IP Business News - Blogs

Voxbone Launches 883 "Global Local" Service

Gary Kim — Tue, 11 Nov 2008 08:22:02 -0800

Voxbone is launching universal "local" phone numbers on Nov. 11, 2008. Using 883, the new country code established by the International Telecommunications Union, Voxbone will be able to provide service, application or content providers phone numbers that can be called using either public switched telephone network or IP devices and applications, and then terminated on any device or number, while "acting" as a local number.

Think of it as a global toll-free number, a global conference call access number or a virtual local number. You might also think of "iNums" as a way to add voice communications to virtually any Web, enterprise application or collaboration tool.

A call to an iNum number effectively is a local call because no matter where it starts, or on what device or network, the call can be terminated locally, on a standard public network device or Web application.

One might think of iNums as "the first multimedia phone number, usable with presence features," says Rod Ullens, Voxbone CEO.

There are practical advantages for businesses, organizations or applications that must provide local phone numbers in many countries, as it might not be necessary to buy those local numbers from a number of suppliers in each of the local markets.

The new service is an evolution of Voxbone's existing business of providing terminating numbers in more than 5,000 cities in more than 45 countries. Customers typically are communications carriers, VoIP-based service providers, calling card operators and call centers who pay a fixed monthly fee for unlimited inbound calling.

The VoxAPI, Voxbone’s application programming interface undoubtedly will become more important for 883 calling apps integrated with Web sites and software.

Windstream 3Q: No Slowdown, Possible Turning Point As Well

Gary Kim — Sat, 08 Nov 2008 10:00:40 -0800

Windstream Communications third quarter results, like those at Charter Communications, do not yet support the theory that economic stress is changing basic consumer habits in the video entertainment and communications areas. Keep in mind that both companies operate in more-rural areas, so it may be that "big city" and "rural" patterns are diverging.

Windstream added 28,000 new high-speed internet customers in the quarter, bringing our total broadband customer base to roughly 963,000, an increase of almost 16 percent year-over-year, and Windstream executives believe there still is room for additional growth.

Windstream also added nearly 21,000 digital TV customers in the quarter. Long distance service revenue also increased five percent year-over-year.

To be sure, traditional voice lines declined by approximately 38,000, but that was an improvement in absolute lines lost of more than 8,000 units year-over-year. In total, Windstream access lines declined by 4.8 percent year-over-year. But note: Windstream thinks it might finally have turned the corner on landline losses.

Though competition has increased, Brent Whittington, EVP, thinks the company might have "turned the corner" in the third quarter, in terms of landline losses. That would be a significant development indeed.

Though some probably reflexively think telcos will keep losing voice lines forever, logic suggests the losses will stabilize at some point. Keep in mind the example of broadband access. Aggressive cable operator marketing of high-speed access went virtually unchallenged by telcos for some time. Then telcos decided they simply could not ignore getting into the business, despite some qualms about cannibalization of existing special access services.

As it turns out, the cannibalization fear was overblown. T1 lines in service increased even as cable modem and digital subscriber lines proliferated. Something along those same lines will happen once telcos decide it is time to market VoIP and IP telephony aggressively. As a byproduct, the shrinkage of voice lines will slow, then halt.

Maybe Windstream is getting close to that point, even in advance of a major technology shift to IP-based voice.

Charter Results Do Not Show Slowdown

Gary Kim — Thu, 06 Nov 2008 16:12:12 -0800

The problem with isolating economic from other drivers of consumer behavior and provider success is obvious enough when looking at Charter Communications third quarter 2008 results. You can't complain about the results. For the third quarter of 2008, total revenue was $1 billion $636 million, an increase of eight percent over the third quarter of 2007. Phone and high speed internet, Charter's highest margin services, accounted for about 65 percent of Charter's revenue growth in the quarter. Telephone revenues totaled $144 million for the third quarter continuing as Charter's largest revenue growth driver with 55 percent year-over-year growth. For the third quarter our commercial business revenues climbed 16 percent to $100 million driven by the expansion of commercial telephone product in the business bundle. One of the broader assumptions about times of economic stringency is that consumers will be cautious about upgrading service to higher tiers. But that doesn't seem to be the case at Charter. Demand for high definition continued in the third quarter with HD customers increasing nearly 50 percent year-over-year. Orders for on-demand content increased 57 percent and the number of users climbed nearly 30 percent over the year ago period. Orders for the DVR feature was up 33 percent. Charter added 71,000 high speed customers during the quarter, more than 30 percent greater than net ads for the same quarter of 2007. And though you might expect customers to signing up for lower speed, less-expensive services, Charter says that wasn't the case. The majority of net gains came from higher speed products, company executives say. Charter also added about 100,000 telephone customers in the quarter, consistent with year ago net ads, while voice customers increased nearly 60 percent year-over-year. Early indications so far for the fourth quarter suggest that the economy may be having a "modest impact." New connects were down year-over-year. In the first two quarters of 2008 Charter did see losses in the broadcast basic tier, but the trend did not continue in the third quarter. Charter made rate adjustments that might have lead customers to disconnect or possibly upgrade service in the first two quarters. Third quarter customer retention and bad debt were generally in line to favorable with year ago levels, the company says. Charter also increased its marketing spend in the third quarter, spending something like 4.8 percent of revenue on marketing, where Charter typically spends about four percent. So there's some countervailing evidence about the impact of a recession on consumer spending for video, voice and data. Whatever else executives at other companies might think will happen, so far, Charter Communications has not seen anything yet that supports the theory that consumers are downgrading or postponing buying of higher-priced Internet access or video services.

