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Voxbone Launches 883 "Global Local" Service

Posted November 11, 2008 by Gary Kim - Comments (0)
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

Posted November 8, 2008 by Gary Kim - Comments (0)
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

Posted November 6, 2008 by Gary Kim - Comments (0)
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

Posted November 6, 2008 by Gary Kim - Comments (0)
Cable is generally considered to be recession-proof, but Time Warner Cable President and CEO Glenn Britt says its "naïve" 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

Posted November 4, 2008 by Gary Kim - Comments (0)
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

Posted November 2, 2008 by Gary Kim - Comments (0)
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

Posted October 29, 2008 by Gary Kim - Comments (0)

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 27th 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?

Posted October 28, 2008 by Scott Wharton - Comments (1)
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

Posted October 28, 2008 by Hunter Newby - Comments (0)

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?

Posted October 27, 2008 by Scott Wharton - Comments (2)
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.