Have been remiss in posting about this show, which started on Monday, so here's my take after the first two days.
Let me back up and first explain things. This week is the 4th year of the Canadian Telecom Summit, which is based here in Toronto. For once, a show I don't have to travel for!
The show is put together by Mark Goldberg and Michael Sone, both consultants, who are real veterans of the Canadian telecom market. They aren't in the show business - they just do this as an annual one-off, and it's grown into a star-studded event. Hats off to Mark and Michael - they sure know how pull in the right people.
The speaking roster is impressive, with President/CEOs of major telcos and vendors, including Michael Sabia - Bell, Darren Entwistle - Telus, Michael Capellas - MCI, Bill Owens - Nortel, Don Peterson - Avaya, David Hemler - Microsoft Canada, John MacDonald - Allstream, Jeff Citron - Vonage, Mark Henderson - Ericsson Canada, Albert Maringer - Siemens Canada, Hubert de Pesquidoux - Alcatel Canada, Bill Linton - Call Net, and others. You get the picture.
From what I've seen, the show has been really well run, and quite well attended - probably about 500 people. The show is different from most in that there are no exhibitors - just presentations and breakouts. The tradeoff is that the presentations have a bit more pitch and promotion than you see elsewhere, but that's ok. I haven't seen anything out of line, so nothing really to complain about.
For now, I'm just going to post my high level impressions - hopefully I can add to this tomorrow....
- So far, IMS and selling IP to SMBs have been strong themes. You need to keep in mind that the Canadian market is a good year behind the US on a number of IP fronts, and from talking to people, these themes were pretty new.
- Presentations and panel discussions have been pretty high level. Not a lot about strategic direction, and not a lot of vision stuff. I don't have the stats, but the audience makeup seems to be heavy on carriers rather than vendors or enterprises. So, I can see the presenters not wanting to give away too much. That's ok, but if you were looking for cutting edge developments, I haven't seen that here yet. Of course, tomorrow is another day!
- So far, Jeff Citron's presentation was the closest to a reality check on what's going on with IP, and he projects an energy level - ok, it's polished, but he's good! - that I really don't see in the other speakers. Not surprisingly, he left us with a provocative line that could probably only come from Vonage - "fire your phone company, they don't deserve your business". It's so... un-Canadian... but would you expect it any other way from them? VoIP is happening now, and as Jeff notes, it's all about empowering the consumer with choice. On that thought, Jeff also did a great job positioning Vonage against the bundle. He basically said that bundles limit choice for the consumer, and that's probably the best way to counter the bundle.
- Micheal Sabia also gave a great presentation over lunch. He echoed Jeff's mantra about choice and consumer empowerment, but his overall message was a much more direct response to the May 12 CRTC ruling on VoIP. Anyone following the market here knows that the incumbents are not happy with the outcome, and Michael framed his argument in the context of global competitiveness. His view is that communications and tech are the drivers of productivity and competitiveness, and the CRTC's ruling continues the kind of thinking that is causing Canada to lag and lose ground to other countries in this regard. This was another big picture theme that has come up in a few presentations, especially Bill Owens. He did a great job explain how countries like Korea and China have adopted tech infrastructure as a cornerstone of economic policy, and they are quickly reaping the benefits. The message here is that Canada needs to follow this model or they will continue to slip, especially compared to the US, their most important trading partner. This is the closest thing I've seen at the show to vision from these leaders, and I agree with them. It's easy to see this as sour grapes from Bell, but I'd much rather see Bell, Telus, etc. be in this market and putting their resources to good use. Of course, if it doesn't go to good use - i.e. being anti-competitive - well, that's what the regulators are there for. The MSOs and Vonages of the world will not go out of business tomorrow if the incumbents come to market. There's plenty of room for everybody.
- Finally, having been to a number of US shows recently, I found it odd that there have been no big press releases, announcements or launches at the show. The closest I've seen is from Vonage Canada today, announcing they've expanded their service footprint. It's good news, but not really a big story. Of course, the nature of this show doesn't really lend itself to a lot of hoopla, and the market is still very nascent here, so most of the big stories are unfolding quietly, at least for now. I suspect this won't be the case when Mark and Michael do this again next year!
For more coverage of the show, Mark Evans posted his insights about the opening presentations, and I'm onside with his basic take on these.
Tuesday, May 31, 2005
Friday, May 27, 2005
More VON Europe notes/thoughts - Skype, Telio, peer to peer and James Enck
Finally - chance to write uninterrupted on the flight back home...
Skype
There�s no doubt that Niklas Zennstrom has got star power in the VoIP universe. From what I could tell, this was the first presentation of the show that had an overflow room to handle those who couldn�t get a seat in the room he was speaking in. It�s possible that Jeff�s keynote had overflow, but I think this was the most anticipated presentation of the show. He�s certainly the local hero, and it was great to see him in this setting.
For anyone who saw him speak at VON Canada (and I can probably count them on one hand among those here), there wasn�t much new in his message, with maybe a few numbers being updated on paid subscribers. At its core, Skype�s success is rooted in simplicity - it�s just so easy to use, at least for consumers. In terms of the trends behind this, Niklas points to the growing penetration of broadband as the foundation. Building on this, broadband allows for packetized voice to travel over the Net, and increasingly, telephony is becoming a software-based Internet application. In this environment, the economics of voice quickly fall to zero, and so far, Skype�s customer acquisition costs have been practically nil, and they�ve been able to scale with demand at little added cost.
The story still holds together well, though, and Skype would appear to be the first truly disruptive player in IP that has a global reach. I think that�s pretty significant, and I can�t help but reiterate one of Niklas�s key points � they�ve done it spending ZERO dollars on marketing. Pretty incredible if you ask me. That said, they actually had some nice goodies in the press room with earbuds and a SkypeOut trial package � those disappeared faster than anything on the table. So they�ve haven�t quite spent zero on marketing � maybe a few thousand dollars.
On the marketing front, though, there was an interesting item that�s old news by now for anyone following the telecom press. They�ve announced an affiliate program, which really confirms the power of the Net as a viral marketing tool. Basically, anyone getting others to sign up for premium (paid) services from Skype gets a modest commission.
This sounds very much like a page from Google, and I think that�s the best model for Skype to follow. The community is all Internet based, and users see the value of using Skype to communicate within this community. Of course, that�s the rub, as Skype is still at heart a closed system, which is contrary to the open nature of software and especially the IP community these days.
Along those lines, Niklas cited the Google maxim of �do no evil� to keep its credibility with customers. He certainly prides Skype in its honesty with users � it�s just a great voice application � there�s no marketing hype, no advertising, no spam, no viruses. These are solid virtues, no doubt, but I suspect they will be harder to uphold as Skype evolves its business model around revenues rather than free downloads.
And the �do no evil� mantra may ring hollow once Skype starts getting to be Google-sized, and they still don�t open up. It�s not enough to say they use SIP for their paid services � that�s a given. As the Open Source trend builds momentum, there�s a danger that Skype could start to look more like Microsoft in terms of having the dominant OS for Internet voice.
Finally, I couldn�t help but notice the URL on Niklas�s final slide. I haven�t seen any one else pick up on this, but it was a link to their jobs page. Interesting.
www.Skype.com/company/jobs
Subtle, no? An invitation to join the Force, or maybe the Dark Side? Maybe it�s time for the Open Source community to find its way into Skype and lead the charge from the inside out. Don�t worry, Niklas � I�m not advocating a palace coup! Skype is the poster child for VoIP, and I think we all want to see its success continue and really challenge the status quo. They�re in a better position than anyone to do that, even Vonage, although that�s another topic.
While we�re talking disruption and transformational forces, I�d like to note three companies I saw this week who, in my books, fall into that bucket�.
Popular Telephony � I briefly mentioned them in an early VON Europe posting. Peer to peer is just as radical as VoIP, and I believe it is one of the big trends shaping IP, right up there with WiFi/WiMax, and maybe even IMS. This is especially true for serverless P2P, which allows for theoretically unlimited scalability, at little or no additional cost.
What Skype is doing with P2P in the mass market for VoIP, Popular Telephony is trying to do the same in the enterprise market. In this context, it�s interesting to see they had a joint announcement this week, as Popular Telephony starts making a serious push with enterprise P2P. It�s also interesting to note that both have now made moves for mobility solutions, another sign that P2P is ready to grow beyond being PC-based.
