I'm not so sure how great our minds are, but the title of this post just seemed to fit right.
Earlier today, Mark Evans posted about Vonage, and how it's just a matter of time until they slip in second place, and cede market leadership to Time Warner - probably for good. He also refers to a very good earlier post from Om Malik, and it's worth referencing here again for those who want some richer insights based on his deconstruction of their S-1 IPO filing.
Always on top of the latest news, Mark also noted Om's posting from today with a rather troubling Vonage update. Om reports that their Chief Marketing Officer, Dean Harris recently left, but no mention of this from Vonage themselves. That has to be a concern given how vital marketing is to Vonage's gameplan. One has to wonder if this signals a change in strategy, or more cynically, if Mr. Harris has seen the writing on the wall. No doubt the Vonage watchers will be following this one closely.
Aside from this last item being newsworthy, I just wanted to comment that Mark's posting has some nice parallels to a recent posting of mine about Vonage.
What would be really interesting is if this news affects the way people are voting on Mark's poll about whether people will buy into the Vonage IPO. However, the poll isn't on the blog now. Hey Mark! Did you take it down? Please put it back up - this should be interesting!
With all this Vonage stuff, I can't help but note how bizarre it is to see a bright orange Vonage ad on Mark's blog. The Internet and the blogosphere sure work in interesting ways. Am not sure if their ad being there is a good coincidence or a bad one. It's just there, and I'll leave it at that!
Oh, there's a Part 2 to this posting...
The other happy coincidence is about my posting yesterday on wireless competition in Canada. Well, Mark also posted about this topic yesterday, and I didn't see it until after I posted. I was pleasantly surprised, actually, since the story was filed by the Globe & Mail, the main competitor to Mark's paper, the National Post. Mark doesn't often comment on Globe stories, but this time he did. I'm happy to report we're on the same page here. Must be something in the water up here.
I'll quickly close out with a short plug for VON Canada, which takes place a month from now - April 3-5, here in Toronto. Soon I'll be posting a bit more about the show, but just thought I'd mention here that you can see Mark and I on the same panel at the show. Surprise, surprise, it's a blogger panel - what a nice tie-in with this post. Joining us will be Alec Saunders, Rob Hyndman, Mathew Ingram and Mr. VON himself, Jeff Pulver. It's going to be a fun, lively session, and I sure hope you come see us!
Tuesday, February 28, 2006
Monday, February 27, 2006
Wireless Competition Review - Only in Canada
The Globe & Mail ran a piece today about this topic, where the current telecom policy review includes looking at the idea of having a fourth major operator for wireless. Only in Canada, again.
It's been widely documented - here as well - how Canada lags other advanced countries in wireless adoption. All 3 major wireless carriers recently had their Q4 2005 earnings reviews, and the strongest common theme was how there's plenty of upside for wireless growth in Canada, and they expect wireless will continue to be their driver of growth and profits.
True, we basically have an oligopoly for wireless, and it could be argued that more competition will put downward pressure on pricing, and accelerate mass adoption. However, all 3 are essentially national carriers, so consumers do not lack for choice. It's not like cable or telecom where there's basically one choice in each market. You can't get Rogers Cable in Alberta, and you can't get Telus phone service in Quebec. But you can get either of their wireless services in either province - plus Bell, of course.
The reality is that Canada is a small, widely-dispersed market. California has more population than all of Canada - how many wireless carriers do they have? And it wasn't that long ago that we had a fourth operator - Microcell. They weren't really a national provider, but certainly served as a de facto fourth major player to keep everyone else honest. Well, they actually did what I was suggesting earlier - offer lower prices.
It was a desperation move to add subscribers and shake up the market, but all it really did was get the others carriers angry with pricing that cut into their margins. This, of course, is exactly what the regulators are getting at - too much market power in too few hands is a bad thing. Microcell was acquired by Rogers, which took us down to three operators, but they weren't taken out because of their pricing strategy. It was more about consolidating the market for economies of scale, and allowing Rogers to become the #1 wireless operator.
Prior to adopting aggressive pricing, Microcell was in rough shape, and its prospects were not great. Simply put, even though a subscriber base of 1 million made them big enough to be #4, the business was just not viable at that level. I'm not alone in believing that Canada simply isn't large enough to support 4 national wireless operators. Somehow we manage to support 2 national dailies, but 4 wireless carriers is just too much.
My take is that it's really tough to leglislate competition. The investment required to build another network is prohibitive, and that's not going to happen. MVNOs - mainly Virgin Canada - are trying to build up the market, but it's been slow going so far, especially without wireless LNP. There's certainly room for MVNOs to grow, and maybe we need more entries who aren't Canadian that can stimulate the market with more colorful and creative strategies.