Time Warner Reduces Forecast

Gary Kim — Thu, 06 Nov 2008 07:34:03 -0800

Cable is generally considered to be recession-proof, but Time Warner Cable President and CEO Glenn Britt says its "na�ve" to think that way now, and Time Warner Cable is reducing its 2008 earnings outlook. Still, the pattern of loss suggests nothing out of the ordinary. For the most part, it is service upgrades that are slowing, with a single exception. "As we moved into the fourth quarter, we saw a significant slowdown in subscriber growth compared to last year, particularly for our video and voice services," Britt notes. The operator signed on 124,000 new digital video subs, just under the 128,000 it added a year ago. Time Warner Cable also warned that it has seen orders for premium video services, including pay-per-view, video on demand, and digital video recorders slow down. The MSO added 150,000 DVR subs in the period, off from a year-ago gain of 211,000. One would expect to see that, in a downturn. On the voice front, the MSO signed on 207,000 subs, 25 percent less than a year ago and about 15 percent lower than analyst expectations. It isn't clear whether this reflects economic conditions or a natural slowing of voice segment growth for an operator with fairly high voice penetration already. The MSO lost 31,000 basic video subs, better than the 83,000 basics it lost in the year-ago quarter, ending the quarter with 13.3 million total. Most of the video losses, though, come from the "antenna basic" tier, not the mainstay of a cable operator's video revenue. About 70 percent of the video subscription losses came from the antenna basic package, which runs about $13 per month. Comcast Corp also has reported a sharp fall in basic video subscribers. Comcast's basic video subscribers fell by 147,000 to 24.4 million in the third quarter, a sharper decline than the year-ago period's 56,000 drop. CEO Brian Roberts says the issue is not churn or disconnects but a slowing rate of new additions, caused by the weak economy, competition with phone companies and hurricane impact, which reduced new home construction as well as usability of existing housing. The hurricane impact accounted for 15,000 of the basic video losses in the quarter.

FCC Approves "White Spaces" for Broadband

Gary Kim — Tue, 04 Nov 2008 16:02:16 -0800

The Federal Communications Commission has unanimously voted to approve use of vacant TV broadcast spectrum on an unlicensed basis, clearing the way for development of broadband data devices and services that could be used by businesses and consumers.

The rules permit the operation of unlicensed devices in the TV white spaces on both a fixed and portable basis. Such devices generally must include a geo-location capability, the ability to access a data base of the licensed users and services and spectrum-sensing technology, all to avoid interference with licensed users and services.

Those users include full-power and low-power TV stations and cable system headends.

Wireless microphones will be protected in a variety of ways. The locations where wireless microphones are used, such as sporting venues and event and production facilities, can be registered in the data base and will be protected in the same way as other services.
The Commission also has required that devices include the ability to listen to the airwaves to sense wireless microphones as an additional measure of protection for these devices.

All white space devices are subject to equipment certification by the FCC Laboratory. The Laboratory will request samples of the devices for testing to ensure that they meet all the pertinent requirements.

The Commission also will permit certification of devices that do not include the geo-location and data base access capabilities, and instead rely solely on spectrum sensing to avoid causing harmful interference, subject to a much more rigorous approval process.

Generally speaking, initial devices are expected to operate at lower power. But device manufacturers may continue to provide additional information to the Commission to support the use of higher-power devices in adjacent channels. In addition, the Commission will explore in a separate inquiry whether higher-powered unlicensed operations might be permitted in TV white spaces in rural areas.

The proposal, approved on a five-to-zero vote, is expected to offer new opportunities for broadband data services in both urban and rural areas.

Though some conventional wisdom continues to assert that the United States has a "broadband access" problem, the FCC's decision suggests, along with other data, that broadband access is not a terribly big problem. A recent survey of about 146 rural telcos shows 100-percent availability of broadband. Fully 93 percent of those providers report there is broadband competition already, in their markets.

And now we will have "white spaces" to contend with.

iBasis Introduces Four Wholesale Voice Products

Gary Kim — Sun, 02 Nov 2008 09:23:52 -0800

iBasis has introduced its expanded portfolio of international voice products designed to address the needs of all telecommunications market segments from cost-driven wholesale carriers to retail mobile operators worldwide.

The iBasis portfolio now includes four basic products, each addressing a different market segment. Direct Voice provides wholesale carriers access to iBasis’ lowest-cost routes and direct pricing for highest possible savings, though capacity and coverage are managed to minimize costs. The product is aimed at providers whose primary concern is absolute lowest cost. "Direct Voice gives access to our direct routes at lowest cost," says Chris Lengyel, iBasis product manager.

"We engineer the product so one in three calls might be rejected for rerouting to another vendor or one of our products," Lengyel says. This might the case for some calling card providers or users of Web-based voice features.

One point is worth making: the iBasis wholesale products indicate clearly that voice actually is not a "commodity." There are various kinds of usage, various product segments and different kinds of voice products that are, in fact, not functional substitutes for each other, as would be the case for a genuine commodity.

Value Voice provides increased coverage and greater consistrency of key voice metrics. Value Voice features prioritized vendors to provide more stability of calling experience as well as a broader footprint.

Certified Voice provides full calling coverage, high route stability, call completion and capacity. Certified Voice is sold to consumer VoIP providers such as Skype and cable operators. It is ideal for retail VoIP traffic and "more of a tradtional wholesale product," says Lengyel.