Nimcat Networks � I also mentioned them along with Popular Telephony the other day. I wanted to mention them in the context of P2P as another example of how this technology is starting to find applications with real business models. Their nimX solution is targeted squarely at the low end of the business telephony market, and is a great example of how serverless P2P can be productized to address a specific need better than anything that�s out there today. As their CEO, Mahshad Koohgoli said, �SMBs � that�s where the pain is for carriers�. I don�t think the PBX vendors have much to worry about here, but this is exactly the kind of offering that brings IP to an even broader audience. I say bring it on.
Telio � while practically unknown in North America, they�re starting to look like the Vonage of Europe. Based in Norway, they�ve passed the 50,000 mark, which in absolute terms, puts them in the same league as AT&T�s CallVantage. Hmmm.
On relative terms � as James Enck points out � on a per capita basis, Telio�s numbers would ramp up to 3.5 million if they were in the US. That would put them ahead of everyone globally except Yahoo Broadband in Japan among those selling replacement line VoIP. Scary stuff. They just went public, and of course their market cap is nothing like AT&T, but financial analysts should start looking at them as the prototype for valuing public VoIP pureplays.
They have a very clean business in that they haven�t reinvented themselves in the way that the publicly traded US VoIP plays like Primus, 8x8 and Voiceglo have. They have no baggage � it�s just pure VoIP built by sharp people who really understand the technology. Ever notice how so much of the good stuff in VoIP is coming out of Scandanavia? Skype, Telio, GIPS, etc. More kudos to Jeff in picking Stockholm for this year�s show � his instincts are so on the money. He�s always in the right place at the right time.
James Enck, European Telecom Analyst with Daiwa Securities
There weren�t many analysts at the show, and James may have been the only one from Europe. I wish I had a chance to meet him, but I�ll do my best here to relay what he had to say.
James gave a great overview of what�s happening with VoIP in Europe, and cited Free Telecom, France Telecom and Skype as being the market leaders. By his count, they collectively have about 2.3 million users in Europe. Perhaps more importantly, he noted that VoIP has reached roughly 30% penetration of BB in Europe, and how good that was for only being out there for 2 years. To me, it�s just another proof point about how quickly VoIP is happening � just wait until numbers start coming out of China. I�m not tracking this, but I have no doubt they will be huge, and will look like it�s all just happened overnight � which is probably not very far from the truth.
Another interesting stat � James estimates that Skype users are Skyping an average of 7 minutes a day. I�m sure the vast majority of this is free minutes, but he noted this number is comparable to PSTN usage. That�s pretty interesting. Incredible how people�s habits will change when something really good comes along � or something that better, or just plain easier to use. Didn�t take long for Skype to catch up to PSTN! There�s just something inherently appealing about something that�s free and works really well�..
What�s even more scary? In places like the US and Hong Kong, the average usage for wireless is about 15 minutes a day. Double the PSTN! The ascendancy of wireless over wireline has really only been in the last 10 years max � really 5 for the good stuff. And this is all TDM traffic. What�s going to happen when wireless goes IP? Skype is there already. For a product we only use 7 minutes a day, you really have wonder just how solid the future valuations of the ILECs really are. Anyone hazard a guess as to how many minutes a day we spend online? Or on TV? I don�t have the state, but both are WAY more than 7 minutes, that�s for sure. For some of us, it�s more like 7 hours. Thanks for that inspiration, James!
Summing up, James had some great messages � some of hope and some of gloom. He posed the question � are we in the Woodstock phase, or the Altamount phase? Is it all about peace and love, or are we about to blow the whole thing up? He basically said �the complacency days� for incumbents are over. No doubt. Am not sure about it all blowing up � he had slide of an A-bomb mushroom cloud, so you know what he�s thinking! I think the telecoms are more likely to implode than explode, but for now, they have the market power.
That �now�, however, looks to be very fleeting. James gave some examples about how all the European PTTs are aggressively going after business in each other�s markets, much like the RBOCs have done in the US. This market is different though � it�s national carrier vs. national carrier, and is so contrary to the spirit of a unified EU market. Open competition will do that, of course, but this just looks like a zero sum game to me.
James simply likened it to MAD, another nuclear age reference. He gave a chilling example of a German carrier offering broadband to French subscribers with aggressive pricing and great bandwidth. Is this a war the Germans can actually win? Maybe. Memories are long in Europe, and you have to wonder what kind of port blocking schemes will pop up as this trend gains momentum. What true Frenchman would really want to get their broadband from Germany? The US and Canadian markets have their own problems, but nothing like this. With that said, James wrapped up by saying resistance is futile � you know how that one goes.
OK, they�re serving wine and dinner now on the plane � French wine. And earlier I had a German beer. I better stop now�..
Skype
There�s no doubt that Niklas Zennstrom has got star power in the VoIP universe. From what I could tell, this was the first presentation of the show that had an overflow room to handle those who couldn�t get a seat in the room he was speaking in. It�s possible that Jeff�s keynote had overflow, but I think this was the most anticipated presentation of the show. He�s certainly the local hero, and it was great to see him in this setting.
For anyone who saw him speak at VON Canada (and I can probably count them on one hand among those here), there wasn�t much new in his message, with maybe a few numbers being updated on paid subscribers. At its core, Skype�s success is rooted in simplicity - it�s just so easy to use, at least for consumers. In terms of the trends behind this, Niklas points to the growing penetration of broadband as the foundation. Building on this, broadband allows for packetized voice to travel over the Net, and increasingly, telephony is becoming a software-based Internet application. In this environment, the economics of voice quickly fall to zero, and so far, Skype�s customer acquisition costs have been practically nil, and they�ve been able to scale with demand at little added cost.
The story still holds together well, though, and Skype would appear to be the first truly disruptive player in IP that has a global reach. I think that�s pretty significant, and I can�t help but reiterate one of Niklas�s key points � they�ve done it spending ZERO dollars on marketing. Pretty incredible if you ask me. That said, they actually had some nice goodies in the press room with earbuds and a SkypeOut trial package � those disappeared faster than anything on the table. So they�ve haven�t quite spent zero on marketing � maybe a few thousand dollars.
On the marketing front, though, there was an interesting item that�s old news by now for anyone following the telecom press. They�ve announced an affiliate program, which really confirms the power of the Net as a viral marketing tool. Basically, anyone getting others to sign up for premium (paid) services from Skype gets a modest commission.
This sounds very much like a page from Google, and I think that�s the best model for Skype to follow. The community is all Internet based, and users see the value of using Skype to communicate within this community. Of course, that�s the rub, as Skype is still at heart a closed system, which is contrary to the open nature of software and especially the IP community these days.
Along those lines, Niklas cited the Google maxim of �do no evil� to keep its credibility with customers. He certainly prides Skype in its honesty with users � it�s just a great voice application � there�s no marketing hype, no advertising, no spam, no viruses. These are solid virtues, no doubt, but I suspect they will be harder to uphold as Skype evolves its business model around revenues rather than free downloads.
And the �do no evil� mantra may ring hollow once Skype starts getting to be Google-sized, and they still don�t open up. It�s not enough to say they use SIP for their paid services � that�s a given. As the Open Source trend builds momentum, there�s a danger that Skype could start to look more like Microsoft in terms of having the dominant OS for Internet voice.
Finally, I couldn�t help but notice the URL on Niklas�s final slide. I haven�t seen any one else pick up on this, but it was a link to their jobs page. Interesting.
www.Skype.com/company/jobs
Subtle, no? An invitation to join the Force, or maybe the Dark Side? Maybe it�s time for the Open Source community to find its way into Skype and lead the charge from the inside out. Don�t worry, Niklas � I�m not advocating a palace coup! Skype is the poster child for VoIP, and I think we all want to see its success continue and really challenge the status quo. They�re in a better position than anyone to do that, even Vonage, although that�s another topic.
While we�re talking disruption and transformational forces, I�d like to note three companies I saw this week who, in my books, fall into that bucket�.
Popular Telephony � I briefly mentioned them in an early VON Europe posting. Peer to peer is just as radical as VoIP, and I believe it is one of the big trends shaping IP, right up there with WiFi/WiMax, and maybe even IMS. This is especially true for serverless P2P, which allows for theoretically unlimited scalability, at little or no additional cost.
What Skype is doing with P2P in the mass market for VoIP, Popular Telephony is trying to do the same in the enterprise market. In this context, it�s interesting to see they had a joint announcement this week, as Popular Telephony starts making a serious push with enterprise P2P. It�s also interesting to note that both have now made moves for mobility solutions, another sign that P2P is ready to grow beyond being PC-based.
Nimcat Networks � I also mentioned them along with Popular Telephony the other day. I wanted to mention them in the context of P2P as another example of how this technology is starting to find applications with real business models. Their nimX solution is targeted squarely at the low end of the business telephony market, and is a great example of how serverless P2P can be productized to address a specific need better than anything that�s out there today. As their CEO, Mahshad Koohgoli said, �SMBs � that�s where the pain is for carriers�. I don�t think the PBX vendors have much to worry about here, but this is exactly the kind of offering that brings IP to an even broader audience. I say bring it on.
