IP VPN Prices Not a Commodity

IP VPN prices vary dramatically, by service provider, by country, and by class of service, TeleGeography finds. For example, while the median price of a 2 Mbps E-1 IP VPN port in London was USD 576 per month in Q1 2008, a comparable connection would cost USD 1,034 in Hong Kong, USD 2,871 in Beijing and USD 6,083 in La Paz, Bolivia.

The wide range of prices quoted by telecommunications companies for similar services within a given city suggests that telcos, too, are having a difficult time finding appropriate prices for their services. For example, in Beijing, prices for 2 Mbps VPN ports varied from just over USD 1,300 per month to nearly USD 5,000 per month.

The rate of price change also varies widely by market. The median monthly price of a 1.5 Mbps T-1 port in Atlanta fell 19 percent from USD 580 to USD 470 between the second quarter 2007 and first quarter 2008.

In contrast, the median E-1 port price in Dubai, one of the most expensive markets tracked by TeleGeography, fell only four percent, from USD 16,538 to USD 15,877.

"The tremendous range and variability of prices reflect that this market is neither transparent, nor commoditized," says TeleGeography analyst Gregory Bryan.

TW Telecom, AT&T Rebranding Costs

TW Telecom--formerly Time Warner Telecom--will have to spend between $6 million and $7 million to re-brand the 2,800-employee company. Of course, it could be worse. AT&T executives have not to my knowledge ever said what it actually cost to conduct a number of big rebranding exercises.

When SBC Communications was rebranded as AT&T, the cost was said to involve spending of about $1 billion. But that appears to be the most-affordable of recent efforts. When AT&T Wireless was rebranded as Cingular, the move is reported to have cost $4 billion. Some three years later, Cingular went back to AT&T, for possibly another $2 billion.

There have been other, arguably less-expensive rebranding efforts as well. There was the cost of rebranding BellSouth as AT&T, said to have cost as much as $2 billion. One has to assume the rebranding of Ameritech as SBC cost at least $1 billion. Add on the earlier rebranding of Pacific Telesis as SBC as well.

Add it up and rebranding probably has cost about $9 billion. Of course, some of that money would have been spent on the original brand names in any case, so it is not as though all of that was incremental spending.

Still, it's a huge expense. And then there's the brand equity partially represented on balance sheets in the form of good will. As they like to quip in the Congress, a billion here, a billion there; pretty soon it's real money.

T-Mobile 3G 20-City Launch in October?

CNet speculates that T-Mobile USA will include a Google Android phone as part of its nationwide 3G wireless network launch in perhaps 20 to 25 markets later this year, and perhaps as early as October.

T-Mobile reportedly plans to include the HTC Dream smartphone as one of its first 3G phones to launch with the network, according to reports.

T-Mobile started offering 3G service in New York City in May. And the company said at the launch that it would roll out the service in other top markets by the end of the year.

The Sony Ericsson Z780, a high-end Samsung cameraphone, and possibly the Motorola ZINE ZN5 also are reportedly to be offered.

Xohm Pricing Model

It's hard to say what might develop if and when the new Clearwire, incorporating Sprint Xohm and Clearwire assets, actually launches new unified offers. For the moment, as Sprint rolls out its WiMAX network in Baltimore, we should expect a la carte usage plans, much on the casual Wi-Fi model.

Sprint has said it will break with the traditional mobile model and offer service without contracts and termination fees.

So far, it seems as though monthly service will be priced around the going rates for comparable digital subscriber line and cable modem services.

Ofcom to Thread Fiber Through a Needle

Ofcom, the U.K. communications regulatory authority, will try to thread a needle this fall as it prepares to create a new framework encouraging fiber-to-customer deployment. On one hand, it wants to convince BT that a reasonable financial return can be earned if it deploys fiber-to-customer network.

On the other hand, Ofcom seems committed to a wholesale regime that allows competitors access to the network. And therein lies the problem. BT will want some assurance that wholesale rates resemble as closely as possible those it might get at commercially negotiated rates. That likely means relatively minimal price control.

BT's competitors will want healthy discounts that mirror what they currently can get for DSL infrastructure. Ofcom likely won't allow that, as such discounts arguably create too much uncertainty about rate of return.

That's a pretty tight needle to try and thread.

We Hold These Truths to be Self Evident

We hold these truths to be self evident; at all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.

Broadband Growth Strongest in $20,000 to $40,000 Households

Broadband adoption rates between 2007 and 2008 were highest among households with annual income between $20,000 and $40,000, according to new research by the Pew Internet and American Life Project.

The only income group to experience declining broadband penetration was the less-than-$20,000 income group, which includes college students as well as other lower-income households.

The other notable divergence from growth rates in the 15 percent to 24 percent growth rates were among households with annual income above $100,000, where four percent growth was the norm. It is probably fair to say that wealthier households largely have adopted already.