Views, comments and learning material on IP communications, incumbent wireline and wireless services and disruptive changes in the telco sector - and how the whole stuff is financed.
I've called this blog Telcotrash because it mainly covers how IP Communications will send the traditional telco world to the dustbin, and because I am so incredibly clever when it comes down to naming things.
Vodafone and MSN plan to launch a seamless instant messaging service between PCs and mobile phones (press release on Vodafone's website). I wonder if that is what James meant when he said yesterday that something pretty big is going to be announced.
Sooner or later it had to happen: Skype as the topic of a major consultancy's publication (pure egoistic self-promotion: I believe to have been there first, admittingly though not in our inhouse publication). Booz Allen Hamilton's "strategy + business" is writing about Skype's Challenge (pdf). James is mentioned in the article (and funnily enough also myself in an indirect way), and his blog was actually my source.
The article doesn't really say anything new, but it has its point: Only two months ago, I talked to a rather highly-ranked manager of a major European mobile phone operator, and at that time he hadn't heard about Skype, and neither did any of his subordinates. While this is anectodal evidence, I am pretty sure that also many of his peers at other operators don't know what is going to hit them soon. So Skype might actually be going mainstream very soon if the consultants start using it as their burning platform. T-Mobile has already dropped its walled garden approach and is setting its preset home page for its phones to Google, so who knows what's next for Skype - a partnership deal with one of the major CellCos?
By the way, the manager is now enthusiastically using Skype himself and promoting it among his friends.
UPDATE: James has more details on the T-Mobile announcement, he explicitly asked T-Mobile CEO René Obermann about the impact of mobile VoIP.
Particularly interesting is the article about software-defined radios (SDR). This is one of the most exciting technologies around in my view, with great potential to re-define wireless communications. One reason is that SDR serves to protect investments into the existing networks, as multi-band and multi-standard solutions emerge. Just take into account the clash of frequency-division multiplexing (FDM) and time-division multiplexing (TDM) through the worlds of GSM/UMTS (using TDM) and CDMA (using FDM, e.g. EV-DO). Some countries in Europe, where so far we had a 100% base of GSM networks, are considering re-assigning the frequencies in the 450 MHz band from analog cellular services to wireless broadband based on CDMA, e.g. Norway, Sweden and Finland. This is what the article talks about.
More importantly however, SDR can help to remove the bottleneck from the radio spectrum and trigger the re-defintion of spectrum policy. If through SDR radio signals can be intelligently identified despite interferences, spectrum becomes a function of processing capacity and not of availability of MHz channels. Assuming that Moore's Law will hold true for the future, we would eventually see abundant spectrum with the potential for major economic benefits. One of the companies on my watchlist in this context is Vanu.
I don't know if anybody has already blogged this, but Siemens Italia, confirmed on Friday to conduct WiMAX trials in selected regions of Italy (press release in Italian). The regions are Piemonte, Valle D'Aosta, Sicilia, Sardegna and Abruzzo. Additional roll-outs will happen in the areas of Milan, Parma, Arezzo and Rome.
The press release cites the support by the Ministry of Defence which liberated some of the frequencies in the 3,4 and 3,6 GHz spectrum, and the Ministry of Communications which will assign the frequencies for the WiMAX trials.
In this context it is not surprising that Valle D'Aosta has been selected as the first region to see the roll-out: Valle D'Aosta is a remote region in the Alps, with little to no broadband penetration, so rolling out there was certainly a condition tied to giving away the frequencies. The region is part of the red zone - "zona rossa" - a zone where no broadband infrastructure is available. The categorization of Italy into a green (multiple broadband infrastructures), yellow (one broadband infrastructure, principally Telecom Italia's ADSL) and red zone (no broadband infrastructures at all) has been by the "Osservatorio Banda Larga" as part of its research on the digital divide in Italy (see pdf)
Siemens already has a project on rolling out WiMAX covering all of Italy, requiring investments of 200-300 Mio. Euro for 2.000 to 3.000 base stations. I have my own opinion on the feasibility of that project, based on calculations I did last year with one of my colleagues. Will prepare those calculations for the blog, update to follow.
PublicTechnology has a summary of new research by Ovum and Imago Communications on usage of VoiP in the business segment. Full version of the research available as pdf. There are some interesting points, e.g. "that one of the most important reasons why organisations are adopting (or looking to adopt) VoIP is still saving money - with 69% of respondents stating that ‘cost savings’ was a business goal behind the adoption of VoIP."
French regulator Arcep (Autorité de régulation des communications électroniques et des postes) issued its analysis of the fixed telephony market in France and has launched a public consultation until July 11th (via ZDnet France). As Steve Martin once noted, "Those French have a different word for everything!" - so "all IP" becomes "tout IP", Voice over IP "Voix sur IP" and Voice over Broadband "Voice sur large bande", and Arcep has decided that VoIP is to be considered as a part of the traditional fixed market, as it represents a substitute for the traditional PSTN service, so the argument goes:
La démarche de l’Autorité est technologiquement neutre, elle intègre donc les services utilisant la technologie " voix sur IP " dès lors qu’ils sont substituables aux services classiques.