Telio � while practically unknown in North America, they�re starting to look like the Vonage of Europe. Based in Norway, they�ve passed the 50,000 mark, which in absolute terms, puts them in the same league as AT&T�s CallVantage. Hmmm.
On relative terms � as James Enck points out � on a per capita basis, Telio�s numbers would ramp up to 3.5 million if they were in the US. That would put them ahead of everyone globally except Yahoo Broadband in Japan among those selling replacement line VoIP. Scary stuff. They just went public, and of course their market cap is nothing like AT&T, but financial analysts should start looking at them as the prototype for valuing public VoIP pureplays.
They have a very clean business in that they haven�t reinvented themselves in the way that the publicly traded US VoIP plays like Primus, 8x8 and Voiceglo have. They have no baggage � it�s just pure VoIP built by sharp people who really understand the technology. Ever notice how so much of the good stuff in VoIP is coming out of Scandanavia? Skype, Telio, GIPS, etc. More kudos to Jeff in picking Stockholm for this year�s show � his instincts are so on the money. He�s always in the right place at the right time.
James Enck, European Telecom Analyst with Daiwa Securities
There weren�t many analysts at the show, and James may have been the only one from Europe. I wish I had a chance to meet him, but I�ll do my best here to relay what he had to say.
James gave a great overview of what�s happening with VoIP in Europe, and cited Free Telecom, France Telecom and Skype as being the market leaders. By his count, they collectively have about 2.3 million users in Europe. Perhaps more importantly, he noted that VoIP has reached roughly 30% penetration of BB in Europe, and how good that was for only being out there for 2 years. To me, it�s just another proof point about how quickly VoIP is happening � just wait until numbers start coming out of China. I�m not tracking this, but I have no doubt they will be huge, and will look like it�s all just happened overnight � which is probably not very far from the truth.
Another interesting stat � James estimates that Skype users are Skyping an average of 7 minutes a day. I�m sure the vast majority of this is free minutes, but he noted this number is comparable to PSTN usage. That�s pretty interesting. Incredible how people�s habits will change when something really good comes along � or something that better, or just plain easier to use. Didn�t take long for Skype to catch up to PSTN! There�s just something inherently appealing about something that�s free and works really well�..
What�s even more scary? In places like the US and Hong Kong, the average usage for wireless is about 15 minutes a day. Double the PSTN! The ascendancy of wireless over wireline has really only been in the last 10 years max � really 5 for the good stuff. And this is all TDM traffic. What�s going to happen when wireless goes IP? Skype is there already. For a product we only use 7 minutes a day, you really have wonder just how solid the future valuations of the ILECs really are. Anyone hazard a guess as to how many minutes a day we spend online? Or on TV? I don�t have the state, but both are WAY more than 7 minutes, that�s for sure. For some of us, it�s more like 7 hours. Thanks for that inspiration, James!
Summing up, James had some great messages � some of hope and some of gloom. He posed the question � are we in the Woodstock phase, or the Altamount phase? Is it all about peace and love, or are we about to blow the whole thing up? He basically said �the complacency days� for incumbents are over. No doubt. Am not sure about it all blowing up � he had slide of an A-bomb mushroom cloud, so you know what he�s thinking! I think the telecoms are more likely to implode than explode, but for now, they have the market power.
That �now�, however, looks to be very fleeting. James gave some examples about how all the European PTTs are aggressively going after business in each other�s markets, much like the RBOCs have done in the US. This market is different though � it�s national carrier vs. national carrier, and is so contrary to the spirit of a unified EU market. Open competition will do that, of course, but this just looks like a zero sum game to me.
James simply likened it to MAD, another nuclear age reference. He gave a chilling example of a German carrier offering broadband to French subscribers with aggressive pricing and great bandwidth. Is this a war the Germans can actually win? Maybe. Memories are long in Europe, and you have to wonder what kind of port blocking schemes will pop up as this trend gains momentum. What true Frenchman would really want to get their broadband from Germany? The US and Canadian markets have their own problems, but nothing like this. With that said, James wrapped up by saying resistance is futile � you know how that one goes.
OK, they�re serving wine and dinner now on the plane � French wine. And earlier I had a German beer. I better stop now�..
Thursday, May 26, 2005
Ooh baby, baby , it's a wired world... it's hard to get by with just dial tone...
Ruminations on last night's VON party. Just putting my VON spin on the Cat Stevens classic "Wild World". Wouldn't that be a great tag line for an MVNO? Just remember where you heard this first! And how about the Who's "Going Mobile"? Beep beep. Calling Richard Branson....
Jeff knows how to put on a party, and last night was just great. The Herding Cats have been a VON staple for many parties and they're as good as it gets for a party band that does great covers. Was so neat seeing them here in Stockholm. They had never ending requests for ABBA from the homies - I missed the early set, and am told they did an ABBA tune - would have liked to have seen that...
Everyone taking tons of pix on their mobile devices, and I'm sure Jeff will be posting a bunch any time now...
Just had to mention how peaceful it was walking home at 2:30 in the morning, and it's practically broad daylight - you gotta like that.
Back to the floor now - show wraps up this afternoon - will post later on.
Still coming - my posting about earlier talks from Niklas Zennstrom and James Enck.
Jeff knows how to put on a party, and last night was just great. The Herding Cats have been a VON staple for many parties and they're as good as it gets for a party band that does great covers. Was so neat seeing them here in Stockholm. They had never ending requests for ABBA from the homies - I missed the early set, and am told they did an ABBA tune - would have liked to have seen that...
Everyone taking tons of pix on their mobile devices, and I'm sure Jeff will be posting a bunch any time now...
Just had to mention how peaceful it was walking home at 2:30 in the morning, and it's practically broad daylight - you gotta like that.
Back to the floor now - show wraps up this afternoon - will post later on.
Still coming - my posting about earlier talks from Niklas Zennstrom and James Enck.
Wednesday, May 25, 2005
VON Europe - Day 2/3 Update
My previous posting was very rushed at the end of Day 1. Day 3 is just about done now, and the show has been great so far. The show floor opened last night, and the energy was really strong. Lots of exhibitors and traffic, and as you may heard by now if you're following other coverage, this is the best VON Europe yet, and people are here from over 65 countries. That's a pretty good cross section of the global telecom marketplace, and no doubt, there's a lot of good learning going on.
The only issue for me has been the spotty WiFi access, which is the main reason I haven't been able to post since Monday. Just have a few minutes to post, so here are some highlights to pass on...
Jeff's keynote - Shift Happens. Love the title, and it reflects what's happening now with IP. He gave a great example of this in his flight to Stockholm last weekend. Flying at 35,000 feet, he was able to make Skype calls with great sound quality and minimal delay. Gives a whole new meaning to the mile high club, and really shows you what mobility can mean these days. For more detail and photos of his experience, check out Jeff's blog posting.
Also, I thought Jeff made a very cogent point towards the end of his talk. As we slip into parenthood, it seems inevitable - no matter how hard we try - that a generation gap develops with our kids. When we were kids, Jeff noted this gap was shaped and based on things like music or politics or fashion. Well, today that gap is about technology, and I totally agree with that. This is not a trivial point for anyone connected to IP, and it reminds me of one of Jeff's famous messages from a recent VON - if you have product managers over the age of 30, you're in trouble. As they say on the Simpsons, it's funny...because it's true.
Speaking of being on the wrong end of the gap, my battery is dying, and there's no way I can finish my posting now. Will be back as soon as I can - want to share my thoughts about presentations by Niklas Zennstrom and James Enck.
Until then, I just had to share this photo with you. I don't have Jeff's mega digital camera - it's pretty cool, but check this photo out. It's a really neat public art installation - floating serenely on the water just outside the Royal Palace. Don't see stuff like this every day. Thanks to Robin Batt for taking the photo!
Apologies - the photo below is cut off on the right side, so you can only see part of the image. There is also a floating nose, believe it or not. I don't have access to a photo editor right now, but will fix this and re-post in the next day or so. Hope you come back - it's worth seeing!
![Ladyinlake VON Europe[1].jpg](http://www.ipcom-insights.com/blog/jon/archives/Ladyinlake%20VON%20Europe%5B1%5D.jpg)
The only issue for me has been the spotty WiFi access, which is the main reason I haven't been able to post since Monday. Just have a few minutes to post, so here are some highlights to pass on...