Premium Voice offers mobile and retail operators guaranteed features and exceptional voice quality using direct connections with incumbent carriers and qualified providers. Includes advanced features such as guaranteed calling line information, fax and roaming. "Premium Voice" is sold to service providers whose primary concern is stability and quality.

Premium Voice often is bought by mobile operators because "it cannot fail," Lengyel says.

The new products recognize that some customers want price while others want coverage. Some want stability while others want roaming, fax or guaranteed CLI.

"What you see here is that there are varying levels of quality required for different applications," says Lengyel. "Skype doesn't care about fax or CLI, for example, but voice really isn't a full commodity," he says. "A minute isn't just a minute; there are lots of nuances."

"The mobile space needs quality," he says. "People will pay for quality, for some applications."

MetaSwitch Posts Record Revenues

Gary Kim — Wed, 29 Oct 2008 09:44:40 -0700

Anybody who has been following financial results for MetaSwitch will not be surprised at the results, but Data Connection Ltd., MetaSwitch owner, reported record revenues of $118.1 million for the fiscal year ending August 31, 2008, an increase of 15.4 percent year-over-year, making the company profitable for the 27^th consecutive year.

The company’s MetaSwitch division grew 22 percent compared to the same period last year and now accounts for 78 percent of total Data Connection revenue. Growth was driven by larger tier one carrier deployments and continued expansion of the customer base, to a total of more than 400 service provider and 250 OEM customers.

The key point is that growth was driven by larger tier-one providers. MetaSwitch has reached the point in its growth where it has to move "up the stack" from its historic customer base of independent telcos and competitive carriers in the U.S. market. That means both targeting sales to cable companies and larger telecom providers, as well as moves into markets outside the United States, for the first time.

What happened to IMS?

Scott Wharton — Tue, 28 Oct 2008 21:50:37 -0700

IMS (an abbreviation for the inscrutable "IP Multimedia Subsystems") has disappeared from the landscape. 2-3 years ago, it was all people were talking about in telecom. You had to support it or you were finished. Now? Silence. What happened?

In short, nothing happened. IMS providing little to no advantage over the older architectures. It was (is) too complicated, too expensive, and did not deliver on the promised innovation. Part of the problem was that IMS has collapsed under the weight of it's own complexity. But the other part of the story is that IMS essentially didn't do anything that the prior generation already did.

And most importantly, the carriers have dithered essentially spending the past 10 years recreating the voice network in IP. The portal companies, led by Google, have done all of the innovating. And they've done it without IMS essentially doing an end-run around the telecom industry and graciously using their broadband pipes to deliver all sorts of interesting apps.

IMS is not dead -- it's just totally irrelavent. If the telecom industry wants to be relevant, they will have to embrace applications that people care about and stop getting hot and bothered by over-hyped, over-promising architectures. Bye-bye IMS and good riddance!

Just Like Fiber in the Desert

Hunter Newby — Tue, 28 Oct 2008 12:00:34 -0700

There is an ongoing misconception about fiber in the United States. Some people believe that there was so mch built back in the glory days (pre-bubble) that no more fiber will ever need to be built again. Other people are starving for fiber and have immediate needs for more. How can such a disparity exist?

It all depends on who you are and where you are. Those that need fiber obviously dont have it. They need to seek each other out and band together. Those that have it typically have a lot and for various reasons are not intersted in parting with it. What they have in quantity they lack in geography. They may have a lot n certain places, but everyone lacks it in others.

Take for example the American Fiber Systems recent announcement of a fiber build in Las Vegas -

American Fiber Systems to Provide Data Center Connectivity for World Class Las Vegas Resort Casino

Apparently there is liimited fiber in the desert and just like water, people are buying it because they need it. If there were a map of the Fiber Desert in the United States it would show that the desert currently reaches far and wide beyond the rural points and brings that shallow feeling of isolation right up to the doorstep of some fairly large metropolitan areas. The map would also show that recently the Fiber Desert has been growing each year rather than receding even with the investment in fiber civilization from good folks like AFS. Interestingly if you heat sand you make glass. Maybe if we heated up the market we might get some new fiber out there.

Worse than '02?

Scott Wharton — Mon, 27 Oct 2008 23:24:18 -0700

The talk of Silicon Valley these days is about "The Downturn". How bad is it going to be, what company is laying off, etc.

In typical Silicon Valley fashion, people are trying hard to stay optimistic. At a recent investor meeting, the host of the event insisted that everyone "say something positive" after introducing themselves.

Many are saying that this market dip will be as bad as it was after Sept 11th and the dot-com bubble burst. I find that very hard to believe. While the stock market has plunged and people are feeling poorer, the fundamentals are not nearly as bad.

What could make it worse is the self-fulfilling prophesy. As more people expect the economy to get bad, companies and individuals cut back making the possible a reality. This is already happened, partly precipitated by the widely circulated blood-and-guts Sequoia Capital slides.

Let's hope cooler heads prevail and the Valley can continue to do what they do best: innovate and create new value.

What Covad Hasn't Said About Its New VoIP Service

Gary Kim — Wed, 15 Oct 2008 12:04:12 -0700

What Covad has not said about its new relaunched VoIP service is the changes in the back office that will reduce provisioning intervals by as much as 10 to 15 days. Covad has spent quite some time over the last several months revamping its back office ordering and provisioning systems, making it easier for partners and customers to initiate orders--and for Covad to forward that information to its business partners--on an automated, online basis that reduces order errors.