There are some regional wireless carriers like SaskTel Mobility, but I don't really seem them doing much to push the market. Allstream/MTS is a potential wildcard here, as they have aspiration to be a national wireline carrier, and could have put themselves on that path by acquiring Microcell (much the way Telus did by acquiring Clearnet to get into the wireless business). And finally, there are the MSOs chasing the Rogers model - Shaw, Videotron and Cogeco. They all have large regional bases of cable subscribers, and could beef up their bundles with wireless.
Many possibilities here, but it's hard to see any of them doing what the CRTC would like to see. And I really don't see any other scenarios, short of dropping foreign ownership restrictions, and letting foreign operators come in and do their thing.
That's probably not what any Canadian wants to see, especially with the Olympics just closing. A big deal was made over how the Hudsons Bay Company won the contract away from Roots to be the official outfitter of our Olympic team. Of all the homegrown businesses remaining, none is more quintessentially Canadian than HBC. We've lost pretty much all our other retailers of note due to American competition, and sadly, they have just gone down the same road. They may never have been that profitable, but HBC sure was a point of pride for Canada in the face of Walmart, Sears, etc. Well, US financier Jerry Zucker just acquired them - over the course of the Olympics - so outfitting our national team is now a bittersweet reminder of just how fragile Canada is in the shadow of the US. That's a long way of saying foreign ownership restrictions for telcos are not likely to be lifted for some time, so I don't see that happening either.
It's been widely documented - here as well - how Canada lags other advanced countries in wireless adoption. All 3 major wireless carriers recently had their Q4 2005 earnings reviews, and the strongest common theme was how there's plenty of upside for wireless growth in Canada, and they expect wireless will continue to be their driver of growth and profits.
True, we basically have an oligopoly for wireless, and it could be argued that more competition will put downward pressure on pricing, and accelerate mass adoption. However, all 3 are essentially national carriers, so consumers do not lack for choice. It's not like cable or telecom where there's basically one choice in each market. You can't get Rogers Cable in Alberta, and you can't get Telus phone service in Quebec. But you can get either of their wireless services in either province - plus Bell, of course.
The reality is that Canada is a small, widely-dispersed market. California has more population than all of Canada - how many wireless carriers do they have? And it wasn't that long ago that we had a fourth operator - Microcell. They weren't really a national provider, but certainly served as a de facto fourth major player to keep everyone else honest. Well, they actually did what I was suggesting earlier - offer lower prices.
It was a desperation move to add subscribers and shake up the market, but all it really did was get the others carriers angry with pricing that cut into their margins. This, of course, is exactly what the regulators are getting at - too much market power in too few hands is a bad thing. Microcell was acquired by Rogers, which took us down to three operators, but they weren't taken out because of their pricing strategy. It was more about consolidating the market for economies of scale, and allowing Rogers to become the #1 wireless operator.
Prior to adopting aggressive pricing, Microcell was in rough shape, and its prospects were not great. Simply put, even though a subscriber base of 1 million made them big enough to be #4, the business was just not viable at that level. I'm not alone in believing that Canada simply isn't large enough to support 4 national wireless operators. Somehow we manage to support 2 national dailies, but 4 wireless carriers is just too much.
My take is that it's really tough to leglislate competition. The investment required to build another network is prohibitive, and that's not going to happen. MVNOs - mainly Virgin Canada - are trying to build up the market, but it's been slow going so far, especially without wireless LNP. There's certainly room for MVNOs to grow, and maybe we need more entries who aren't Canadian that can stimulate the market with more colorful and creative strategies.
There are some regional wireless carriers like SaskTel Mobility, but I don't really seem them doing much to push the market. Allstream/MTS is a potential wildcard here, as they have aspiration to be a national wireline carrier, and could have put themselves on that path by acquiring Microcell (much the way Telus did by acquiring Clearnet to get into the wireless business). And finally, there are the MSOs chasing the Rogers model - Shaw, Videotron and Cogeco. They all have large regional bases of cable subscribers, and could beef up their bundles with wireless.
Many possibilities here, but it's hard to see any of them doing what the CRTC would like to see. And I really don't see any other scenarios, short of dropping foreign ownership restrictions, and letting foreign operators come in and do their thing.