Jeff's keynote - Shift Happens. Love the title, and it reflects what's happening now with IP. He gave a great example of this in his flight to Stockholm last weekend. Flying at 35,000 feet, he was able to make Skype calls with great sound quality and minimal delay. Gives a whole new meaning to the mile high club, and really shows you what mobility can mean these days. For more detail and photos of his experience, check out Jeff's blog posting.
Also, I thought Jeff made a very cogent point towards the end of his talk. As we slip into parenthood, it seems inevitable - no matter how hard we try - that a generation gap develops with our kids. When we were kids, Jeff noted this gap was shaped and based on things like music or politics or fashion. Well, today that gap is about technology, and I totally agree with that. This is not a trivial point for anyone connected to IP, and it reminds me of one of Jeff's famous messages from a recent VON - if you have product managers over the age of 30, you're in trouble. As they say on the Simpsons, it's funny...because it's true.
Speaking of being on the wrong end of the gap, my battery is dying, and there's no way I can finish my posting now. Will be back as soon as I can - want to share my thoughts about presentations by Niklas Zennstrom and James Enck.
Until then, I just had to share this photo with you. I don't have Jeff's mega digital camera - it's pretty cool, but check this photo out. It's a really neat public art installation - floating serenely on the water just outside the Royal Palace. Don't see stuff like this every day. Thanks to Robin Batt for taking the photo!
Apologies - the photo below is cut off on the right side, so you can only see part of the image. There is also a floating nose, believe it or not. I don't have access to a photo editor right now, but will fix this and re-post in the next day or so. Hope you come back - it's worth seeing!
Monday, May 23, 2005
VON Europe - Day 1 - No Limits
Just finished Day 1 here in sunny Stockholm. Today was pre-con sessions, so things don't get into full gear until tomorrow. Definitely looking forward to Jeff's opening remarks tomorrow, as well as perspectives from the leading players you'd want to hear from in Europe, namely Skype, Nokia and Ericsson. I'll be posting on these tomorrow.
Was only able to catch one session, titled Plug and Play Telephony. The focus was on peer to peer, and how this technology is starting to find its legs in enterprise markets. I strongly believe that P2P has the same kind of disruptive capacity as VoIP does. Two of the strongest voices for small business applications were on the panel - Mahshad Koohgholi of Nimcat Networks, and Dmitry Goroshevsky from Popular Telephony.
Their messaging was consistent in the sense that SMBs are not well served in terms of IP solutions, and P2P is a great premise-based approach. Enterprises will be drawn to P2P because it is simple to deploy, economical, and delivers a rich feature set. The value proposition is straightforward at face value, but as the moderator, Bob Emmerson said, "it sounds too good to be true". Certainly, at face value, P2P promises a lot, and if it can deliver, the upside is pretty exciting.
My take from the audience was healthy skepticism, especially for issues such as billing and security. These are certainly legitimate concerns, but the panelists feel these problems are in hand.
There's more to the story, but the venue is shutting down now. Will finish this thread tomorrow.
One last thing, though - watch for some interesting news tomorrow about Popular Telephony and Skype - this is a good indicator of how P2P and VoIP is finding common ground for business applications, and will be a great proof point for how well the technology really works.
And as Dmitry says, there are no theoretical limits to P2P!!! If that can be really proven, we'll definitely have a lot to think about. OK, they're cutting the connection, gotta go now...
Was only able to catch one session, titled Plug and Play Telephony. The focus was on peer to peer, and how this technology is starting to find its legs in enterprise markets. I strongly believe that P2P has the same kind of disruptive capacity as VoIP does. Two of the strongest voices for small business applications were on the panel - Mahshad Koohgholi of Nimcat Networks, and Dmitry Goroshevsky from Popular Telephony.
Their messaging was consistent in the sense that SMBs are not well served in terms of IP solutions, and P2P is a great premise-based approach. Enterprises will be drawn to P2P because it is simple to deploy, economical, and delivers a rich feature set. The value proposition is straightforward at face value, but as the moderator, Bob Emmerson said, "it sounds too good to be true". Certainly, at face value, P2P promises a lot, and if it can deliver, the upside is pretty exciting.
My take from the audience was healthy skepticism, especially for issues such as billing and security. These are certainly legitimate concerns, but the panelists feel these problems are in hand.
There's more to the story, but the venue is shutting down now. Will finish this thread tomorrow.
One last thing, though - watch for some interesting news tomorrow about Popular Telephony and Skype - this is a good indicator of how P2P and VoIP is finding common ground for business applications, and will be a great proof point for how well the technology really works.
And as Dmitry says, there are no theoretical limits to P2P!!! If that can be really proven, we'll definitely have a lot to think about. OK, they're cutting the connection, gotta go now...
Friday, May 20, 2005
FCC's 911 Decision - Putting Their Foot Down - or Somewhere
Yesterday's FCC decision has attracted a lot of media attention. It strikes me as a knee jerk reaction to the 911 failures that recently happened in places like Texas and Connecticut with VoIP subscribers.
I'm not going to editorialize much here - I'll let the press coverage do the talking. In the past couple of days I've done 5 stories on this topic with the print media, and one this morning with CBS Radio. This amount of coverage in itself is noteworthy. It's great for my profile, of course, but I think it also speaks to the fear factor that's driving a lot of this.
Clearly, the FCC can't be seen as idle when fatal events occur and are being blamed on 911 letdowns. I don't know how many times 911 mishaps have resulted in fatalities with subscribers to incumbent carriers, but the nature of the FCC's decision seems heavy handed in the context of its potential impact on the emerging VoIP sector.
No doubt, the public good must remain paramount, but do the means justify the ends? We all know that the VoIP providers need a solution, and this has been coming for a while, but the realities of complying within 120 days are daunting. It's taken wireless over 15 years to get to this point with 911 - consumer VoIP is barely two years old - it just doesn't add up.
The implication here is that the Kevin Martin administration may end up being less friendly to VoIP, and more friendly to the RBOCs, who would not mind seeing a few roadblocks out there for VoIP. They have enough to worry about with the MSOs and wireless substitution, and this would be one less thing on their list - at least for now.
It's hard not to feel this way when you consider the FCC's rather tepid response so far to port blocking, which is hardly fostering a level playing field.
Enough of that. Here are some of the stories I was cited in on this topic...
Today's Wall Street Journal - FCC Wants 911 On Web Phones Within 4 Months (link may only be good for today - unless you're a subscriber - I can send you a soft copy - just let me know)
Forbes.com - Cost of Net Phone Calls May Rise
Light Reading - FCC Will Force VoIP E911
Also discussed this story with...
- CBS Radio - this morning - may have run already at 10am - no archive
- Dow Jones Newswire
- Total Telecom Magazine
For further insight, especially on more constructive solutions to the problem, please see Jeff Pulver's blog. Yesterday Jeff also issued his own statement which I think captures how a lot of us feel about the decision and what it means for VoIP.
I'm not going to editorialize much here - I'll let the press coverage do the talking. In the past couple of days I've done 5 stories on this topic with the print media, and one this morning with CBS Radio. This amount of coverage in itself is noteworthy. It's great for my profile, of course, but I think it also speaks to the fear factor that's driving a lot of this.
Clearly, the FCC can't be seen as idle when fatal events occur and are being blamed on 911 letdowns. I don't know how many times 911 mishaps have resulted in fatalities with subscribers to incumbent carriers, but the nature of the FCC's decision seems heavy handed in the context of its potential impact on the emerging VoIP sector.
No doubt, the public good must remain paramount, but do the means justify the ends? We all know that the VoIP providers need a solution, and this has been coming for a while, but the realities of complying within 120 days are daunting. It's taken wireless over 15 years to get to this point with 911 - consumer VoIP is barely two years old - it just doesn't add up.
The implication here is that the Kevin Martin administration may end up being less friendly to VoIP, and more friendly to the RBOCs, who would not mind seeing a few roadblocks out there for VoIP. They have enough to worry about with the MSOs and wireless substitution, and this would be one less thing on their list - at least for now.
It's hard not to feel this way when you consider the FCC's rather tepid response so far to port blocking, which is hardly fostering a level playing field.
Enough of that. Here are some of the stories I was cited in on this topic...
Today's Wall Street Journal - FCC Wants 911 On Web Phones Within 4 Months (link may only be good for today - unless you're a subscriber - I can send you a soft copy - just let me know)
Forbes.com - Cost of Net Phone Calls May Rise
Light Reading - FCC Will Force VoIP E911
Also discussed this story with...
