VoIP Inc. Gets Out

VoIP, Inc. has gotten out of the independent VoIP business as a provider of services that replace standard phone line service. It has decided instead to recast itself as a provider of "click-to-call" applications. The Company therefore has suspended all of its telecommunications network operations including all current revenue generating operations.

The company also reduced its workforce by 25 persons, eliminating most of its network operations and software engineering staff.

Some participants in the U.S. VoIP marketplace think the next two years will see the demise of most of the independent U.S. providers who do not own their own access networks. The average revenue per user is simply too low, the profit margin too thin and the volumes too low.

Hoping is not a business plan.

Content, TV Display Key to Online Success

The most-important things online movie download services can do to succeed is offer a broad selection of content and make it possible to view that content on TVs, which is the expectation users now have for movie content. That's because the single most important ingredient for success for any video offering is the content.

That isn't to say content pitched to mobiles or PCs can't find a niche. It is to say that the broad mass market for online-delivered movie viewing won't become a mass phenomenon until user behavior is consistent with what consumers expect today.

"When it comes to movie rentals and purchases, the quality of content matters," say analysts at The Diffusion Group. The second crucial element is that "getting video downloads to the TV is absolutely imperative."

The ability to view movie downloads on any TV in the home is of critical importance, both to those that have used online movie download services and those likely to do so soon, The Diffusion Group says.

The use of mobile phones for video viewing is not considered sufficiently desirable to justify using an online movie download service, Diffusion Group researchers find. "As such, cell phone video viewing will not in-and-of-itself be a compelling attribute for an online movie download service, especially of full-length movies.

And there's a difference between users and proponents. Proponents emphasize the interactive capabilities online content enables. But users don't seem especially enamored of those sorts of features, as fond of them as interactive proponents are.

Adult broadband users don't agree. "Only 28 percent rank this attribute positively and 42.3 percent rank it unimportant," Diffusion Group researchers say.

Price Per Megabit: Japan and France Lead

When observers talk about places where broadband access is both fast and affordable, Japan is certain to come up. Maybe they should talk about France. As this chart created by the Wall Street Journal shows, French users can buy broadband at prices per megabit that are quite close to what users in Japan are able to do.

Also, despite all the whining about how far behind the rest of the world the U.S. providers are, it doesn't really appear such sentiments necessarily are based in fact. Over the last year, cable and telephone companies have been boosting capacity while holding prices steady. And that provides a much better "price per megabit" relationship.

Wireless Overtakes Wireline This Summer

Mobile voice volume will overtake fixed in Western Europe by mid-year, researchers at Analysys now predict. The proportion of call minutes made from mobiles has increased by 1.4 percentage points each quarter over the last year.

In the United Kingdom, where patterns of consumption are close to the European average, mobile voice usage should overtake fixed voice in the second quarter of 2008.

In France, mobile voice usage has already surpassed that of fixed voice, and keeps growing despite the widespread availability of practically free voice over broadband.

On the other hand, mobile voice is not expected to overtake fixed voice in the Italian market until the first quarter of 2009. The German market will not experience this phenomenon for about two years.

Portugal, having the lowest voice consumption in Western Europe, was the first country in which mobile overtook fixed, while Sweden, which has one of the highest, will be among the last to change, Analysys researchers say.

For mobile providers, price is the trick. Once wireless calling costs are low enough, users seem well able to act on the relative value-price perceptions wired voice and wireless represent. In many cases, those users show a strong preference for mobility.

Cell Phone Recycling: 10 to 34%

During the fourth quarter of 2007, U.S. consumers buying new mobile handsets recycled their old phones at double the rate that they did in the third quarter. Still, that's just 9.4 percent of devices, says iSuppli Corp.

But recycling behavior might be higher than that, if all sources of reuse are considered, and if respondents are being truthful. Considering phones given to friends or family members, donated to a charity or returned to a phone retailer, about 39 percent of phones are recycled or reused.

The easiest way to recycle a phone is simply to take it to your provider's retail store. In most cases they'll supply you with a postage-paid mailing envelope, which you then drop in a postal box. Some Best Buy outlets have permanent recycling bins for PC batteries, ink cartridges and mobile devices (phones or personal digital assistants).

About 36.8 percent of respondents polled by iSuppli simply stick the old phones in a closet or drawer. That presumably means the devices later are tossed into the trash, which is where they shouldn't be.

About 15.5 percent of U.S. consumers gave away their old mobile handsets to a family member or friend. Another 8.5 percent of consumers donated their handsets to charities.

About 5.7 percent said they returned their old phones to the retailers where they originally bought them. Some 3.1 percent sold their old phones.

The U.S. Environmental Protection Agency (EPA) estimates Americans discard 125 million phones each year, creating 65,000 tons of waste.

So Maybe Verizon is Bidding Against Itself

After round 40 of the Federal Communications Commission's auction of 700 MHz airwaves, Verizon might be bidding against itself, in a sense. Observers say it is possible for Verizon to bid directly on each of the eight regional allocations that make up the national C block. And if any contestant has the highest bid in a region, it wins the spectrum even if some other entity has the highest overall bid for the entire C block.

In this scenario Verizon would simply have to ensure that its regional bids were high enough to top the amount any other player submitted for the entire national spectrum. Clever.

FCC Auction: Who's Bidding on C Block?

At the end of round 39 of the Federal Communications Commission's auction of the national C block of 700 MHz spectrum, it appears at least two entities continue to bid.

The top bid now is a bit over $4.83 billion, up from the prior high of $4.7 billion at the end of round 38. Some of us think Google has halted its bidding, and most of us think Verizon Communications intends to win the C block. So if all that is true, at least one other company continues to bid against Verizon. Curious.

It's hard to picture at&t bidding for C block spectrum, as observers have predicted it would focus on filling in holes in its 700 MHz spectrum by bidding on local chunks of the B block.