Considering I just saw Ron Close of Bell speak yesterday, today's news about Inukshuk is sure to keep Bell in the public eye, at least until Monday, when I get to see Ron speak again at VON Canada.
Inukshuk - try saying that 3 times fast - is a classic example of something that started out as a great and noble idea, but has turned out to be something else. In my mind, today's announcement raises more questions than answers.
First, what's an Inukshuk? Never thought you'd ask! Let's start there - at the beginning. Most Canadians know the answer - my neighbor has a few in his back yard. The description on the Inukshuk web page says it well...
"Inukshuk is a beacon. For travellers in Canada's North, an Inukshuk is a welcome sight. It says, 'I've been here before; you're on the right path'. In the same way, Inukshuk will be a welcome guide to travellers on the Internet."
An Inukshuk is a marker, used by Eskimoes in the far north - a structure built from flat stones - sturdy, friendly - tells you you're on the right path and you're not so alone. That's exactly what they had in mind intially. The intent of Inukshuk was to bring broadband to remote communities that can't be well served by existing technologies - mainly satellite, which is quite expensive. This was in support of an underlying government wish to have ubiquitous broadband, and to use Internet technology to help improve the quality of life for Canadians living in these remote communities. Broadband would allow this segment of the population to have better access to information, government services, health care, distance learning, etc. All very noble causes, no doubt.
The reality has become quite different. Initially Inukshuk was the ticket for Microcell to enter the market and become Canada's 4th wireless carrier. They have since been folded into Rogers, but that's another story. Somewhere along the line, Rogers and Bell took control of Inukshuk, and jointly agreed to invest $200 million to build a national wireless broadband network.
That brings us to today's much-anticipated news. While the technology sounds great - EVDO for Canada - the plans announced by both Rogers and Bell sound more focused on serving urban markets than the rural hinterlands Inukshuk was intended for. Both Mark Evans and Mark Goldberg posted earlier today about this, and Catherine McLean wrote an online piece for today's Globe & Mail - which I'm cited in.
Taking all this in, the news raises many worrisome questions about what the intentions really are for this offering, and what the implications are for other carriers...
- Most of the announced coverage is in urban markets - Whitehorse is mentioned - that's definitely not urban, but they didn't miss any of Candada's major urban centers. These centers have lots of broadband and lots of wireless already, so why do we need this?
- How is it that 2 carriers - Rogers and Bell - get to build this network and offer it nationally? If we look at the urban markets, this all of a sudden gives them a big window to compete out west against Telus and Shaw. How fair is that? I can't imagine Telus or Shaw are happy about this. They can't do the same in Eastern Canada. It will sure be interesting to see how this plays out in Western Canada. Sure, at face value this is all about allowing entry into new markets for growth and to increase competition. But how can you allow this for one set of carriers, but not the others?
- At one point, Allstream/MTS was a driver for Inukshuk. They haven't been for some time, and in hindsight you've really got to look at this as a missed opportunity for them. Short of getting rescued by an infusion of foreign investment (which may not ever happen), Allstream/MTS has limited options for long term growth. They strike me as the Qwest of Canada, kind of being the odd man out when the music stops.
- Let's be good guys now, and focus on the what Inukshuk is supposed to do - help out rural/remote communities. Bell recently announced they were going to convert their non-urban territories into an income trust - nothing wrong with that. More recently, they've somehow managed to bring Aliant back into the fold, and add all of their subscribers (except Halifax - the most urban part of the Maritimes) to the mix, creating a giant income trust. Where am I going with this? Well, Inukshuk seems to be a shrewd ploy by Bell in the sense that they now have this giant non-urban customer base to service. They can wear the good-guy hat and point to Inukshuk as the vehicle by which they'll be able to economically deliver broadband to a wider swath of this market - which is true. This is good news for income trust investors as this increases the potential for Bell to generate more revenues from this market, and sell more IP-based services, which yield high margins.
- Where is the CRTC in all this? How have they allowed this to happen? My take is this - the just-issued Telecom Review Panel report is advocating a laissez faire approach, which plays beautifully into what Inukshuk looks like to me. Knowing this is where the current regulatory sentiment lies, I'm guessing that Bell and Rogers figure they can push the envelope with Inukshuk, and gamble they won't get much push-back. Stay tuned on that one.
