Belgacom Eyes Cable

A growing strategic reality in the global telecom business is the need to "go out of region" to fuel growth. Belgacom, for example, is offering €420m to the cable companies and municipal shareholders of the Belgian cablenet Interkabel.

In a statement the incumbent telco said that its offer was €70m more than had been made by its rival Telenet and 40 percent more than the upfront payment offered to the municipalities.

In this case there is the additional tactical consideration of buying customer base and revenue that is denied a key in-region competitor.

But make no mistake: organic growth is slow, tedious work these days. Leaps occur mostly through acquisition.

Sprint Churn Bottoming?

Sprint Nextel has lost one million customers since the end of 2007, a fact mirrored in surveys of ChangeWave Research members.

The more important news, though, may be a possible bottoming. It is possible Sprint finally has stabilized its churn problem.

In March 2008, for example, a survey of 3,597 consumers found 11 percent reporting they are Sprint Nextel customers.

Some 31 percent said they use Verizon while 28 percent reported using and AT&T. To be sure, that indication of market share among survey respondents does not track very well with other measurements of market share, such as the carriers own quarterly and annual reports of subscribership.

No surprise: Sprint customers are least satisfied of all of the major provider customers. When asked how likely they were to change service providers in the next 6 months, a relatively high percentage of Sprint customers (21 percent) said they're likely to switch, compared to just 10 percent of Verizon customers and 11 percent for AT&T' users.

When people do change cellular service providers, very few are switching to Sprint (three percent ). The good news is that the number of switchers looking to join Sprint actually turned up one percentage point since the last ChangeWave survey.

iPhone Sales to Triple?

Right now it's hard to say for sure, but there's sound logic behind predictions that Apple now will attempt to dramatically increase sales of iPhones, now that carriers are subsidizing the device. The rationale?

Richard Windsor, Nomura analyst, notes that higher volumes are necessary. "Apple must increase its volumes very substantially to make up the difference” between what it was making before, and what it will be making now on subsidized devices, without a recurring revenue share.

Windsor notes that a dollar from revenue share has EBIT margins of 100 percent, while hardware revenues have an EBIT margin of closer to 30 percent.

So a simple back of the envelope analysis suggests that if Apple wants revenue to grow, it will have to sell three times as many devices at the lower margins, to make up for what it might have earned under the old business model.

Cheaper iPhone = Digital One Rate

Some of you may remember "Digital One Rate," the first "bucket of minutes" wireless voice plan, launched by AT&T when Dan Hesse, now Sprint Nextel CEO, ran the AT&T Wireless business. You might also remember that Digital One Rate ignited a huge wave of wireless voice usage.

It is conceivable that the new 3G iPhone, with price points aimed at the "the other side of the chasm" crowd (the mass market), as well as the inevitable responses by competitors, could well ignite a new round of data services use by fairly "average" mobile users.

A $200 iPhone with 3G is just the sort of thing that could trigger dramatically-expanded mobile Web and mobile broadband use, driving smart phones and mobile Web services into the lead edge of the "early majority" market that mobile providers will have to crack if 3G is to become a user mainstay.

With the latest release, Apple is taking aim at the enterprise segment, one of several key smart phone segments, as well as the broader "entertainment-focused" segment. Some of us are in the less-well-defined segment that rely relies on the Web, even if we use BlackBerries, so the mobile Web element also now comes into play.

The point is that the 3G iPhone might one day be seen as a key turning point for mobile broadband.

iPhone, Other Devices Will Drive Data Revenue to $70 Billion

Goldman Sachs analysts Simona Jankowski and Thomas Lee now predict there will be 15 percent compounded annual growth in revenue in smart phones over the next five years as a result of “more affordable smart phone devices and focus by handset vendors following iPhone.”

That will result in increased email, Web and other data uses, leading to a ballooning of telecom services revenue, from $19 billion last year to $70 billion in 2012.

BlackBerry Vs. iPhone

The most-important take-away from the new 3G Apple iPhone announcement is the lower prices, which we flagged up as a barrier to uptake in the first version, says Steven Hartley, senior analyst at Ovum. But Alec Saunders over at Saunderslog.com thinks BlackBerry will start to feel some real heat, now that it is clear the iPhone and BlackBerry devices will be priced head to head.

Many of us BlackBerry users might concur, but also might note that we are quite attached to the reliability of key entry. If Apple can do just a bit better on that front, many of us will find few barriers to switching. Right now, it remains an issue.

YouTube for Business

Cisco is announcing what will surely be seen as "YouTube for business." Enterprise TV, a new YouTube-like video posting and viewing service aimed at enterprises, aims to make it easier for companies to do everything related to video: creating it, capturing it, and playing it.

Employees can capture video of meetings or training programs and upload it immediately to their enterprise networks, where employees can watch it on demand.