That's important because simple order entry errors account for much of the provisioning interval lag customers sometimes experience. The new online processes, linked to the back office systems in new ways, mean the pre-qualification, order and contract acceptance processes are streamlined.

Just as important, the simple data formatting chores that often bedevil partner operations are eliminated. "Historically, issues were created when accurate customer information wasn't gotten," says Jake Heinz, Covad VP and general manager.

The new systems mean quotes can be generated faster and information formatted for partner business systems related to phone numbers, emergency calling and loop ordering, for example. Processes also can be run in parallel, rather than sequentially, further speeding time to activation.

The actual voice feature set has not be upgraded with this iteration, but Heinz says new features, including mobility support, are planned. Further support for voice running over digital subscriber line access also is planned.

Covad expects the changes will make the firm the "easiest to buy and install" integrated access service delivering business voice and broadband over T1 and DSL to small business customers.

Covad Introduces New SIP-Based Voice Service

Gary Kim — Wed, 15 Oct 2008 10:04:28 -0700

Covad Communications has unveiled a new Covad Integrated Access service, an affordable, all-in-one phone and Internet service for businesses with up to 35 employees per location, delivered over a T1 connection.

“Covad Integrated Access service has been completely retooled for reliability and flexibility,” says Jake Heinz, vice president and general manager, Covad VoIP, allowing smaller businesses to start small and then add lines as needed.

Covad says the new offer is built on Session Initiation Protocol trunking and supports a wide range of IP, digital and analog phone systems.

Pricing start as low as $435 per month with no installation fees, depending upon contract length and services ordered, Covad says.

The new service automatically allocates bandwidth dynamically to ensure prioritized voice quality.

Cbeyond Enters South Florida Markets

Gary Kim — Wed, 15 Oct 2008 08:58:20 -0700

Cbeyond has launched service in its 11th market, the South Florida metropolitan area, which includes Fort Lauderdale, Miami, Miramar, Hollywood, and Boca Raton. That inevitably means some market share shifts, as Cbeyond has been a marketing phenomenon in virtually all the other markets it has launched, taking a significant share of the small business communications service market, at the expense of existing providers.

In markets where it has had several years of operations, Cbeyond gets 10 percent share of the small business communications market (companies with five to 249 employees), and 13 percent in the most-developed markets. Cbeyond tends to generate about $750 a month from a typical account.

Those accounts average about eight voice lines, at firms with 12 employees. Cbeyond employees use about 6.5 discrete Cbeyond applications and tend to sign three-year contracts. About 70 percent of Cbeyond customers tend to be wrestled away from the local incumbent, which would be AT&T in South Florida.

Siemens Enhances FMC Solution

Gary Kim — Tue, 14 Oct 2008 10:33:13 -0700

Siemens Enterprise Communications has announced the availability of OpenScape Mobility, delivering mobility to a wide variety of unified communications users regardless of their location. OpenScape Mobility brings together, for the first time, from a single vendor, enterprise telephony, video, unified communications, wireless and fixed mobile convergence in a single integrated mobile UC solution, the company says.

OpenScape Mobility is a new solution which combines the award winning Siemens HiPath MobileConnect, HiPath Wireless, and the new OpenScape Enterprise Mobile Client.

HiPath Wireless is the Siemens 802.11n wireless LAN. HiPath MobileConnect provides fixed mobile convergence and seamlessly extends corporate telephony features to mobile users on both the wireless and cellular networks.

The OpenScape Enterprise Mobile Client is a new mobile client for RIM, Symbian and Windows mobile devices, enabling unified communications for the mobile worker.

Small Businesses Will Adopt 802.11n Rapidly, says ABI Research

Gary Kim — Tue, 14 Oct 2008 07:51:42 -0700

Here's a switch for you: the normal thinking is that enterprises adopt new technologies before small businesses. But researchers at ABI Research say small business buyers actually are better candidates for some technologies, even though they are less knowledgeable about information technology. That likely will be case for the latest generation of Wi-Fi technology.

“Small businesses tend to buy small numbers of devices and trade them in more frequently than large companies," says ABI Research vice president Stan Schatt. Relatively low-cost Wi-Fi therefore is likely to be seen as adding great value at relatively low cost.

"They also tend to be far less knowledgeable about technology and standards than large companies with dedicated IT personnel."

Oddly enough, small businesses are likely to buy 802.11n products while they are in draft status and deploy them immediately, in part because they don't worry so much about "standards."

“Small businesses tend to buy from retailers, office equipment stores, and select value-added resellers,” says Schatt. If the retailers carry it, or the technology consultants recommend it, small business buyers are not going to worry much about whether the solutions are standardized or not.

Retail, real estate, warehousing and transportation are among the small and medium-sized market segments that could prove fertile ground for adoption of 802.11n equipment.

For starters, they already use Wi-Fi, so the technology is well known. But greater bandwidth and range are likely to been seen as reason enough to upgrade routers, especially if new PCs also are on buying lists, as those devices will support 802.11n.

Peering Traffic Soars, says Switch and Data

Gary Kim — Mon, 13 Oct 2008 10:44:35 -0700

Switch and Data says traffic on its PAIX Internet exchanges grew at about twice the rate of overall Internet traffic in the past year. This growth has been driven by international broadband, "eyeball" networks which are increasingly choosing to peer with leading U.S. Internet content sites in the company's Palo Alto and New York exchanges. PAIX traffic has grown by 112 percent in the past year versus a 65 percent global Internet traffic growth rate.