- Toronto is the most urban market in Canada, and is the most important market for both Bell and Rogers. Needless to say, neither is happy about the recent news that Toronto Hydro is about to launch muni WiFi here, and make it free for the first 6 months. Hello, competition! In its current state, Inukshuk allows both Rogers and Bell to get in the game quickly and compete with Toronto Hydro - or more directly, to quash them before they really disrupt the kingdom. It's going to be an interesting summer here, that's for sure.
- Let's not leave RIM out of this while we're speculating. I don't know what the experience has been in the US with EVDO, but could Inukshuk be a Blackberry killer? Really, what's to stop Bell and Rogers from going after the mobile email market? Sure, the bandwidth they're offering is built for Internet, video, multimedia, etc. - that's where the money is. But why not go for email?
All told, the way it looks to me, I don't see most consumers coming out the winner in this one. It just seems to be too much power concentrated in the hands of those who are already the biggest fish in the pond. Sure, it will spark a lot of short-term competition among the majors, but I think it becomes even harder now for new competitors to enter. Just when it looked like the Telecom Review Panel had us set on the right course, we now have to sort out what Inukshuk is really all about. I'm not so sure now myself.
Friday, March 31, 2006
Ron Close - Bell Canada's Got Big Plans
Yesterday, I attended a forum put on by Deloitte here in Toronto, where the focus was on trends in communications convergence. It's part of their on going Predictions Series, where they look at various issues in the telecom/media markets. I attended one of these earlier this year where Jim Balsillie of RIM gave a great presentation.
Catherine Mclean had some nice coverage of Ron Close's presentation in today's Globe & Mail. Ron is the President of New Ventures at Bell, and he'll be speaking next week at VON Canada. As Catherine notes, Bell keeps looking for the next big thing, and it appears that will be wireless Internet access, news of which is just days away. Bell and Rogers are in a partnership called Inukshuk, where they are jointly developing a national wireless broadband access network, and will then each try to market it to their customers. If you can ever imagine Verizon and Time Warner teaming up to do this, that's what you have going here in Canada.
Ron had little to say about VoIP, actually. As much we think about it all the time, initiatives in areas like wireless and IPTV are higher priorities, and hold out better returns in terms of revenues and margins. VoIP is a big part of their bundling plans, but as a standalone offering, I don't see it being much of a focus right now.
Aside from Ron, there were two other speakers, both very good. Preceding Ron was Michael Raynor from Deloitte Research. He gave a terrific overview of the challenges all companies have in developing strategies around convergence. Bottom line is there is no magic bullet for this - he cited some examples of Sony products that had great strategies but were market flops - such as the minidisc. Even with the best execution and technology, unforeseen events happen that totally change the equation.
That's just the nature of the tech sector - it's always changing - and maybe there isn't a perfect strategy. However, as Ron pointed out, you still have to place a bet on something, somewhere, especially if you're a public company. You can't be too risky and you can't be too conservative, and that explains why the major carriers have been so slow coming to market with VoIP. Food for thought - really enjoyed it.
Following Ron was Wayne Purboo, CEO of Toronto-based QuickPlay Media. I blogged about them recently, and really like what they're doing. Wayne told me they are close to getting funding, and I'm planning on having a visit with them after VON Canada. Stay tuned.
Catherine Mclean had some nice coverage of Ron Close's presentation in today's Globe & Mail. Ron is the President of New Ventures at Bell, and he'll be speaking next week at VON Canada. As Catherine notes, Bell keeps looking for the next big thing, and it appears that will be wireless Internet access, news of which is just days away. Bell and Rogers are in a partnership called Inukshuk, where they are jointly developing a national wireless broadband access network, and will then each try to market it to their customers. If you can ever imagine Verizon and Time Warner teaming up to do this, that's what you have going here in Canada.
Ron had little to say about VoIP, actually. As much we think about it all the time, initiatives in areas like wireless and IPTV are higher priorities, and hold out better returns in terms of revenues and margins. VoIP is a big part of their bundling plans, but as a standalone offering, I don't see it being much of a focus right now.
