July 2005 Archives

I came across an entry from Russell Shaw today listing the Top 10 VoIP Providers by subscription count. The Top 10 is based on research provided by Point Topic.

1. Skype - 5,300,000

2. Yahoo! Japan - 4,517,000

3. VoiceGlo - 605,000

4. Free (France) - 600,000

5. Vonage - 535,000.

6. FastWeb (Italy) - 528,000

7. Cox - 413,000

8. Time Warner - 372,000

9. Cablevision - 364,000

10. Neuf (France) - 297,000

According to Point Topic, there were over 11 million people using retail VoIP service for at least some of their telephone calls at the end of March 2005. That’s an increase from just over 5 million at mid-2004 according to Point Topic research published in December 2004.

This number is based on a total of publicly available figures for VoIP subscribers, combined with estimates where subscriber numbers were not available. Many of these estimates are based on a conservative 10 percent growth from Q4 2004 to Q1 2005. The total does not include PC-based ‘soft-client’ services like Skype and VoiceGlo.

The release goes on to say that more than half of that number is in Japan. Yahoo! Softbank provides the majority of the services to the 7.2 million Japanese VoIP subscribers.

After Japan, the American cable sector is numerically the most important VoIP sector, with around 2.1 million subscribers.

France is the largest market for VoIP in Europe, with 1.2 million subscribers by the end of the first quarter. Most of these lines are provisioned by Free and Neuf.

For more information, and for a complete breakdown of VoIP subscribers by geography, check out Point Topic’s report, Retail VoIP More Than Doubles in 9 Months.

Vonage announced an agreement with Brightpoint today, whereby the latter's Brightpoint Activation Services LLC will become a Master Agent, offering its customers the opportunity to resell Vonage service plans and devices and also to activate new customer accounts.

Vonage continues to expand its distribution channel. Pretty soon, one might be able to drive up to a gas station and receive offers for free Vonage calling with every fill-up.  I don't think next-generation telecom services can ever replace promotional glasses as a primo giveaway, but heck... I'm always the last one to hop on a trend.

The release follows:

Brightpoint and Vonage(R) Enter Into National Master Agent Agreement

PLAINFIELD, Ind .--July 14, 2005-- Brightpoint, Inc., today announced that its subsidiary, Brightpoint Activation Services LLC ("Brightpoint") has been appointed Master Agent by Vonage Marketing, a subsidiary of Vonage Holding Corp.

Brightpoint, through its Accesspoint Dealer Network program, will offer its current and future dealers the opportunity to become Authorized Vonage Agents. Its dealers will be able to offer Vonage broadband telephony service plans, approved devices and activate new customer accounts.

Accesspoint is Brightpoint's value-enhancing master agent program that supports qualified dealers with a comprehensive group of services. This program, which currently serves more than 1,800 dealers nationwide, creates opportunities for independent dealers, agents and specialty retailers to offer wireless products and service activations, and earn highly competitive commissions. More information is available at www.access-point.com.

Merrill Lynch released a report today entitled, Telecommunications: US Telecom 2Q05 Preview.

 Among the findings released today, Merrill Lynch offers a series of expectations for the second quarter. Quoting directly from the report:

• The seasonal trends in telecom for the second quarter period favor wireless over wireline, even more so than for other periods, due in part to demographic drivers. We expect this to be the case in 2Q 05.
• We think that Verizon Wireless will gain share during 2Q 05, in another solid quarter of wireless results. We visited over 80 stores in four US markets in May and June. We believe that second quarter wireless highlights will include: (1) Verizon Wireless taking share, (2) Cingular slowing, but still solid, and (3) the remaining three national operators tracking steadily. We are looking for wireless margin expansion in 2Q 05, after somewhat of a disappointing first quarter in this regard.
• We estimate that 2Q 05 will be seasonally weak for access line losses and DSL additions. We believe that substitution by wireless and demographic trends will continue to drive line losses. Cable (VoIP) telephony appears to be taking between 1% and 2% share per quarter where available, depending on price. However, most cable operators have held pricing firm to date.
• Based on Merrill Lynch telco and cable estimates, we believe that DSL flowshare will remain above 50% for the telcos, due to continued aggressive pricing and an effort to hold share.