In the past year the Palo Alto exchange has experienced 67 percent traffic growth, while the New York PAIX has seen peak average traffic grow by 295 percent in 2008.

Switch and Data's east coast growth has been driven by European networks coming to New York peering traffic with U.S. content companies. International networks are making the decision to peer in the United States to reduce transit time between countries and accelerate the performance of U.S. and other global websites in their home markets, Switch and Data says.

VoX Says it Will Drive Mobile VoIP

Gary Kim — Thu, 09 Oct 2008 07:45:26 -0700

VoX Communications Corp. believes it is on to something very big. VoX now provides VoIP capabilities to Unified Technologies Group, which will provide VoIP-enabled mobile phone customers across the United States on a tier-one cellular carrier network.

For a flat monthly subscription rate from UTGI, mobile VoIP users will be able to call anywhere in the world without the need for a computer or other device to link them to the Internet. UTGI will launch two plans initially, one for domestic calling within the US, Canada and Puerto Rico, and the other to include a large bundle of international minutes at no charge.

The renewable contract with UTGI includes take-or-pay provisions for at least 50,000 lines in the first year of service. But UTGI executives say there are more than 100 distributors already committed to over 500,000 lines in the first year. And UTGI thinks it "easily" could exceed one million lines in year one, and is targeting five million lines by the end of the second year.

Verizon Launches Tech Support Operation

Gary Kim — Thu, 09 Oct 2008 07:09:01 -0700

Need more evidence that the historic demarcation between wide area networks and premises networks is gone? Verizon Communications has launched an "Expert Care" service plans that offer 24 by 7, in-depth technical support for computer software and hardware problems, as well as repair or replacement coverage for computers, TVs and telephone equipment.

Expert Care offers three types of service plans providing consumers a wide range of choices in coverage and support for low monthly or one-time fees that can be added to consumers' Verizon bills. The plans include device repair and replacement of multiple computers, TVs and telephones regardless of age, size or place of purchase. The plans range from $4.99 to $19.99 a month, depending on the equipment covered, and may also include repair or replacement of original equipment remote controls, keyboards, mice, monitors and backup batteries for Verizon's FiOS service.

A premium technical support plan, priced at $14.99 a month, includes telephone and online support for issues such as virus and spyware detection and removal, virtual private network problems, help with firewalls, problems with computer operating systems, gaming connectivity problems, and software and hardware help. Telephone and online technical support is available 24 hours a day, seven days a week.

Premium on-site support also is available, with the work provided in partnership with Circuit City's Firedog tech support operation. This plan includes on-site support ranging from operating system installations to full PC and home network setups, billed on a per-use basis. There are several offerings, tailored to specific needs and priced from $99.99 to $249.99.

AT&T also offers similar support for premises networks, equipment and software. The point is that the neat distinction between what "network service providers" do, and what value-added resellers, system integrators, interconnects or audio-video specialists do, is eroding.

With the advent of Internet Protocol services, it is necessary to support end user devices and applications to ensure proper functioning of applications and services.

Verizon Business launches Hosted UC

Gary Kim — Thu, 09 Oct 2008 06:58:05 -0700

It seems clear enough already that smaller and mid-sized businesses now are looking for every conceivable way to save money, and that might not be such great news for would-be providers of new business phone systems. One of the easiest decisions a company can make, if it wants to save money, is postpone replacing its current phone system. That is the case even if there are long-term productivity advantages.

So it probably is good timing that Verizon Business has unveiled a new managed unified communications and collaboration solution, becoming the first major U.S.-based service provider to offer the Cisco Unified Communications Manager 6.1 platform. The new offering is aimed at helping companies enhance collaboration and productivity among mobile workforces and the extended enterprise, Verizon says.

The new managed platform enables workers seamlessly to integrate communications tools such as voice mail, e-mail and instant messaging. It also allows corporate information technology departments to out-task the complex operations often associated with the day-to-day management of unified communications and collaboration solutions.

The new offering is available immediately to customers in the U.S. and many European countries, and a launch is planned in the Asia-Pacific region early next year. The offering includes unified messaging, integrating email and voice mail, a single phone number and voice mail account, as well as presence information.

