play, dual play and quadruple play providers, and where each of the services markets increasingly are saturated, regulators might take a fresh look at allowing the two satellite providers to merge.

The Dish Networks separation from the the EchoStar set-top manufacturing operations will help.

at&t Naked DSL Available

As part of its obligations as the acquirer of BellSouth, at&t was required to offer naked DSL--DSL sold without the requirement to buy a phone line--before the end of 2007. It appears to have done so, offering $19.95 DSL-only service on December 20.

The service is referred to as DSL Lite, and must be made available for the next 2.5 years. The company probably will not go out of its way to let consumers know it is available, or how to get it. And there are no assurances the product still will be availabe when the 2.5 year period is over.

Given the likely state of broadband access penetration by that point, at&t will have to keep doing so. In a couple of years, about the only way any service provider is going to get a broadband access customer is to take one away from another provider.

In Europe, where stand-alone DSL services are more readily available, penetration ranges as high as 30 percent.

Call Centers, Leaky PBX, Grey Markets

There are lots of reasons entities set up call centers: sell products; answer questions; technical support; fund raising; set up appointments.

Or, in some cases, to create not-quite-legal terminations for international long distance. Sometimes known as "leaky PBX" operations, the motivation for doing so is money. Significant amounts of money.

By some estimates, 30 percent or more of inbound global calls to Indian numbers are terminated outside the carrier-to-carrier settlements regime.

Estimates of traffic that skirts the settlements regime range upwards of 3.5 billion minutes a year or $150 million to $300 milliion a month that otherwise would have been earned by a licensed carrier.

In recent years, global carriers have paid Rs 5.50 in termination charges to an Indian domestic telephone company. In a leaky PBX or "grey market" operation, a service provider launders the traffic, making it look like a local call, avoiding the termination charges. This saves the global carrier about half what it otherwise would have paid. And the local termination network gains revenue because it makes money from the higher volume of traffic it gains.

The most popular grey market routes serve mobile phone traffic in high-cost termination markets. And that's where the call centers come in.

Grey routes often are created by call centers, as VoIP in some markets is legal when it is IP-based endpoint to endpoint. Until the laws change, and as India market mobile penetration climbs, so will the grey market.

"Nothing But Net"

Online ad spending is growing at a faster rate than broadband access, according to PMorgan Internet analyst Imran Khan. In a nutshell, the story is that Internet stocks will do well in 2008.

JPMorgan expects 34 percent earnings growth in 2008 for the Internet stocks it covers versus 8 percent earnings growth for the S&P 500.

From my perspective, the story is that online advertising is going to grow because attention is shifting that way. And advertising follows attention.

A Must-Attend Conference

If you are the sort of person who is very interested in the future of IP applications as they relate to the global telecom business, EComm, to be held in March in San Jose, is going to be a "must-attend" event. Go to the link at the bottom of this post to get the details. Check it out. Register.

Aside from the quality of the program, I am compelled to note that this is a bottoms-up, user-generated event with no corporate sponsorship. It is the community pulling itself together, with Lee Dryburgh doing the heavy lifting. We need your support, in the form of your attendance.

You won't agree with everything you hear. But you will hear from some smart people who spend their time thinking about and building the next generation of communications. Fair and balanced. Policy advocates, telcos, application developers, consultants, solution providers.

Up close and personal. Some of you know I am a huge fan of smaller, intimate meetings where people get to talk to each other a lot. This will be that kind of place. Get there.