- CBS Radio - this morning - may have run already at 10am - no archive
- Dow Jones Newswire
- Total Telecom Magazine
For further insight, especially on more constructive solutions to the problem, please see Jeff Pulver's blog. Yesterday Jeff also issued his own statement which I think captures how a lot of us feel about the decision and what it means for VoIP.
I Love New York - Trip Highlights
It's really hard for a die-hard Red Sox fan to say this, but I always enjoy visting New York. This has been a busy week, and VON Europe is next week, so lots to talk about. I'm just going to cite some highlights from my NYC visit, and tomorrow I'll comment on the FCC 911 decision - and next week I'll be posting from Stockholm. Hej!
Visit to Pulver.com Office
First, I spent Monday with Jeff Pulver and his team, and got my first taste of podcasting in their Pulver Radio studio. It's open format radio at its finest, but I think it's a great way to create dialog. I'll be blogging more about this soon, and will encourage others to podcast if they like. Feel free to contact me - jon@jarnoldassociates.com
I certainly plan to start podcasting on a regular basis. We did a few segments, and while rough around the edges, it's a start! Feel free to listen to these, or any other podcasts at the Pulver.com podcast archive.
Wireless Investor Conference
On Tuesday, I was on a panel addressing key trends in wireless for a Wall St. audience. The conference is run by the NYSSA - New York Society of Security Analysts. This is the third conference I've done with them, and they consistently get a strong roster and a healthy turnout.
What really struck me were the parallels between wireless and VoIP. Just as VoIP is very disruptive to the PSTN, WiFi/WiMax is equally disruptive to the existing cellular infrastructure. Over the course of the day, this became increasingly clear to me. This was one of my main messages, and it seems to me that the VoIP story will repeat itself with WiFi in the wireless world - which has all kinds of implications. I'd like to blog more on this later - stay tuned.
Mets/Reds Game
I was lucky enough to be the beneficiary of tickets that Jeff couldn't use on Tuesday night. Never been to Shea, so it was a real treat to go - thanks Jeff! The Red Sox fan in me would have loved it if Pedro pitched, but it wasn't his turn. Mets won 2-1 - a typical National League game - not much offense and solid defense. Ken Griffey Jr. made a highlight reel catch - which sure enough was on ESPN later on. Mets won it on a late 2 run homer - fans were loving it. NY fans are so vocal about their teams - as one would expect - and it's great to see 'em up close and personal.
Photo courtesy of Cody Willard, who runs a telecom hedge fund, and has a fun personal blog page - The Cody Blog - check it out. And thanks to his accomplice, John Czeban, for the camera phone!
Visit to Pulver.com Office
First, I spent Monday with Jeff Pulver and his team, and got my first taste of podcasting in their Pulver Radio studio. It's open format radio at its finest, but I think it's a great way to create dialog. I'll be blogging more about this soon, and will encourage others to podcast if they like. Feel free to contact me - jon@jarnoldassociates.com
I certainly plan to start podcasting on a regular basis. We did a few segments, and while rough around the edges, it's a start! Feel free to listen to these, or any other podcasts at the Pulver.com podcast archive.
Wireless Investor Conference
On Tuesday, I was on a panel addressing key trends in wireless for a Wall St. audience. The conference is run by the NYSSA - New York Society of Security Analysts. This is the third conference I've done with them, and they consistently get a strong roster and a healthy turnout.
What really struck me were the parallels between wireless and VoIP. Just as VoIP is very disruptive to the PSTN, WiFi/WiMax is equally disruptive to the existing cellular infrastructure. Over the course of the day, this became increasingly clear to me. This was one of my main messages, and it seems to me that the VoIP story will repeat itself with WiFi in the wireless world - which has all kinds of implications. I'd like to blog more on this later - stay tuned.
Mets/Reds Game
I was lucky enough to be the beneficiary of tickets that Jeff couldn't use on Tuesday night. Never been to Shea, so it was a real treat to go - thanks Jeff! The Red Sox fan in me would have loved it if Pedro pitched, but it wasn't his turn. Mets won 2-1 - a typical National League game - not much offense and solid defense. Ken Griffey Jr. made a highlight reel catch - which sure enough was on ESPN later on. Mets won it on a late 2 run homer - fans were loving it. NY fans are so vocal about their teams - as one would expect - and it's great to see 'em up close and personal.
Photo courtesy of Cody Willard, who runs a telecom hedge fund, and has a fun personal blog page - The Cody Blog - check it out. And thanks to his accomplice, John Czeban, for the camera phone!
Saturday, May 14, 2005
More Thoughts on the CRTC VoIP Ruling
To keep the ball rolling, I just wanted to share some keen insights from the blogs of Mark Evans and Alec Saunders about the ruling. Both are based here in Ontario, and have a local perspective. I haven't heard much stateside from bloggers, and would love to hear their take - and would gladly share it here.
That said, Jeff Pulver noted that in the long run, the CRTC may have made the right call. Maybe - just way too early to tell. Also, our market really is different from the US, so it's hard to make fair comparisons.
Sounds like Mark and I are on the same page. We both agree Canadians have been spoiled by affordable, reliable service, and the incumbent brand power is very strong. It's still their market to lose, and they have so many table stakes on their side that will be expensive for any competitor to match, let alone take away. However... there's nothing like a good shoot-out, and that's what we're going to get now.
For a year now, my mantra to the major US service providers is this: WATCH ONTARIO. We have the ultimate test lab for VoIP. Bell Canada is by far the most sophisticated ILEC in North America, and the same holds for Rogers in the cable space. And both can offer the quad play - voice, data, video and wireless. The US majors are a long way from doing this, let alone go head to head like this. Also, Ontario is on par with almost any US state in terms of being a great market. The critical mass is here - 11 million people, and it's the economic engine of Canada - it's by far the most affluent market here.
That said, Jeff Pulver noted that in the long run, the CRTC may have made the right call. Maybe - just way too early to tell. Also, our market really is different from the US, so it's hard to make fair comparisons.
Sounds like Mark and I are on the same page. We both agree Canadians have been spoiled by affordable, reliable service, and the incumbent brand power is very strong. It's still their market to lose, and they have so many table stakes on their side that will be expensive for any competitor to match, let alone take away. However... there's nothing like a good shoot-out, and that's what we're going to get now.
For a year now, my mantra to the major US service providers is this: WATCH ONTARIO. We have the ultimate test lab for VoIP. Bell Canada is by far the most sophisticated ILEC in North America, and the same holds for Rogers in the cable space. And both can offer the quad play - voice, data, video and wireless. The US majors are a long way from doing this, let alone go head to head like this. Also, Ontario is on par with almost any US state in terms of being a great market. The critical mass is here - 11 million people, and it's the economic engine of Canada - it's by far the most affluent market here.
Friday, May 13, 2005
VoIP Off and Running in Canada Now
Just a quick coda to yesterday's CRTC decision.
With yesterday's news, it's like the starting gun has fired, and everyone is off to the races - except the incumbents, of course. I would never count them out, that's for sure. They have plenty of resources and smarts to prevent them from being outflanked by competitors, and will certainly play their cards when ready. Until then, the beneficiaries of the CRTC ruling will be in the spotlight.
Two telltale signs that VoIP is out of the blocks now....
1. I'm hearing radio ads for Vonage. Heard them yesterday and this morning. They know the regs are in their favor, and they want consumers to know Vonage is available now. That's good marketing. And of course, just the fact that they're using mainstream media - anyone can do Internet ads. So, it looks like Vonage's $200 million is going to work right away!
2. My Mother called me today asking about VoIP. She's been hearing me talk about VoIP for years now, and finally it's starting to register. It's been in all the papers today, so the public is getting their first taste of what's coming. So, as with other new technologies, when your Mother starts talking about it, you know it's arrived. The pragmatist would also say it's time to sell! I wouldn't. VoIP is just getting started - it's time to buy.
Another indicator is the overall media coverage on the CRTC ruling. I appeared on ROB TV this morning - this is our main financial news network - similar to CNBC in the US. The web replay is only posted for a week, so click now if you want to see it!
Also, Ben Charny of CNET News cited me in his piece earlier today.
With yesterday's news, it's like the starting gun has fired, and everyone is off to the races - except the incumbents, of course. I would never count them out, that's for sure. They have plenty of resources and smarts to prevent them from being outflanked by competitors, and will certainly play their cards when ready. Until then, the beneficiaries of the CRTC ruling will be in the spotlight.
Two telltale signs that VoIP is out of the blocks now....
1. I'm hearing radio ads for Vonage. Heard them yesterday and this morning. They know the regs are in their favor, and they want consumers to know Vonage is available now. That's good marketing. And of course, just the fact that they're using mainstream media - anyone can do Internet ads. So, it looks like Vonage's $200 million is going to work right away!