By being "technologiquement neutre" which I would also translate as "bearer-agnostic", Arcep considers VoIP providers as telecommunication providers in the classic sense if they also control the underlying network service, which in France is almost exclusively ADSL (cable's share of broadband penetration is well below 10 %, the main cable provider I know is Numericable). France Télécom's voice over ADSL product eXtense would therefore fall into this category.
Au contraire to the bundled broadband/VoIP services - voix sure large bande - pure-plays such as Skype or French new kid on the block Wengo (launched in January 2005) are exempted, Arcep refuses to regulate such services: in an earlier analysis in December 2004, Arcep (back then called ART) exluded regulation since they don't claim to offer any QoS and are therefore not to be considered as a substitute for PSTN services.
In the current consultation, Arcep also states that there will be no intervention from their side in terms of tariff control on "voix sur large bande", but this may well be the case if they have the impression that France Télécom is abusing its market power, so any intervention would directly regard FT:
En conséquence, l’Autorité considère qu’une extension du périmètre du contrôle tarifaire aux offres de " voix sur large bande " n’est pas justifiée à ce stade. L’Autorité suivra néanmoins attentivement le jeu concurrentiel sur ce segment de marché et pourra décider, le cas échéant d’imposer des obligations complémentaires à France Télécom.
I believe this is a good point to start from - "good" because we have seen worse. It has been recognized that the incumbent can price other providers out of the market by bundling VoIP with a broadband line. What makes me less positive is the fact that since there is no naked ADSL in France, at least not to my knowledge, the customer is required to also subscribe to a copper line with a geographical phone number, which gets us close to the emergency number issue (which, by the way, in France is 17).
UK-based Timico and Nortel have teamed up to provide hosted VoIP services for the UK business market. Read the press release, and check out the section of the key features their solution provides. The features are nothing new to VoIP industry experts, but I think their simple statement is an attempt to educate their potential customers. IP-based communication is still a black box for many small and medium businesses, especially for those operating in non-tech industries. I have a friend who owns a food-processing company with about 70 employees, and his company is not even close to having a decent e-mail service that works. The result is that both his customers and suppliers usually call to ask if their e-mails have been received (and I am dead serious here..). Try talking to my friend about the productivity potential of VoIP.
In previous posts I pointed out how not only consumer-oriented service providers like Vonage but also more focused providers such as Cbeyond go after the SoHo and SME segment for VoIP solutions. One trend is that the equipment manufacturers themselves as the likes of Cisco go after this market by integrating vertically along the value chain, which is sometimes referred to as "moving up the stack", as they provide managed networks services directly to the final customer, instead of or in addition to enabling a telco to do so. They can do this as a result of IP, where network and premises boundaries are less relevant because IP may extend to the desktop.
Addressing this market can either be done by building up the required capabilities, or by teaming up with other players. The organizational change that would be required for big players like Cisco, Nortel, Siemens, etc. however is huge, as they would need to build the respective sales force - working with numerous SMEs is different than working with a manageable client portofolio of few enterprise customers. Mobile operators have experienced that pain when they started selling data solutions some time ago, especially for vertical solutions: You need both the expertise of your client's business and the manpower to follow and take care of them and their needs.
So probably the smart thing to do is to team up in some way with a more focused player who can take care of niche markets and sell your equipment and solutions, while allowing the partner to take a margin out of the services. Nortel is doing that with Timico, Cisco actually invested in Cbeyond. I am not sure what Siemens and Alcatel are doing. Siemens offers HiPath 8000 for up to 100.000 end stations - not really an SME-product, and the fact that Siemens itself is still operating with legacy PBXs probably won't impress any customer.
One of the key barriers for successfully penetrating the business market - one could compare it to E911 services for the residential segment - is in my view the problem of what happens once power goes down - namely nothing. I am trying to imagine my above-mentioned friend - while his computer and hence e-mail won't work when electricity is cut off, at least he can still pick up the phone and call a customer, right? Try explaining him what happens when he has a converged IP-based network. So I believe one key factor next to reliability and simplicity that could accelerate the deployment of VoIP in the business segment is Power over Ethernet, which would make the case for companies such as PowerDsine. (read more on Power over the Ethernet, especially this article on VoIP/PoE from PowerDsines Marketing VP)
Austrian WiMAX service provider WiMAX Telecom plans to spend 2,5 Mio. € this year for the roll-out of an Austrian-wide WiMAX Network with 60 base stations. First customers are expected for September 2005. WiMAX Telecom plans to spend a total of 70 Mio. € until 2008 to reach 70% of the population of Austria. Until 2008, WiMAX Telecom wants to sign up 200.000 customers. They intend to price their service similar to the current ADSL offerings of incumbent Telekom Austria. Apart from ADSL, Austrians can also choose from cable broadband (Chello) and in Vienna FTTH (blizznet). (via Computerwelt)