That's probably not what any Canadian wants to see, especially with the Olympics just closing. A big deal was made over how the Hudsons Bay Company won the contract away from Roots to be the official outfitter of our Olympic team. Of all the homegrown businesses remaining, none is more quintessentially Canadian than HBC. We've lost pretty much all our other retailers of note due to American competition, and sadly, they have just gone down the same road. They may never have been that profitable, but HBC sure was a point of pride for Canada in the face of Walmart, Sears, etc. Well, US financier Jerry Zucker just acquired them - over the course of the Olympics - so outfitting our national team is now a bittersweet reminder of just how fragile Canada is in the shadow of the US. That's a long way of saying foreign ownership restrictions for telcos are not likely to be lifted for some time, so I don't see that happening either.
Friday, February 24, 2006
Spring Training - Red Sox Hiber-Nation Over
Yesterday marked the start of Spring Training, and the official beginning of anxiety and fragile promises for the Nation. I just wanted to note the occasion, and say that it will soon be time to wear this hat and share my occasional thoughts on our prospects in the Johnny-Go-Home era.
Here are some fun photos of Day 1, courtesy of Boston.com.
What every kid dreams of.... but those clouds in the sky - looks ominous. I'm worried ALREADY!
The Fab Four - with David Wells conspicuously absent - gosh, can these guys really carry us to the promised land? Ya gotta believe...
Another question mark. Geez, pitching coach Al Nipper is so thrilled to see Foulkie at camp, he applauds even when he's throwing a water bottle! Hands together now, let's all pray he's still got it....
Literally, and figuratively, Papi carries this team on his back, Manny included. In Ortiz we trust!
You don't think the fans are happy he's back???? Go Theo!
Nobody looks happier having Theo back than Tito! Gee, he looks a little too happy for my liking - but they do make a nice couple...
Here are some fun photos of Day 1, courtesy of Boston.com.
What every kid dreams of.... but those clouds in the sky - looks ominous. I'm worried ALREADY!
The Fab Four - with David Wells conspicuously absent - gosh, can these guys really carry us to the promised land? Ya gotta believe...
Another question mark. Geez, pitching coach Al Nipper is so thrilled to see Foulkie at camp, he applauds even when he's throwing a water bottle! Hands together now, let's all pray he's still got it....
Literally, and figuratively, Papi carries this team on his back, Manny included. In Ortiz we trust!
You don't think the fans are happy he's back???? Go Theo!
Nobody looks happier having Theo back than Tito! Gee, he looks a little too happy for my liking - but they do make a nice couple...
Henry Blodget on Google - Really!
That got your attention, didn't it? Well, it's true - he's B - A - C - K - but he's NOT making recommendations. There are rules to follow of course, for both the good guys and the bad guys.
So, long time IP colleague/hedge fund manager/cool urbanite/Gibson-playing guy Cody Willard, sent me this earlier in the week.
Last week, the Financial Times published a roundtable discussion about Google. Titled "Where is Google Going?", it featured Cody, Henry Blodget, investment advisor Jeff Matthews, and FT columnist Stephen Schurr.
It's a good read, and Cody certainly holds his own. He's been holding Google from Day 1, and remains bullish. He feels they're well positioned to compete with all IM-based comers, and if they hold their ground, there's a lot of upside to come.
The overall view is that Microsoft is a bit late to the game, and they need to work hard to protect their franchise, as their competitors have stronger search products, as well as content to generate revenues.
And let's not forget about all the dark fiber Google has, as well as their WiFi initiatives, esp the latest with Earthlink.
That said, the panel does point out the risks of depending too much on their advertising model for revenues. As this space becomes more competitive it's difficult to see how Google can sustain its growth to keep earnings strong. Mobile search is really virgin territory, but it's huge - so that could be the engine to keep the growth coming, but it's too early to tell if consumers will really get into searches on tiny handheld screens.
Henry Blodget doesn't say very much, but his comments are insightful, and if taken at face value, you'd want to hear more from him. For those who wish to do so, check out his blog here.
So, long time IP colleague/hedge fund manager/cool urbanite/Gibson-playing guy Cody Willard, sent me this earlier in the week.
Last week, the Financial Times published a roundtable discussion about Google. Titled "Where is Google Going?", it featured Cody, Henry Blodget, investment advisor Jeff Matthews, and FT columnist Stephen Schurr.
It's a good read, and Cody certainly holds his own. He's been holding Google from Day 1, and remains bullish. He feels they're well positioned to compete with all IM-based comers, and if they hold their ground, there's a lot of upside to come.
The overall view is that Microsoft is a bit late to the game, and they need to work hard to protect their franchise, as their competitors have stronger search products, as well as content to generate revenues.
And let's not forget about all the dark fiber Google has, as well as their WiFi initiatives, esp the latest with Earthlink.