VoIP Strategy: Why Some Wait, Why Others Don't

Gary Kim — Tue, 30 Sep 2008 09:08:33 -0700

Saddleback Communications has purchased and deployed the MetaSwitch softswitch and MetaSphere application suite to deliver next-generation telephony services and advanced features to residents and businesses located on the Salt River Pima-Maricopa Indian Community. Formed more than ten years ago, Saddleback Communications is a federally regulated incumbent local carrier (ILEC) currently serving more than 3,500 business and residential customers within the Salt River Pima-Maricopa Indian Community, a Native American community that spans more than 53,000 acres. The sale illustrates one facet of voice services strategy, namely which service providers benefit from offering VoIP, and which do not, at least not yet. Understanding the strategies at work also helps one understand what the adoption triggers are. Some say VoIP isn't catching on as quickly as many originally thought. Researchers at Dell'Oro Group, for example, point to declines in sales of VoIP switches and other infrastructure as evidence VoIP is not catching on. Global sales of IP phone gear to service providers fell eight percent to $861 million in the second quarter of 2008 compared to a year earlier, Dell'Oro estimates. The decline from the first quarter of 2008 was steeper still at 10 percent. To be sure, cable companies and voice-over-broadband operators like Vonage have been key customer targets for VoIP suppliers. Still, traditional phone companies is where the bulk of the sales are, says Dell'Oro vice president Greg Collins. And telcos don't have the same incentives for investing, he argues. That's right, up to a point. Some of us would take another view of the apparent slowdown. Dell'Oro researchers point out that telcos have little incentive to replace their entire Class 5 switch infrastructure. At this point, telcos are losing voice lines fast enough that even cost savings would not be enough to justify soft switch replacement on a wide scale, Dell'Oro argues. All of that arguably is true, at least for the moment. Unlike their European counterparts, U.S. incumbent telcos have not yet reached the point where switching to VoIP on a mass scale makes financial sense. The reason is the likely impact on overall voice pricing, assuming VoIP would have to be introduced at a discount to today's level of voice pricing. But that won't always be the case. There will come a time when VoIP becomes an imperative, and that's when the investment will occur. The example is Western Europe, where incumbent telcos are vigorous participants in the VoIP market. The difference between European and U.S. telco strategies is dictated by marketplace realities. In Europe, VoIP is such a key part of the demand for broadband access, and competitive providers have such a powerful market presence, that incumbents simply must compete: there is not an alternative of harvesting legacy revenues for a while longer. That is not yet the case in the U.S. market, for some of the larger providers, though the strategy clearly is different for smaller incumbents. Residential use of VoIP is expected to grow at a compound annual rate of 20 percent over the next four years, most observers predict, but much of that will be driven by cable operators, not telcos. If VoIP is a $10 billion annual revenues business by 2011, even that is unlikely to represent a crossover point where it makes sense for major telcos to abandon legacy voice for all-IP alternatives. Consumer voice still is something on the order of a $60 billion a year annual revenues business, so one would anticipate that incumbents won't move to push VoIP with any seriousness until VoIP claims about half of that, or $30 billion annually.

Wyde Voice Offers Test Drive Program for Service Providers

Gary Kim — Sun, 28 Sep 2008 11:17:59 -0700

Sampling is one of the best ways to get potential customers to try new services. So WYDE Voice is offering a 60-day free “test drive” program for service providers who want to test its wide-band voice conferencing service. Qualified service providers get a free 500-seat license and server to test the product’s functionality. Providers in some cases also can test the hosted version of the application.

68% of U.S. Travelers Don't Know About Ways to Cut Roaming Cost

Gary Kim — Thu, 11 Sep 2008 10:52:03 -0700

According to a study commissioned by Brightroam, a leading global cellular communications provider, 68 percent of U.S. travelers report paying costly roaming fees charged by domestic carriers for cell phone use overseas. The trend occurs despite the wide availability of global cellular services that can cut roaming costs by as much as 80 percent.

The study, conducted by research firm Harris Interactive, also shows that many U.S. travelers lack the basic technical knowledge needed to make more informed decisions about international cell phone use. Just over half (55 percent) report not knowing whether their cell phones use CDMA or GSM technology. Of those respondents that use a roaming solution, a total of 57 percent report having a locked phone, while 20 percent are unsure. This knowledge is critical, since unlocked GSM phones are necessary for the use of international SIM cards that offer maximum savings and allow users to completely side-step domestic carrier international fees.

To control costs, most U.S. international travelers restrict their cell phone use, making it inconvenient to remain connected to family and friends. Respondents reported seeking out landlines for 64 percent of calls made while overseas. Of those calls, 46 percent are made from expensive hotel phones and another 18 percent are made from phone booths.

“Roaming fees are a painful reality that keeps U.S. travelers from remaining connected with family and friends when abroad,” said Jeff Wilson, general manager, Brightroam. “Now that more affordable options are available, it’s time for consumers to stop handing domestic carriers more money and start saving on roaming”.

The study revealed that while the majority (58 percent) of leisure travelers have considered using solutions to cut their roaming bills, only a few respondents have taken action on their most recent trip (just 14 percent have purchased an international SIM card). This means that more than half of the roamers are still accruing high cell phones bills - as much as up to 80 percent more than those that use GSM-based roaming solutions. Companies like Brightroam provide global cellular services that cut roaming costs by 50 – 80 percent in over 160 countries by providing international SIM cards (for users with unlocked GSM phones) or inexpensive unlocked GSM phones and SIM cards (for users with CDMA or locked GSM devices). The study also revealed other interesting leisure travel trends, including:

•The most popular destination for Americans traveling overseas is Europe (39 percent) and the average trip is 8.9 days.

•The main reasons for using a cell phone while abroad are to stay in touch with family, followed by emergency support and convenience.

•Most respondents (68 percent) understand that carriers lock devices for exclusivity

•On average, users of roaming solutions such as Brightroam make 75 percent of calls on their cell phones while overseas, with 23 percent using a fixed landline and two percent using alternative methods.

•Not many (five percent) have switched international cell phone roaming service providers in the last year.

•The main reasons for people to switch cell phone roaming providers are for cheaper airtime rates (48 percent), better coverage (39 percent) and call quality (33 percent).

Ethernet Migration Continues

Gary Kim — Mon, 08 Sep 2008 15:19:50 -0700

The first half of 2008 saw continued rapid growth of Business Ethernet Services in the U.S., according to Vertical Systems Group's latest market share analysis. The number of installed domestic customer ports increased more than 16 percent for the six-month period ending June 30.