Aside from Ron, there were two other speakers, both very good. Preceding Ron was Michael Raynor from Deloitte Research. He gave a terrific overview of the challenges all companies have in developing strategies around convergence. Bottom line is there is no magic bullet for this - he cited some examples of Sony products that had great strategies but were market flops - such as the minidisc. Even with the best execution and technology, unforeseen events happen that totally change the equation.
That's just the nature of the tech sector - it's always changing - and maybe there isn't a perfect strategy. However, as Ron pointed out, you still have to place a bet on something, somewhere, especially if you're a public company. You can't be too risky and you can't be too conservative, and that explains why the major carriers have been so slow coming to market with VoIP. Food for thought - really enjoyed it.
Following Ron was Wayne Purboo, CEO of Toronto-based QuickPlay Media. I blogged about them recently, and really like what they're doing. Wayne told me they are close to getting funding, and I'm planning on having a visit with them after VON Canada. Stay tuned.
Spring Training Over - Busy at Conferences
Well, spring training wraps up now, and MLB gets started again next week. Am I worried that the Red Sox had a terrible spring training record? They hardly played their regulars, so it's not too concerning. Am wondering if the world champ White Sox are worried - their team was just about the worst of anyone in spring training. Go figure. Am not going to make any predictions now, but I'm confident my Red Sox have as good a chance as any team to make it to the World Series this year.
As March fades to April, and the weather starts feeling spring-like all of a sudden, I just thought I'd list out the upcoming IP/telecom events I'll be attending/speaking at over the next few months. For a change, most of these shows are in my back yard, so I don't have too much travel for a while...
April 3-5 - VON Canada - Toronto
April 6-7 - Canadian Telecommunications Consultants Association, Spring 2006 conference - Toronto
May 9-10 - Implementing VoIP, Federated Press - Toronto
May 15-16 - Mesh - Web 2.0 Conference - Toronto
June 4-8 - Globalcomm - Chicago
As March fades to April, and the weather starts feeling spring-like all of a sudden, I just thought I'd list out the upcoming IP/telecom events I'll be attending/speaking at over the next few months. For a change, most of these shows are in my back yard, so I don't have too much travel for a while...
April 3-5 - VON Canada - Toronto
April 6-7 - Canadian Telecommunications Consultants Association, Spring 2006 conference - Toronto
May 9-10 - Implementing VoIP, Federated Press - Toronto
May 15-16 - Mesh - Web 2.0 Conference - Toronto
June 4-8 - Globalcomm - Chicago
Thursday, March 30, 2006
Skype Allegations - Ripple Effects
This isn't breaking news, but I feel compelled to share it anyway. My PC was out with a virus for a couple of days, am I'm behind on everything, including blogging. That said...
The blogging community knows full well that Andy Abramson was first to market with this story last weekend. On Tuesday, James Enck noted that ZD NET UK was the first major news pub to "break" the story WITHOUT properly citing/crediting Andy as the source - which we all know to be true. You knew it would happen sooner or later. I empathize with blogger Russell Shaw, who writes for Ziff Davis, but would not have done such a thing.
The Skype story itself may be time sensitive, but the above issue is not, and maybe it will go down in the Web 2.0 annals as the "Abramson Precedent". I've always had mixed feelings about journalists who blog, and this scenario with ZD NET has crossed a line. In the blogger world, most of us know the credibility behind most other bloggers. It's a given that we would only post items of substance, or least will cite our sources.
However, ZD NET did not extend the courtesy and tenents of professional journalism to Andy in this case, as if a blog is not deemed to be a credible source. To me, that's crossing the line. It doesn't take much to ascertain that Andy's credentials are A-1, and he should have been accorded credit, without question. This is certainly not the first time that a quality story has come from the blogosphere, and it sure won't be the last. Blogs, of course, and gaining lots of credence in the publishing world due to their immediacy and the closeness of many bloggers to the best sources.
I'd like to think this won't happen again, but if/when it does, bloggers need to stake their claim, and keep making noise. Traditional journalists need to know these things get noticed, and we have our code of behavior as well. We know who the sources are in cases like these, and that's an easy story to tell if need be.
The blogs have been quiet about the Skype story the past day or so, but I just wanted to add a post from Monday that I haven't seen referenced yet. It's from "Mr Wave Theory", and he's got some very interesting thoughts about what's behind the Skype allegations. I didn't know "Mr. Wave" until now, so I can't really comment on the strength of his views.