That said, the panel does point out the risks of depending too much on their advertising model for revenues. As this space becomes more competitive it's difficult to see how Google can sustain its growth to keep earnings strong. Mobile search is really virgin territory, but it's huge - so that could be the engine to keep the growth coming, but it's too early to tell if consumers will really get into searches on tiny handheld screens.
Henry Blodget doesn't say very much, but his comments are insightful, and if taken at face value, you'd want to hear more from him. For those who wish to do so, check out his blog here.
Thursday, February 23, 2006
Web 2.0 Conference in Toronto
Just wanted to share this for those who care to make Toronto their destination for Web 2.0 thought leadership. There's a cool, grass roots thing happening here in May - details to follow.
Fellow local IP blogger Rob Hyndman has a nice post about it, and I'll provide updates when there's news. Rob is one of people driving this, along with others including bloggers Mark Evans, Mathew Ingram, and Michael McDermont (his company is doing my soon-to-be-launched website).
Based on the number of comments left on Rob's post, as well as Mark's the other day, I'd say interest is pretty strong. Should be an exciting event, and I'd urge anyone in town interested in Web 2.0 to attend.
Fellow local IP blogger Rob Hyndman has a nice post about it, and I'll provide updates when there's news. Rob is one of people driving this, along with others including bloggers Mark Evans, Mathew Ingram, and Michael McDermont (his company is doing my soon-to-be-launched website).
Based on the number of comments left on Rob's post, as well as Mark's the other day, I'd say interest is pretty strong. Should be an exciting event, and I'd urge anyone in town interested in Web 2.0 to attend.
Canadian IP Thought Leaders Podcast - Dave McCarthy, BCE Capital
This week's segment on the Pulvermedia Podcasting Network (PPN) featured Dave McCarthy, who's based in the Ottawa office of BCE Capital. Dave's been backing companies for a long time, and knows what works for tech startups. Some of the notable IP companies in their portfolio include NexTone, Bridgeport Networks, and Sylantro.
We talked about investing landscape for Canadian startups, and Dave noted that we have some market leadership in areas like video and wireless. You can download the podcast here, and read more about Dave's background. Dave will be attending Spring VON, and is a speaker on the VC panel at VON Canada in April.
We talked about investing landscape for Canadian startups, and Dave noted that we have some market leadership in areas like video and wireless. You can download the podcast here, and read more about Dave's background. Dave will be attending Spring VON, and is a speaker on the VC panel at VON Canada in April.
Wednesday, February 22, 2006
VoIP Media Coverage of Note
It's been a busy week following 3GSM, today's IMS Forum launch, and major players like Microsoft, Google and RIM being in the news. I get my share of calls from the press, and wanted to note two stories that ran today where I was cited.
First is Paul Taylor's piece in the Financial Times, where the title says it all: "Can there be any future for traditional telephony?"
The link may not provide full text access, but I'm glad to forward a Word version - just let me know! The focus is mainly on enterprise IP - no big revelations, but a nice validation of the dominant trends to bring home the message of IP's ascendancy to mainstream investors.
Second article ran in two markets - Datamonitor ComputerWire in the US, and Computer Business Review in the UK. This was a more news-based article about Microsoft's announcement to support mobililty on its Office Communicator.
It's ominous sounding news, but I don't see it giving Microsoft a lock on this market by any means. I think it just validates the importance of mobility for enterprise communications, and that there's a fundamental shift happening away from desk phones to the PC, and on top of that, a shift from the PC to mobile endpoints. Clearly, MS can't afford to risk a migration from the desktop, so it's easy to see why is a must for them to do.
Again, if the link doesn't give you the text, I can get you a soft copy.
First is Paul Taylor's piece in the Financial Times, where the title says it all: "Can there be any future for traditional telephony?"
The link may not provide full text access, but I'm glad to forward a Word version - just let me know! The focus is mainly on enterprise IP - no big revelations, but a nice validation of the dominant trends to bring home the message of IP's ascendancy to mainstream investors.
Second article ran in two markets - Datamonitor ComputerWire in the US, and Computer Business Review in the UK. This was a more news-based article about Microsoft's announcement to support mobililty on its Office Communicator.
It's ominous sounding news, but I don't see it giving Microsoft a lock on this market by any means. I think it just validates the importance of mobility for enterprise communications, and that there's a fundamental shift happening away from desk phones to the PC, and on top of that, a shift from the PC to mobile endpoints. Clearly, MS can't afford to risk a migration from the desktop, so it's easy to see why is a must for them to do.
Again, if the link doesn't give you the text, I can get you a soft copy.
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