AT&T accounted for 21 percent of total ports, followed by Verizon with 15 percent, TW Telecom with 13 percent and Cox with 10 percent. Rounding out the top tier of Ethernet service providers with more than 5 percent share were Qwest (8 percent), Cogent (7 percent) and Time Warner Cable (6 percent).

"Most providers steadily increased their port deployments, spurred by new Ethernet service offerings and migration of larger customer networks. All of the major U.S. providers, with the exception of Verizon, reported double digit port growth in the first half of 2008," said Rick Malone, Principal at Vertical Systems Group. "The Competitive Provider segment was the fastest growing for the period, taking advantage of SMB opportunities and rollouts of Ethernet over copper. The other two provider segments, MSO and Incumbent, also experienced growth."

XO, AboveNet, Level 3 and Reliance Globalcom (formerly Yipes) lead more than forty other companies delivering retail Ethernet services to business customers in the U.S. Other Business Ethernet providers in alphabetical order include: American Fiber Systems, Alpheus Communications, American Telesis, Arialink, Balticore, Bright House Networks, Charter Business, CIFNet, Cincinnati Bell, Comcast Business, Embarq, Expedient, Exponential-e, Fibernet Telecom Group, FiberTower, Global Crossing, Integra, IP Networks, LS Networks, Masergy, Met-Net, Neopolitan Networks, NTELOS, NTT, One Communications, Optimum Lightpath, Orange Business, Paetec, RCN, Savvis, Spirit Telecom, Sprint, SuddenLink, Surewest, US Signal, Veroxity, Virtela, Windstream, and others.

Do People Really Care about Phone Numbers?

Scott Wharton — Mon, 08 Sep 2008 15:18:24 -0700

Not long ago, a telephone number had an important meaning to your identity. Your local number, it was understood, signified where you lived and an important part of who you were. A few trends have weakened the link between this identity:

area code explosion: with so many new area codes, it has become nearly impossible to figure out what the first 3 digits mean compared with the remaining 7 or so
mobile phones: people are mobile now and take their numbers with them when they move (most of the time). On university campuses, hardly anyone seems to have a "local" number
VoIP: With users able to actually choose which number they get, many people picked "vanity numbers" e.g., from New York City even if they live in Northhampton, Massachusetts

Some people still advocate that the average user puts meaning on these random digit assignments but I have my doubts. Sure I could understand that people want an area code that roughly corresponds with where they live but do they care (or even know) that the digits after their area code correspond to a certain phone switch in a certain area (e.g., Does anyone living in Palo Alto know that having a 353 number after the 650 area code actually means anything to them)?

So the question to our readers is: Do you think the *average* user (if you know what an NPA-NXX is then you are NOT average) cares about what number they get or is it enough to just give them the right area code? Please post your opinions or send them to scott@vidtel.com.

Business Model Transformation Crucial, IBM Finds

Gary Kim — Mon, 08 Sep 2008 11:57:18 -0700

The challenges communications service providers face also seem to be seen as crucial by midmarket CEOs. Recent surveys of telecom industry executives have found them focusing top attention on changing business models. It now appears that sentiment is widely shared.

In a global marketplace, it's all about change, say midmarket CEOs recently surveyed by IBM. About 74 percent of midmarket CEOs "plan to substantially change their business models over the next three years, versus 69 percent of the overall sample," IBM says. The big takeaway? Nearly 70 percent of CEOs say they have to change their business models.

"They told us that this is partly because they are finding it increasingly difficult to differentiate their companies through products and services alone, and partly because technological advances have given them many more options," IBM says.

Of those executives that plan to substantially change their business models, 33 percent are focusing on enterprise model innovation, addressing new markets and customer segments.

Another 22 percent of midmarket CEOs are engaging in revenue model innovation. One respondent, for example, is focusing on “new services to existing customers” and “new ways to sell and price,” while a second aims to shift from a “transaction-based” pricing regime to a “fee-for-service” model that is “more value-based.”

Similarly, 23 percent are undertaking industry model innovations. The vast majority of these respondents plan to redefine the industry in which their companies are operating. Surprisingly, however, 39 percent of this group aims to create entirely new industries, IBM says.

Mid-market CEOs also say they are struggling to keep up with an environment where consumers are now dictating the pace of change, where formerly they were the ones in control. “Change in the organization is not happening fast enough. The gap is widening,” one Dutch midmarket CEO told IBM researchers.

In 2004, market factors (such as variations in customer purchasing patterns, growing competition and industry consolidation) dominated the boardroom agenda. Today, however, midmarket CEOs have to focus on a much broader range of concerns, IBM says.

Market factors remain their top priority, but access to people with the skills they need, regulatory compliance, technological factors and globalization also weigh heavily on their minds. Regulation is a source of particular anxiety. About 37 percent of midmarket CEOs think it will bring major changes, compared with just 30 percent of the total survey population.

Globalization is creating many more challenges for mid-market enterprise executives. Rather than being able to concentrate their efforts on a few specific issues, midmarket CEOs must now cover a much wider front and cope with much greater uncertainty. They must “master complexity,” as one respondent put it.

Mid-market CEOs plan to channel more than 22 percent of their budgets into meeting the needs of information omnivores. Most companies are focusing on the development of “the next generation of products” and services, and “how to attract” these customers, as one respondent put it.