2. My Mother called me today asking about VoIP. She's been hearing me talk about VoIP for years now, and finally it's starting to register. It's been in all the papers today, so the public is getting their first taste of what's coming. So, as with other new technologies, when your Mother starts talking about it, you know it's arrived. The pragmatist would also say it's time to sell! I wouldn't. VoIP is just getting started - it's time to buy.
Another indicator is the overall media coverage on the CRTC ruling. I appeared on ROB TV this morning - this is our main financial news network - similar to CNBC in the US. The web replay is only posted for a week, so click now if you want to see it!
Also, Ben Charny of CNET News cited me in his piece earlier today.
Thursday, May 12, 2005
Canada's VoIP Decision - Competition Rules
The news came as expected this afternoon - the CRTC will uphold its position, and competitors do not have to fear being squeezed out of the market by the incumbents - at least for now.
So, short term, competitors are the winners - cablecos, ISPs and virtual operators. The incumbents will have to watch the first wave come as competitors rush in and take what they can before incumbents can counter. It will be fascinating to watch, but in the end the consumer should come out ahead with more choice than they've ever had before. I supsect the early going will be about price and cheap telephony, which of course undermines the real value of IP. Once we get past this, things will get interesting, and hopefully more compelling in terms of cools features and apps.
Going to the source, here's the press release issued by the CRTC on the ruling after the lockup this afternoon in Gatineau, which is near Ottawa.
More on this tomorrow. I'll be commenting about the ruling at 8:15 in the morning on ROB TV, our major financial news channel.
So, short term, competitors are the winners - cablecos, ISPs and virtual operators. The incumbents will have to watch the first wave come as competitors rush in and take what they can before incumbents can counter. It will be fascinating to watch, but in the end the consumer should come out ahead with more choice than they've ever had before. I supsect the early going will be about price and cheap telephony, which of course undermines the real value of IP. Once we get past this, things will get interesting, and hopefully more compelling in terms of cools features and apps.
Going to the source, here's the press release issued by the CRTC on the ruling after the lockup this afternoon in Gatineau, which is near Ottawa.
More on this tomorrow. I'll be commenting about the ruling at 8:15 in the morning on ROB TV, our major financial news channel.
Big Day for VoIP in Canada
Today will likely be marked as the inflection point for VoIP's arrival in Canada, and perhaps more importantly, the end of the ILEC's monopoly hold on local service.
Later this afternoon, the CRTC will announce their long awaited decision on VoIP, and it's widely expected to favor the competitors, and not the incumbents. I've commented on this already in last week's postings, and won't rehash the basic issues here.
Presuming it goes that way, the public hearings from last September will have been for naught, and effectively delayed the market by about a year. In hindsight, I'm sure the competitors don't really mind, as they needed that time anyway to get their offerings right, and to properly complete their trials. And it seems to be paying off.
Not surprisingly, there has been lots of news leading up to today's decision. Two in particular....
First is the Rogers acquisition of Call Net for $330 million. Ted Rogers has always been his own man, and he continues to confound Bell Canada, his main rival here in Ontario.
Call Net is a mixed bag, and in Canada, they carry the Sprint name. Financially they're not in great shape, and about 40% of their revenues come from the declining long distance market. So, why buy, and why now?
Well, the timing lines up nicely with the CRTC date. Presuming it goes as expected, this will be good news for Rogers, and what better way to announce "I'm ready to go" than with this acquisition? Call Net has about 500,000 subscribers, so that puts them into the telecom business right away. Furthermore, they have a good presence in the business market, where Rogers does not yet play. So, this opens up another market, where they'll be going up against Bell again, as well as the likes of Telus and Allstream.
Another interesting twist is that Call Net gives them customers in markets they don't serve with cable. So, now they can be an irritant to cable competitors like Shaw or Videotron - or possibly make a deal with them.
And one cannot overlook the simple fact that acquiring Call Net further consolidates the market, and keeps it out of competitor hands. And really, in the telecom market, a $330 million buyout is not that big of a deal. So, Rogers may be acquiring a good business in decline, but at a manageable cost, and probably little downside risk.
For those not familiar with Rogers, this just adds one more piece to their growing presence in telecom. With their recent Microcell acquisition, they became the number 1 wireless provider in Canada. And with VoIP coming, Call Net will help jump start them on the wireline path. I can't think of any cableco that has this kind of reach, and you have to admire what they're doing. No doubt, Bell is not happy, especially since they could have locked up market leadership in wireless if they had taken Microcell. And here comes Rogers, again, putting another stake in Bell's sandbox.
Second is the Videotron's growing VoIP traction. Today they are reporting about 23,000 subscribers, again, timed nicely for the CRTC ruling. Considering their service is only available in parts of Montreal, and it's only been on the market a few months, their numbers look very positive. In fact, as they report, demand is so strong they can't keep up in terms of providing the hardware and getting technicians onsite to cutover the phone lines from Bell to Videotron.
I still find their pricing plans complicated, and once you add up all the costs, I'm not so sure the savings are that great. However, they clearly seemed to have struck a chord, although it's hard to tell if people are buying on price or they just want an alternative to Bell. I doubt Videotron is making money with VoIP, but they certainly seem to be taking away access lines from Bell, which is a new thing. Bell has experienced a minor loss in access lines - about 150,000 - which is really nothing compared to what the RBOCs are experiencing. To date, Bell's line losses have been to wireless, but I'd say the Videotron numbers are the first notable dent to their wireline numbers from another wireline source. Of course, Vonage and Primus are eating into this as well, but their numbers are not public, so it's harder to say how much pain they really are causing Bell.
So, on this day in particular, Bell no doubt has a lot of cable on its mind. Between Rogers in Ontario and Videotron in Quebec, the future looks anything but simple for Bell. I couldn't resist saying that! Bell has a nice ad campaign running now celeberating 125 years in Canada, and "simplicity" is their key theme.
Later this afternoon, the CRTC will announce their long awaited decision on VoIP, and it's widely expected to favor the competitors, and not the incumbents. I've commented on this already in last week's postings, and won't rehash the basic issues here.
Presuming it goes that way, the public hearings from last September will have been for naught, and effectively delayed the market by about a year. In hindsight, I'm sure the competitors don't really mind, as they needed that time anyway to get their offerings right, and to properly complete their trials. And it seems to be paying off.
Not surprisingly, there has been lots of news leading up to today's decision. Two in particular....
First is the Rogers acquisition of Call Net for $330 million. Ted Rogers has always been his own man, and he continues to confound Bell Canada, his main rival here in Ontario.
Call Net is a mixed bag, and in Canada, they carry the Sprint name. Financially they're not in great shape, and about 40% of their revenues come from the declining long distance market. So, why buy, and why now?
Well, the timing lines up nicely with the CRTC date. Presuming it goes as expected, this will be good news for Rogers, and what better way to announce "I'm ready to go" than with this acquisition? Call Net has about 500,000 subscribers, so that puts them into the telecom business right away. Furthermore, they have a good presence in the business market, where Rogers does not yet play. So, this opens up another market, where they'll be going up against Bell again, as well as the likes of Telus and Allstream.
Another interesting twist is that Call Net gives them customers in markets they don't serve with cable. So, now they can be an irritant to cable competitors like Shaw or Videotron - or possibly make a deal with them.
And one cannot overlook the simple fact that acquiring Call Net further consolidates the market, and keeps it out of competitor hands. And really, in the telecom market, a $330 million buyout is not that big of a deal. So, Rogers may be acquiring a good business in decline, but at a manageable cost, and probably little downside risk.
For those not familiar with Rogers, this just adds one more piece to their growing presence in telecom. With their recent Microcell acquisition, they became the number 1 wireless provider in Canada. And with VoIP coming, Call Net will help jump start them on the wireline path. I can't think of any cableco that has this kind of reach, and you have to admire what they're doing. No doubt, Bell is not happy, especially since they could have locked up market leadership in wireless if they had taken Microcell. And here comes Rogers, again, putting another stake in Bell's sandbox.
Second is the Videotron's growing VoIP traction. Today they are reporting about 23,000 subscribers, again, timed nicely for the CRTC ruling. Considering their service is only available in parts of Montreal, and it's only been on the market a few months, their numbers look very positive. In fact, as they report, demand is so strong they can't keep up in terms of providing the hardware and getting technicians onsite to cutover the phone lines from Bell to Videotron.