I can just hear the old-style ticker in the background (deet deeet deetde deet...) this just in...!

Crown Castle International Corp. has made an additional investment of $55 million in FiberTower Corporation, a privately-held provider of backhaul services.

FiberTower was a recent recipient of TMC Labs’ 2005 Innovation Award. You can see the full write-up in the July issue of Internet Telephony magazine.

According to John P. Kelly, President and Chief Executive Officer of Crown Castle, “…our additional investment in FiberTower, as part of a successful $150 million equity offering by FiberTower reflects our belief that there will be a significant demand for the backhaul solutions FiberTower provides to wireless carriers as the demand for additional wireless minutes of use increases. We remain focused on investing in opportunities that we believe will maximize long-term recurring cash flow per share and expanding the revenue sources on our towers."

FiberTower designs, deploys and operates radio-based backhaul networks for major wireless carriers. Commensurate with Crown Castle's investment, FiberTower has raised a total of $150 million through an equity offering, with investments from Oak Investment Partners and Affiliates, Tudor Investment Corp. and Affiliates, Goldman, Sachs & Co. and Meritech Capital Partners and Affiliates. In addition, Crown Castle signed an agreement with FiberTower to have leased space on at least 400 Crown Castle towers at the end of two years.

I understand that $150 million makes this the second highest investment announcement in our industry – second only to the $200 million raised by Vonage and announced this past May. 

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Interesting. I just mentioned Madison River in an article I wrote this morning. Apparently their check to the FCC cleared, and S&P likes it! Actually I don’t know about that, but the ratings service did just raise Madison River’s credit rating. In any event, the release follows:

Madison River Telephone Co. LLC Bank Loan Rated 'B+'; Corporate Credit Rating Raised To 'B+'

NEW YORK (Standard & Poor's) July 14, 2005--Standard & Poor's Ratings Services said today that it raised its corporate credit rating on Mebane, N.C.-based Madison River Telephone Co. LLC (Madison River) to 'B+' from 'B'. All other ratings for Madison and its related entities, Madison River Capital LLC and Madison River Finance Corp., also were raised. At the same time, we assigned a 'B+' rating to Madison River Capital LLC's $525 million of secured bank facilities, including a $75 million revolving credit and a $450 million term loan B. A '4' recovery rating was also assigned to these bank loans, indicating prospects for recovery of 25% to 50% of principal in a payment default. The bank loan rating is based on preliminary information, subject to receipt of final bank loan documents.

The outlook is stable. Madison River is a rural local exchange carrier (RLEC) with a very modest sized competitor local exchange carrier (CLEC) business.

Proceeds of the new bank facilities will be used primarily to repay debt.

Ratings for holding company Madison River Communications Corp. have been withdrawn. This entity was formed for the planned initial public equity offering which this bank financing is currently replacing. Pro forma for the refinancing, Madison River will have about $594 million of total debt and preferred stock outstanding as of June 30, 2005.

"The upgrade is based on the company's good operating performance in the last year, especially its success in marketing DSL and limiting access line losses, despite an increasingly competitive business environment," said Standard & Poor's credit analyst Catherine Cosentino. The company's nearly ubiquitous DSL footprint has helped it achieve a residential DSL penetration of primary residential access lines well above its peers, at 34% as of March 31, 2005.

The company's access-line losses totaled 2.5% for 2004, and 3.3% on a year-over-year basis as of March 31, 2005. While these levels are only average for the rural local exchange carrier industry, they include a significant amount of losses because of damage from a hurricane in late 2004, much of which are expected to eventually return to service. Excluding hurricane related losses, the year over year access line decline was a modest 1.7% as of March 31, 2005.

These characteristics provide a degree of revenue and EBITDA stability.

Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search.

And now back to our regularly scheduled programming.