The blogging community knows full well that Andy Abramson was first to market with this story last weekend. On Tuesday, James Enck noted that ZD NET UK was the first major news pub to "break" the story WITHOUT properly citing/crediting Andy as the source - which we all know to be true. You knew it would happen sooner or later. I empathize with blogger Russell Shaw, who writes for Ziff Davis, but would not have done such a thing.
The Skype story itself may be time sensitive, but the above issue is not, and maybe it will go down in the Web 2.0 annals as the "Abramson Precedent". I've always had mixed feelings about journalists who blog, and this scenario with ZD NET has crossed a line. In the blogger world, most of us know the credibility behind most other bloggers. It's a given that we would only post items of substance, or least will cite our sources.
However, ZD NET did not extend the courtesy and tenents of professional journalism to Andy in this case, as if a blog is not deemed to be a credible source. To me, that's crossing the line. It doesn't take much to ascertain that Andy's credentials are A-1, and he should have been accorded credit, without question. This is certainly not the first time that a quality story has come from the blogosphere, and it sure won't be the last. Blogs, of course, and gaining lots of credence in the publishing world due to their immediacy and the closeness of many bloggers to the best sources.
I'd like to think this won't happen again, but if/when it does, bloggers need to stake their claim, and keep making noise. Traditional journalists need to know these things get noticed, and we have our code of behavior as well. We know who the sources are in cases like these, and that's an easy story to tell if need be.
The blogs have been quiet about the Skype story the past day or so, but I just wanted to add a post from Monday that I haven't seen referenced yet. It's from "Mr Wave Theory", and he's got some very interesting thoughts about what's behind the Skype allegations. I didn't know "Mr. Wave" until now, so I can't really comment on the strength of his views.
Wednesday, March 29, 2006
Canadian IP Thought Leaders Podcast - David Mandelstam on Open Source
This week's podcast was with David Mandelstam, President/CEO of Sangoma Technologies. Toronto doesn't have that many IP vendors, and Sangoma hasn't traditionally been in that space, but they are now, especially in open source.
They're a very interesting company - and public to boot - with a lot of historical perspective. So, I wanted to have David come on to talk about what he's seeing in open source and how that market is evolving in the voice arena. David also provided his views on being a Canadian vendor, and the realities of embracing open source for their company.
You can read more about David and listen to the podcast here. Next week, David will be speaking on two panels at VON Canada, so if you're attending, you'll have a chance to meet him there.
They're a very interesting company - and public to boot - with a lot of historical perspective. So, I wanted to have David come on to talk about what he's seeing in open source and how that market is evolving in the voice arena. David also provided his views on being a Canadian vendor, and the realities of embracing open source for their company.
You can read more about David and listen to the podcast here. Next week, David will be speaking on two panels at VON Canada, so if you're attending, you'll have a chance to meet him there.
Monday, March 27, 2006
VON Canada - Just a Week Away
Just as the Spring VON buzz has finally subsided, it's time for another VON! For once, I don't have to travel - VON Canada is right here in Toronto.
The show runs Monday - Wednesday, April 3 - 5, and looks to build on the momentum from Spring VON, but with a local flavor. I'll be moderating and speaking on a few of the sessions, so I won't be hard to find.
One interesting twist to the show involves the Asterisk community. Open source has been on the VON agenda for some time, and at VON Canada, the Toronto Asterisk User Group (TAUG) will be holding their monthly meeting at the show venue. The agenda for the meeting is still evolving, but it's open to anyone attending the show. So if you're interested in open source, this will be a great way to connect with the community. I recently learned that TAUG is the largest AUG in the world, so I suspect there will be a healthy turnout. Hope to see you there!
The show runs Monday - Wednesday, April 3 - 5, and looks to build on the momentum from Spring VON, but with a local flavor. I'll be moderating and speaking on a few of the sessions, so I won't be hard to find.
One interesting twist to the show involves the Asterisk community. Open source has been on the VON agenda for some time, and at VON Canada, the Toronto Asterisk User Group (TAUG) will be holding their monthly meeting at the show venue. The agenda for the meeting is still evolving, but it's open to anyone attending the show. So if you're interested in open source, this will be a great way to connect with the community. I recently learned that TAUG is the largest AUG in the world, so I suspect there will be a healthy turnout. Hope to see you there!