I still find their pricing plans complicated, and once you add up all the costs, I'm not so sure the savings are that great. However, they clearly seemed to have struck a chord, although it's hard to tell if people are buying on price or they just want an alternative to Bell. I doubt Videotron is making money with VoIP, but they certainly seem to be taking away access lines from Bell, which is a new thing. Bell has experienced a minor loss in access lines - about 150,000 - which is really nothing compared to what the RBOCs are experiencing. To date, Bell's line losses have been to wireless, but I'd say the Videotron numbers are the first notable dent to their wireline numbers from another wireline source. Of course, Vonage and Primus are eating into this as well, but their numbers are not public, so it's harder to say how much pain they really are causing Bell.
So, on this day in particular, Bell no doubt has a lot of cable on its mind. Between Rogers in Ontario and Videotron in Quebec, the future looks anything but simple for Bell. I couldn't resist saying that! Bell has a nice ad campaign running now celeberating 125 years in Canada, and "simplicity" is their key theme.
Friday, May 6, 2005
CRTC VoIP Decision Attracting More Attention
Just a quick post. Spoke to Ben Charny of CNET News this afternoon about the upcoming CRTC ruling on VoIP. He ran a story today about it, and cited my May 4 blog posting as an indication that the ruling will favor the competition over the incumbents.
It's great to see such an important ruling getting this kind of attention from south of the border. No doubt there will be more to come, especially after the ruling, which is slated for May 12.
Timing is everything. Turns out I'm meeting Vonage Canada that day for lunch, and I suspect they'll be in a good mood. I'll let you know if we have steak or hamburger.
It's great to see such an important ruling getting this kind of attention from south of the border. No doubt there will be more to come, especially after the ruling, which is slated for May 12.
Timing is everything. Turns out I'm meeting Vonage Canada that day for lunch, and I suspect they'll be in a good mood. I'll let you know if we have steak or hamburger.
Thursday, May 5, 2005
Vonage - Today's Funding Raises the Stakes
I don't usually get news this fresh, but Vonage has just raised another $200 million, which sends a clear signal they are in the deep end of the VoIP pool now.
One has to wonder where this all leads to, but it's pretty clear that an IPO is not in the cards for Vonage any time soon. This funding will go a long way to keeping them in the game as the stakes are getting much higher now. With this kind of money, they can keep spending to acquire subscribers, but it's hard to see how their cost per subscriber will ever get low enough to make them profitable.
That said, they really need to go for broke, or go home. In the US, they have emerged as the undisputed leader in terms of subscribers among the pure plays. CallVantage barely cracked 50,000, and Lingo isn't much further ahead of that. And among the virtual operators like 8x8, Voicelgo, Voicepulse, etc., I doubt the sum total of all their subs would be much more than a few months of growth for Vonage.
At this stage of the game, I'd say Vonage is the great white hope among VoIP pure plays, but they'll be hard pressed to maintain the 50% market share they have achieved until now. Realistically, the US consumer VoIP market is about Vonage and the telco and cableco majors. AOL has a large enough subscriber base to be a force, but I think it's late in the game for them, and they're really into VoIP to retain their existing - albeit diminishing - customer base, rather than ramp up with new customers.
Aside from this news, Vonage also had good news this week in terms of Verizon and getting access to their networks for 911. In light of their recent 911 problems, this is a good sign for all the pure plays, but esp for Vonage now that they have a new war chest to play with.
At minimum, today's news buys Vonage time - at least 6 months, I'd say, to stake out their space in VoIP amidst the inevitable onslaught of bundle-mania that will hit the market from the MSOs and RBOCs. This funding certainly pre-empts them being taken out of the market any time soon, so now it's all about keeping up with Tier 1s, and finding a way to battle the bundle.
I like their move with UT Starcomm, and I'd say, the sooner the better to make it interesting for the competition. Another thought - use some of that money to acquire really good apps developers who can create exciting offerings that take advantage of VoIP and mobility.
One has to wonder where this all leads to, but it's pretty clear that an IPO is not in the cards for Vonage any time soon. This funding will go a long way to keeping them in the game as the stakes are getting much higher now. With this kind of money, they can keep spending to acquire subscribers, but it's hard to see how their cost per subscriber will ever get low enough to make them profitable.
That said, they really need to go for broke, or go home. In the US, they have emerged as the undisputed leader in terms of subscribers among the pure plays. CallVantage barely cracked 50,000, and Lingo isn't much further ahead of that. And among the virtual operators like 8x8, Voicelgo, Voicepulse, etc., I doubt the sum total of all their subs would be much more than a few months of growth for Vonage.
At this stage of the game, I'd say Vonage is the great white hope among VoIP pure plays, but they'll be hard pressed to maintain the 50% market share they have achieved until now. Realistically, the US consumer VoIP market is about Vonage and the telco and cableco majors. AOL has a large enough subscriber base to be a force, but I think it's late in the game for them, and they're really into VoIP to retain their existing - albeit diminishing - customer base, rather than ramp up with new customers.
Aside from this news, Vonage also had good news this week in terms of Verizon and getting access to their networks for 911. In light of their recent 911 problems, this is a good sign for all the pure plays, but esp for Vonage now that they have a new war chest to play with.
At minimum, today's news buys Vonage time - at least 6 months, I'd say, to stake out their space in VoIP amidst the inevitable onslaught of bundle-mania that will hit the market from the MSOs and RBOCs. This funding certainly pre-empts them being taken out of the market any time soon, so now it's all about keeping up with Tier 1s, and finding a way to battle the bundle.
I like their move with UT Starcomm, and I'd say, the sooner the better to make it interesting for the competition. Another thought - use some of that money to acquire really good apps developers who can create exciting offerings that take advantage of VoIP and mobility.
Wednesday, May 4, 2005
Canada's VoIP Regulations Update - Calling Michael Powell....
May 12 is the magic date for the CRTC's ruling on the status of VoIP, and the telecom and cable operators are all waiting anxiously. The ruling could come any time before the 12th - or maybe not until after. Regardless, the consensus is that this has gone on too long, and these delays have no doubt held back the progress of VoIP for Canadian consumers.
There are a variety of reasons as to why VoIP in Canada lags the US, and this is certainly one of them. This scenario may seem odd to Americans - and most other countries for that matter - as the trend just about everywhere has been to not regulate, and just use a "light touch" as the FCC would say.
I don't pretend to have all the answers, and no one knows for sure how the rulings will go. Over the past few days, I've been talking to others about it - analysts, carriers, vendors - and am seeing a fairly consistent picture. Unfortunately, it's not one that Michael Powell would have drawn.
My sense is that the status quo will prevail from the CRTC, and that's the story I'm hearing from others as well. Essentially, this means that the Canadian ILECs will be held to a different set of rules and regs than everyone else, which ultimately makes it impossible for them to be competitive in offering VoIP to consumers.
So while everyone else can offer unregulated VoIP - cablecos, virtual operators, ISPs - the incumbents will have to offer VoIP on the same basis they offer POTS to consumers. This means they have to file tariffs in advance to make pricing changes, they have to provide carrier grade QoS, they have to provide 911, and they would be regulated on winback promotions to re-capture subscribers recently lost to competitors.
Because the ILECs are so dominant in Canada, regulatory policy here is largely driven by the need to support competition and choice for the consumer. Like the US, Canada has a handful of big ILECs, with Bell, Telus and Aliant accounting for most of the market. Competition has existed here for some time, but the impact has been negligible as the incumbents still control something like 98% of access lines. In that context, it's understandable why the CRTC wants to support competition.
The incumbents would argue that their market power in POTS does not necessarily translate to VoIP, and it's unfair to give everyone else an advantage - especially when most of them are large cablecos, ISPs or carriers, namely Rogers, Shaw, Videotron, AOL Canada and Call Net (Sprint Canada). And among the pure play virtual operators, Vonage and Primus are the leading players, and are not fledgling startups. All of these operators can market VoIP any way they choose, and they all have the capability to take a piece of the incumbent's market.
If the regulations stand, it would appear that the cablecos stand to gain the most, and the incumbents stand to lose the most. Rogers will probably emerge as the strongest competitor, simply because they play in the largest, richest market, and they're the only cableco I know who can truly offer the Quad Play. In fact, Rogers is the largest wireless operator in Canada. I don't think any US MSO can compete as well as Rogers in this regard. Of course, execution is another story, and it remains to be seen who has the best game plan and value proposition.
So, what's a Bell or a Telus to do in this scenario? On paper, they could just go out of region and offer unregulated VoIP in each other's markets. That's not likely to happen, and it would never be economical. More likely, they will focus on the brand and reinforce that consumers know what they're getting with them. And of course, they'll tinker with the bundles, and try make LD as inexpensive as possible to offset VoIP's natural price advantage. But will they offer VoIP as a POTS replacement? The economics wouldn't be there, but maybe they could offer it as a cheap second line that's really feature rich, with cool applications that are ahead of what everyone else has. Of course, we don't know what those cool apps will be, but if anyone has the resources to find out, it's the incumbents. Maybe they should also see what advice Michael Powell might have for them - I think they're going to need it.
