VoIP, WANs, IPTV, Mobility Will be Supplier Bright Spots in 2009 and 2010

It now appears 2009 and 2010 will not be happy years for suppliers of equipment and software to many segments of the global telecom industry, though investments in backbone capacity, IPTV, mobility and VoIP will be salient exceptions. 

Releasing its latest market forecast, the Telecommunications Industry Association predicts U.S. carrier capex spending will be down 13 percent in 2009, compared to 2008. 

Global capex spending will dip about 3.1 percent, TIA says. 

A recovery in spending will occur in 2010 and 2011, TIA now projects, and U.S. capex will climb about 14.4 percent when the rebound happens. 

As you might expect, spending will vary by segment and by growth prospects in each segment. U.S. landline infrastructure spending will decline about 11 percent in 2009, but there also will be a 15 percent growth in backbone spending. Operators will spend about 27 percent less on access. 

Spending on wireless infrastructure and broadband will climb, however. Indeed, spending on IPTV and VoIP will grow 42 percent in 2009. 

None of these projections address service provider revenues, though, and are limited to capital spending programs by service providers. So far, first quarter 2009 service provider reports suggest service providers, as an industry, are on track to grow revenue in 2009, compared to 2008.

More Competition in Rural Markets Likely

Whatever else might happen with the broadband stimulus program, odds are that the spending of those funds will increase the amount of competition in rural markets. The reason is simple enough: cable, mobile and fixed wireless service providers are likely to apply for grants under the programs, and it is likely some will receive funding.

The American Cable Association, an industry group for small independent cable operators, probably will make a fairly significant play for funds. To be sure, many rural telcos also run separate cable system operations. But even where an in-region telco gets funds to support its in-region cable operation, increased broadband access from the cable unit will dampen demand for telco-provided broadband.

It isn't clear whether fixed wireless providers will apply, but there are many hundreds of small Internet service providers using fixed wireless to provide broadband in rural and thinly-settled areas. Also, depending on the final language adopted, larger mobile providers might be able to apply as well.

The impact might not be felt immediately. It is possible many competitive networks will get funding to support operations in nearby communities, if not directly in rural areas.

But we all know what happens when an incumbent in one area looks for growth. The answer in rural areas tends to be expanding service into adjacent or nearby communities. So stimulus funds might allow providers to fortify their backhaul and other assets enough that later access operations in nearby communities are more feasible.

AT&T Goes Nationwide with Subsidized Netbooks

People sometimes think the real "problem" with broadband is that it isn't available. In fact, there is growing recognition that adoption (demand) is the primary issue. And about all it takes to boost broadband usage is to make it easy, affordable and even a bit fun. 

AT&T, for example, has announced it is adding mobile broadband equipped Acer, Dell and Lenovo netbooks to its standard line of products this summer. AT&T began testing sales of 3G-equipped netbooks in its retail stores in April. Based on the successful results, AT&T is going nationwide. 

Pricing for the nationally-available offer are not yet available, but AT&T in "limited trials" has been offering a netbook for a $49.99 in Atlanta and Philadelphia test markets. To get that price, users sign a two-year contract for wireless and wired Internet access.

In the test markets the Acer Aspire One, Dell Inspiron Mini 9, Dell Inspiron Mini 12 and LG Xenia were available. 

Prices for the netbooks start at $49.99 and go up to $249.99 with a purchase of AT&T's Internet at Home and On the Go plan, which starts at $59.99 per month. Customers who just wanted the netbooks could buy them for $449.99 to $599.99.

A third option, DataConnect only, allowed users to buy netbooks starting at $99.99 and going up to $349.99, with purchase of a 3G DataConnect plan costing $40 to $60 a month.

“It’s clear there’s a demand for mini laptops,” says Ralph de la Vega, AT&T Mobility and Consumer Markets president and chief executive officer says. “We’re getting interest from tweens, teens, young adults, moms on the go and small business owners."

High-Definition Voice: Most Impact in Conferencing Apps

A poll of 186 industry professionals shows a belief that high-definition voice quality will have greatest impact for video conferencing and conference calling.

The Global IP Solutions-sponsored poll also shows that a third of respondents think high-definition voice quality also will benefit overall productivity in the workplace, while 57 percent considered conference calling would benefit the most in a work setting.

About 16 percent believe high-definition audio will have greatest impact for call center operations.

Some 11  percent of respondents say they use high-definition voice service “all the time or whenever they can” and an additional 30 percent reported having used it once or twice.  About  47 percent of respondents have not used it yet.

AT&T Launches "Synaptic Storage" Cloud Service

AT&T now is selling enterprises a new "AT&T Synaptic Storage as a Service", a storage-on-demand offer that provides enterprise customers with control over the storage, distribution and retrieval of their data from any location, anytime, using any Web-enabled device.

The service automatically scales storage capacity up or down as needed, and users pay only for the amount they use, AT&T says.

AT&T is introducing the service to customers on a controlled basis this month, with plans to make the service generally available in the third quarter. The service is deployed in AT&T Internet data centers (IDCs) in the U.S. and will be accessible by customers connecting to the Web anywhere. In time, AT&T plans to add the service to select global IDCs to meet customer demand internationally.

http://www.att.com/gen/press-room?pid=4800&cdvn=news&newsarticleid=26821

"Build it and They Will Come..." Again?

"Build it and they will come" became a demolished business strategy in the global bandwidth business, even though for a brief moment around the turn of the century, people believed that to be the case.

Still, the logic behind fiber-to-the-home projects in many ways represents the same sort of thinking. "New applications will flourish on a 100Mbps FTTP rollout even though nobody knows what those apps will be," says Khoong Hock Yun, Infocomm Development Authority assistant chief executive, and reported by CommsDay.

Still, it might still turn out to be correct, at least for providers of access connections, at some point. FTTH Council of Europe President Karel Helsen argues that content, gaming and entertainment companies now aer being invited to join the FTTU Council.

“If you provide the pipes, people will make sure that they fill it,” Helsen says. "Companies such as Nintendo, Sony, and Time Warner we welcome into our council and we’ve started talking to those companies since the beginning of this year.”

“We just had the first gaming association also join the European council and we believe also by having those people as members, you also create the pull effect from the market side to stimulate the rollout of fiber to the home,” Helsen says.

That isn't to argue such networks should not be built, or that new revenue-generating applications will not ultimately be developed. But it is likely to take some time.

Goodbye Sarbox?

The Supreme Court apparently is going to test the constitutionality of Sarbanes-Oxley rules. Personally, I hope the Supremes do rule that way. Sarbox has been a major burden for smaller and mid-sized firms, adding millions of dollar in annual cost, in many cases, and killing the Initial Public Offering market. 

http://www.businessinsider.com/henry-blodget-supreme-court-may-kill-sarbanes-oxley-and-resurrect-ipo-market-2009-5