Confirmed speakers:

Lee S Dryburgh, SS7 Networks Limited
Martin Geddes, STL
Tony Nadalin, IBM
Phil Wolff, Reef9 Media
Brough Turner, NMS Communications
Sean O Sullivan, mySay
Ken Banks, kiwanja.net
Gary Miner, MIR3, Inc.
Stanley Chia, Vodafone
Thomas Huhn, Solution Media
Michael Codini, VoiceObjects, Inc.
Shidan Gouran, Jazinga Inc.
Blaine Cook, Twitter
Evan 'Rabble' Henshaw-Plath, Yahoo! Brickhouse
Kellan Elliott-McCrea, Yahoo! Inc.
Shai Berger, FōnCloud
Dean Bubley, Disruptive Analysis
Anders Carlius, TerraNet
Johannes Ernst, NetMesh
Michael Roth, British Telecom
Adrian Cockcroft, Netflix
Mark Rolston, Frog Design
Kevin Nethercott, LignUp Corporation
Ken Rehor, VoiceXML Forum
Thomas McCarthy-Howe, The Thomas Howe Company
Brian Capouch, Saint Joseph's College
Matthew S. Hamrick, Homebrew Mobile Phone Club
Stipe Tolj, Kannel Software Foundation
Rocky Nevin, DataSea, Inc.
Piotr Cofta, British Telecom
Norman Lewis, Wireless Grids Corporation
Ram Fish, Trolltech
Blaine Cook, Twitter
Sheldon Renan, Vision (+) Strategy
James Body, Truphone
Jim Van Meggelen, Core Telecom Innovations
Paul Amery, Skype
Tim Panton, Westhawk Ltd
Gabriel Sidhom, Orange-FT Group
Moshe Maeir, The Flat Planet Phone Co.
BJ Fogg, YackPack
Simonie Wilson, Open Methods
Michael Roth, British Telecom
Peter Saint-Andre, XMPP Standards Foundation
Michael Shiloh, OpenMoko
Marc A Smith, Microsoft Research Internet Services Research Center
Boaz Zilberman, Fring
Bob Frankston, Frankston Innovating
Mark Cooper, Consumer Federation of America
Kevin Nethercott, LignUp Corporation
Fabrizio Capobianco, Funambol
Koushik Chatterjee, Embarq
Sam Aparicio, Angel.com
John Waclawsky, Motorola
Michel Bauwens, P2P Foundation
Michael Codini, VoiceObjects, Inc.
Amit Desai, Dial Directions, Inc.
Dawn Nafus, Intel
Nathan Eagle, MIT Design Laboratory
Jeff Bonforte, Yahoo! Inc.

Do People Want Dual Mode, Convergence?

Dean Bubley has a nice list of things that will happen in the wireless market this year. Several caught my eye, one of them being that in our rush for all things "converged," we might be missing something, and taht is that people might be better at managing multiple devices, numbers and identities than we usually give them credit for.

Bubley argues that suppliers and service providers have a hard time creating the "one device that does everything" because, in fact, "people are happy with complexity."

"People like multiplicity," Bubley argues. "They want multiple service providers."

Some people certainly seem not to mind complexity, multiple bills or providers. Others probably prefer to buy in a sort of "best of breed" mode, despite some incremental friction.

I suspect that although lots of people say they like triple play services because it is more convenient using one provider instead of three, the adoption driver really is the discount.

The issue here probably is that many attempts to converge functions, identities and so forth involve some compromises, some effort and some limitations. People might be willing to put up with some amount of complexity or effort to get more choice.

But not much. According to the Reuters news service, half of all malfunctioning products returned to stores by consumers are in full working order, but customers can’t figure out how to operate the devices.

Product complaints and returns are often caused by poor design, but companies frequently dismiss them as “nuisance calls,” Elke den Ouden found in her thesis at the Technical University of Eindhoven in the south of the Netherlands.

The average consumer in the United States will struggle for 20 minutes to get a device working, before giving up, the study found.

Sprint Settles Patent Infringement Suit

...and it doesn't involve Vonage. A subsidiary of Acacia Research Corp. and Sprint Nextel Corp. have settled a lawsuit alleging that Sprint Nextel had infringed on four patents for technology used to display mobile vehicle information on maps. No terms were revealed.

Telecom has been a tough business for a decade. But operations seem to be getting riskier in the service provider business, for reasons that used to be an issue primarily for hardware and software suppliers.