Stay tuned.
There are a variety of reasons as to why VoIP in Canada lags the US, and this is certainly one of them. This scenario may seem odd to Americans - and most other countries for that matter - as the trend just about everywhere has been to not regulate, and just use a "light touch" as the FCC would say.
I don't pretend to have all the answers, and no one knows for sure how the rulings will go. Over the past few days, I've been talking to others about it - analysts, carriers, vendors - and am seeing a fairly consistent picture. Unfortunately, it's not one that Michael Powell would have drawn.
My sense is that the status quo will prevail from the CRTC, and that's the story I'm hearing from others as well. Essentially, this means that the Canadian ILECs will be held to a different set of rules and regs than everyone else, which ultimately makes it impossible for them to be competitive in offering VoIP to consumers.
So while everyone else can offer unregulated VoIP - cablecos, virtual operators, ISPs - the incumbents will have to offer VoIP on the same basis they offer POTS to consumers. This means they have to file tariffs in advance to make pricing changes, they have to provide carrier grade QoS, they have to provide 911, and they would be regulated on winback promotions to re-capture subscribers recently lost to competitors.
Because the ILECs are so dominant in Canada, regulatory policy here is largely driven by the need to support competition and choice for the consumer. Like the US, Canada has a handful of big ILECs, with Bell, Telus and Aliant accounting for most of the market. Competition has existed here for some time, but the impact has been negligible as the incumbents still control something like 98% of access lines. In that context, it's understandable why the CRTC wants to support competition.
The incumbents would argue that their market power in POTS does not necessarily translate to VoIP, and it's unfair to give everyone else an advantage - especially when most of them are large cablecos, ISPs or carriers, namely Rogers, Shaw, Videotron, AOL Canada and Call Net (Sprint Canada). And among the pure play virtual operators, Vonage and Primus are the leading players, and are not fledgling startups. All of these operators can market VoIP any way they choose, and they all have the capability to take a piece of the incumbent's market.
If the regulations stand, it would appear that the cablecos stand to gain the most, and the incumbents stand to lose the most. Rogers will probably emerge as the strongest competitor, simply because they play in the largest, richest market, and they're the only cableco I know who can truly offer the Quad Play. In fact, Rogers is the largest wireless operator in Canada. I don't think any US MSO can compete as well as Rogers in this regard. Of course, execution is another story, and it remains to be seen who has the best game plan and value proposition.
So, what's a Bell or a Telus to do in this scenario? On paper, they could just go out of region and offer unregulated VoIP in each other's markets. That's not likely to happen, and it would never be economical. More likely, they will focus on the brand and reinforce that consumers know what they're getting with them. And of course, they'll tinker with the bundles, and try make LD as inexpensive as possible to offset VoIP's natural price advantage. But will they offer VoIP as a POTS replacement? The economics wouldn't be there, but maybe they could offer it as a cheap second line that's really feature rich, with cool applications that are ahead of what everyone else has. Of course, we don't know what those cool apps will be, but if anyone has the resources to find out, it's the incumbents. Maybe they should also see what advice Michael Powell might have for them - I think they're going to need it.
Stay tuned.
Sunday, May 1, 2005
<strong>RLECs � What the <em>Other</em> 1,500 Carriers Are Doing With VoIP</strong>
It's been a long time since my last post, and I feel badly about that. Most of the week was tied up being on the road and preparing for the conference you're about to read about.
Last Thursday, I presented an overview of VoIP to an audience of RLECs and IOCs. This was part of the annual meeting of ANPI � Associated Network Partners Inc. � in Las Vegas. ANPI represents about 325 RLECs and IOCs, and is a good snapshot of what the roughly 1,500 operators in this space are doing with VoIP in the US.
The focus of the conference was on convergence and what it means for this market. These carriers typically have fewer than 10,000 subscribers, and many have less than 5,000. So, the economics are very different here, as are the needs of their subscribers. However, all these carriers are facing the same competitive pressures, and they were here to learn more about what VoIP can do for them.
ANPI is offering a practical solution and roadmap for VoIP. For most of these operators, VoIP is new, as are the competitive pressures they are seeing these days. They have limited means and capabilities to integrate VoIP in their networks. To address that, ANPI has developed a turnkey solution for members, branded as �No Boundaries�. This is a wholesale offering where they have put together all the pieces from various nextgen elements, including the media gateway, softphone, wireless access, OSS and QoS.
ANPI has partnered with vendors such as Versatel, myJabber, Brix Networks and WaveRider, all of whom are well positioned to meet the needs of this market. To support this as a facilities-based offering, No Boundaries would ride over ANPI�s core VoIP network, which is housed out of their co-location facility in Las Vegas.
Perhaps more importantly, they understand that they are a good fit for this market, and represent a realistic alternative to the legacy vendors many of these carriers have long been dealing with. Based on a show of hands from the audience � about 200 strong � about 60% are using Nortel switches. Otherwise, there was a smattering of Lucent and Siemens, and only a handful are using nextgen solutions.
I really think ANPI is on to something good here, and they are focused on educating their members about VoIP and why it�s important to their future. During conversations with members, my sense is that VoIP is still very novel to these operators, and they are facing more pressing concerns now, such as how to compete against wireless plans being offered now directly from carriers � as opposed the packages they�re authorized to resell. Or, how to compete against MSOs, who are starting to encroach their territory. Once the cablecos get in with video, voice won�t be far behind, and this is a real concern for ANPI members. Another big issue is the future of RUS subsidies, which are essential to the financial viability of many IOCs.
All these issues are real and daunting. Hopefully ANPI members are now starting to see how VoIP can give them the tools to compete, and this was the subject of my presentation. I certainly applaud ANPI�s efforts to educate their members, and utilize their strength in numbers as an economical way to give members a roadmap for VoIP, as well as providing the technical and marketing support resources that members will need.
Here's a grainy photo of me during my presentation...
View image
Last Thursday, I presented an overview of VoIP to an audience of RLECs and IOCs. This was part of the annual meeting of ANPI � Associated Network Partners Inc. � in Las Vegas. ANPI represents about 325 RLECs and IOCs, and is a good snapshot of what the roughly 1,500 operators in this space are doing with VoIP in the US.
The focus of the conference was on convergence and what it means for this market. These carriers typically have fewer than 10,000 subscribers, and many have less than 5,000. So, the economics are very different here, as are the needs of their subscribers. However, all these carriers are facing the same competitive pressures, and they were here to learn more about what VoIP can do for them.
ANPI is offering a practical solution and roadmap for VoIP. For most of these operators, VoIP is new, as are the competitive pressures they are seeing these days. They have limited means and capabilities to integrate VoIP in their networks. To address that, ANPI has developed a turnkey solution for members, branded as �No Boundaries�. This is a wholesale offering where they have put together all the pieces from various nextgen elements, including the media gateway, softphone, wireless access, OSS and QoS.
ANPI has partnered with vendors such as Versatel, myJabber, Brix Networks and WaveRider, all of whom are well positioned to meet the needs of this market. To support this as a facilities-based offering, No Boundaries would ride over ANPI�s core VoIP network, which is housed out of their co-location facility in Las Vegas.
Perhaps more importantly, they understand that they are a good fit for this market, and represent a realistic alternative to the legacy vendors many of these carriers have long been dealing with. Based on a show of hands from the audience � about 200 strong � about 60% are using Nortel switches. Otherwise, there was a smattering of Lucent and Siemens, and only a handful are using nextgen solutions.
I really think ANPI is on to something good here, and they are focused on educating their members about VoIP and why it�s important to their future. During conversations with members, my sense is that VoIP is still very novel to these operators, and they are facing more pressing concerns now, such as how to compete against wireless plans being offered now directly from carriers � as opposed the packages they�re authorized to resell. Or, how to compete against MSOs, who are starting to encroach their territory. Once the cablecos get in with video, voice won�t be far behind, and this is a real concern for ANPI members. Another big issue is the future of RUS subsidies, which are essential to the financial viability of many IOCs.
All these issues are real and daunting. Hopefully ANPI members are now starting to see how VoIP can give them the tools to compete, and this was the subject of my presentation. I certainly applaud ANPI�s efforts to educate their members, and utilize their strength in numbers as an economical way to give members a roadmap for VoIP, as well as providing the technical and marketing support resources that members will need.
Here's a grainy photo of me during my presentation...
View image
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