What the ILECs Can Learn From Canada and Coffee
The other day I noted that Mark Goldberg has recently started blogging, and wanted to welcome him to the fold. He's well versed in the Canadian telecom sector, and had a terrific post on Friday that I wanted to amplify on.
I think you have to be Canadian to fully appreciate this, but for those of you in Verizon-land, just substitute Dunkin Donuts for Tim Hortons, and you'll get the picture.
Last week, the biggest financial story in Canada was the the Tim Hortons IPO. We don't have many homegrown retail brands left up here anymore - that's another (sad) story unto itself - and even fewer that the public can actually invest in. Everybody wants to own their stock - just like their coffee, people can't get enough of them. This business really is a gold mine. I was thinking about Mark's post on Saturday, as I was sitting in our local Tim Hortons with one of my sons having our weekly coffee/tea time. There is ALWAYS a lineup - doesn't matter what time of day - people just keep on coming. It's the same just about anywhere you go across Canada. Doesn't matter how many Starbucks are nearby, they just keep coming - eh! That said, Starbucks is a different animal, and their devotees would rarely go downmarket to Tims - or at least admit to doing so!
This is a roudabout way of getting to Mark's post. His main insight is that Tim Hortons has managed to become very successful and well differentiated in what is essentially a commodity business. Everybody drinks coffee, and people have many choices about where to go, but Tim Hortons sure gets it share. Of course, the secret is that Canadians are addicted to donuts, and that's probably the biggest reason they go to Tims. The coffee actually isn't that good, and 18% cream is just too rich for me - but that's the secret sauce to making it taste so good. Regardless, they are a well oiled machine, and you can't beat their prices.
So, I'm with Mark in saying that telcos could learn a few things from Tim Hortons, as the voice business these days isn't really that different from the coffee business. It IS possible to differentiate yourself, and as we've learned from Skype, keep the price low, make the user experience enjoyable, and keep the product simple and easy to use. Perhaps most importantly, stay close to the customer, and keep bringing out new products that tap into what people want. And if the telcos don't listen, just don't be surprised to see Tims come out with their own calling cards some day! If that's what the customer wants....
I think you have to be Canadian to fully appreciate this, but for those of you in Verizon-land, just substitute Dunkin Donuts for Tim Hortons, and you'll get the picture.
Last week, the biggest financial story in Canada was the the Tim Hortons IPO. We don't have many homegrown retail brands left up here anymore - that's another (sad) story unto itself - and even fewer that the public can actually invest in. Everybody wants to own their stock - just like their coffee, people can't get enough of them. This business really is a gold mine. I was thinking about Mark's post on Saturday, as I was sitting in our local Tim Hortons with one of my sons having our weekly coffee/tea time. There is ALWAYS a lineup - doesn't matter what time of day - people just keep on coming. It's the same just about anywhere you go across Canada. Doesn't matter how many Starbucks are nearby, they just keep coming - eh! That said, Starbucks is a different animal, and their devotees would rarely go downmarket to Tims - or at least admit to doing so!
This is a roudabout way of getting to Mark's post. His main insight is that Tim Hortons has managed to become very successful and well differentiated in what is essentially a commodity business. Everybody drinks coffee, and people have many choices about where to go, but Tim Hortons sure gets it share. Of course, the secret is that Canadians are addicted to donuts, and that's probably the biggest reason they go to Tims. The coffee actually isn't that good, and 18% cream is just too rich for me - but that's the secret sauce to making it taste so good. Regardless, they are a well oiled machine, and you can't beat their prices.
So, I'm with Mark in saying that telcos could learn a few things from Tim Hortons, as the voice business these days isn't really that different from the coffee business. It IS possible to differentiate yourself, and as we've learned from Skype, keep the price low, make the user experience enjoyable, and keep the product simple and easy to use. Perhaps most importantly, stay close to the customer, and keep bringing out new products that tap into what people want. And if the telcos don't listen, just don't be surprised to see Tims come out with their own calling cards some day! If that's what the customer wants....
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