Targeted Ad Roadblock Not a DPI Roadblock

Gary Kim — Fri, 05 Sep 2008 12:48:18 -0700

Efforts by U.S. cable and telco service providers to introduce targeted advertising have largely ground to a halt in the wake of Congressional concern over the privacy implications. But that is a different matter from the use of deep packet inspection techniques. "We get asked a lot about future of DPI," says Cam Cullen, Allot Communications director. "It doesn't change the market." In fact, says Cullen, "we are seeing this requirement from FCC actually increases the need, as legally, you now must demonstrate you are behaving fairly." Bandwidth caps also may play a role in stimulating demand. "You need to know how much bandwidth users are consuming," Cullen says. In cases where service providers also may want to offer services that "do not count against the cap," DPI also is needed to figure out what parts of the consumption count against a quota, and which do not. One example might be a service provider offering an unlimited domestic calling VoIP service, but also a quota of some hundreds of gigabytes of total usage each month. The service provider then has to separate those bits into different buckets. "You don't want to penalize users for that," says Cullen. DPI can be used to identify and exempt VoIP traffic from those quotas. "We see a great deal of requirement for ability to provide opt-in or opt-out services, and the only way to do that at the application layer is to use DPI," says Cullen. It also might be difficult to shape traffic, without blocking, without use of DPI. That is a bit of an issue for wired network providers, but a bigger issue for wireless providers, who have radio capacity constraints and less overall bandwidth as well. In other cases, service providers want, or must, block illegal Web traffic. Blocking of child pornography sites, for example, requires or is easier when DPI capability is used, Cullen argues. Any form of usage-based pricing also requires counting and logging packets per user, in the first place so the service provider knows what is going on and secondly so users can make intelligent decisions about their usage and plans. Targeted advertising has hit a momentary roadblock. That doesn't mean DPI has.

Dark Fiber Access Network for Greece?

Gary Kim — Thu, 04 Sep 2008 11:20:26 -0700

Details are sketchy, but Greece may be about to launch an initiative to build a national broadband "dark fiber" access network, according to Agence France-Presse. The seven-year project estimated to cost 2.1 billion euros (three billion dollars) will provide high-definition TV, video telephony, quicker Internet connections and other high-bandwidth services. A public-private partnership is envisioned, with proposal process expected in the second half of 2009. The contract involves the construction, maintenance and operation of a dark fiber network for 30 years. The plan is one of many now underway in many parts of the world to create "condominium-style" access networks open to any number of competitors.

Internet Overload? Not to Worry, MINT Says

Gary Kim — Wed, 03 Sep 2008 10:47:13 -0700

Worries how well about the Internet can cope with increasing bandwidth demands often is overblown, according to the Minnesota Internet Traffic Studies project. British ISP, PlusNet recently noted a dramatic increase in traffic based on the BBC iPlayer rollout, once again raising fears that video content would swamp ISP ability to respond. But now that the novelty has worn off, the growth rate has subsided, says MINT. Overall traffic (for the network as a whole, not on a per-user basis) is up only 26.5 percent between June 2007 and June 2008. Streaming traffic is up 169 percent over that period, but represents 6.6 percent of total traffic (up to 9.6 percent of all downloaded traffic during peak evening hours). Streaming is the big bugaboo, often cited as a threat to the network, says MINT. But much of the video and music traffic that appears to be streaming, such as YouTube, actually consists of faster-than-real-time progressive downloads, which are much easier to accommodate on the network and such approaches are far more sensible than true streaming, MINT argues.

34% of CIOs Say Their Firms Now Use Video Conferencing

Gary Kim — Wed, 03 Sep 2008 10:40:13 -0700

When chief information officers were asked which tools their firms currently use or anticipate using, the most popular responses were online training (60 percent) and video conferencing (52 percent). Some 47 percent of CIOS report they now are using online training, while 34 percent report they now use video conferencing. About 18 percent of CIOs say they plan to deploy video conferencing within the next five years. Software that creates collaborative workspaces, such as Microsoft SharePoint, was cited by roughly four in 10 respondents. Cited less frequently were Web 2.0 tools such as blogs, tagging and wikis. Still, some CIOs said they had plans for these tools in the works. The survey was developed by Robert Half Technology, a leading provider of information technology (IT) professionals on a project and full-time basis, and conducted by an independent research firm. It is based on telephone interviews with 1,400 CIOs across the United States.

Internet User Broadband Penetration Near 90% in U.S.

Gary Kim — Wed, 03 Sep 2008 10:28:02 -0700

Whatever else one might say about fixed network broadband access, there actually are very few potential customers who cannot buy it, in the North American market. In Canada, virtually all households in urban centres and 78 percent of households in rural areas were within the broadband footprint at the end of 2006, according to the Organization for Economic Cooperation and Development. Broadband coverage is also extensive in the OECD�s second largest country, the United States, where high-speed cable modem service is available to 96 percent of end-user premises in the United States at the end of 2006. DSL coverage is in the high-70s percent penetration at that point. Lay on top of that the availability of satellite broadband services provided by HughesNet and WildBlue, plus all the independent Wireless ISPs, plus 3G services, Clearwire and Xohm. At current growth rates, broadband penetration among active Internet users should break 90 percent by mid-2008 in the U.S. market, say researchers at Leichtman Research. Overall, broadband penetration is 57 percent in U.S. households, it is true. But as Leichtman points out, penetration of Internet-using households is very close to saturation. In January 2008, broadband penetration in U.S. Internet user homes grew 0.7 percentage points to 87.49 percent, up from 86.79 percent, in December 2007. This increase of 0.7 points is above the average increase in broadband of 0.59 points per month over the last six months. At current growth rates, broadband penetration among active Internet users will break 90 percent sometime in 2008.