Seems that VoIP is scaring the scheize out of some folks. According to a published report this morning, Vodafone’s German unit has made plans to disable calls from VoIP operators such as Skype and others beginning in July 2007.

The article quotes Vodafone Germany spokesman Heiko Witzke, who said that in the interim the company may yet reverse its policy. Witzke wouldn't comment about why the company was taking the step, but said that "2007 is a long ways to go; anything may happen until then."

Hmm… Established, legacy carriers, fearful of losing market share to VoIP… That can’t happen here, right? Well we all remember the situation early last spring with Madison River Communications, and how the FCC slapped them with a fine – no time wasted, no questions asked – for blocking Vonage VoIP ports. It seemed at the time that we had little to worry about from network providers blocking the use of our chosen VoIP providers.

Alas, the recent Brand X decision by the US Supreme Court appears to throw the door wide open to port blocking on a large scale. While Tom Keating disagrees, saying how it’s not in the best interest of the individual network providers to block others’ VoIP ports, it’s still entirely within the realm of possibility. And leaving it on the shoulders of the providers to “do the right thing” has never been something I put too much stock in.

Was it over when the Germans bombed Pearl Harbor? Of course not.

But is it fair to say it’s starting when the Germans block VoIP? Stay tuned. I’m sure this story has a long way to go.

The question is no longer “When” but “How.”

How will service providers comply with the recent FCC order mandating that all VoIP service providers must provide 911 services within 120 days. The 120-day clock is now ticking and VoIP service providers are working diligently to meet the deadline.

CompTel/ALTS, in partnership with TMC, is pleased to present a Webinar on the FCC’s E911 Order and its impact on VoIP service providers.

The event is set to take place on Monday, July 18th at 1pm Eastern Time.

During this Webinar you’ll hear from

* Bill Wilhelm, Partner, Swidler Berlin;
* Rich Grange, President New Global Telecom;
* Sarita Fernandes, Director of Product Marketing, Pac-West Telecomm, Inc.;
* Ronald Vidal, Group Vice President, Emerging Opportunities, Level3 Communications; and
* Donald P MacNeil, Executive Director, Carrier Services Operations, XO Communications

I’ll be chiming in as moderator.

I urge you to register now.  This is shaping up to be a critical discussion.

By the way, for those of you who may have missed it, Lance Armstrong has regained the yellow jersey in the wake of his strong performance yesterday. Today, the suffering continues as the peloton heads back into the Alps for a ride that features 2 HC (hors category) climbs, and another slightly less imposing Cat 1 climb. HC designates the most difficult mountain climbs.

I don't expect that Mr. Armstong will be relinquishing the yellow race leader's jersey any time soon.

EarthLink is rolling out Vling, a sparkling new service that integrates chat with voice through a single easy-to-use interface. Built on SIP, Vling currently runs on Windows XP and is available for free to all high-speed Internet users who want to connect on their terms via voice, data, or chat. The service is currently in beta.

Using peer-to-peer, file-sharing technology, Internet consumers can download Vling and begin making calls to other Vling users and customers of select other SIP-based services.

Over the next several months, EarthLink plans to further its position in the voice market by testing other innovative voice/VoIP technologies. Watch for them to get in to the dual-mode space with a dual-band WiFi/cell phone offering soon.

snom technology AG will demonstrate its full line of open-standard, SIP-based VoIP telephones as a sponsor of VoIP Sizzles in Dallas — held July 20-22 at the Sheraton Airport Grand, in Dallas, TX. 

I recently blogged about the upcoming event.

According to a company spokesperson, snom technology will be demonstrating its complete line of SIP standard-based VoIP telephones, including the recently-launched entry-level snom 320 and the large-display executive snom 360. snom's Dr. Michael Knieling, SVP Marketing, will be available throughout the event to consult with attendees and speak with media.

"We're excited to be sponsors of this unique event," says Dr. Knieling, "along with other key players in the fast-growing open IP telephony community. snom believes that open standards are key to reasonable solutions in VoIP — critical to reaching the largest market of carriers/SPs and the mass market of SME and larger enterprise users who insist on controlling costs, avoiding vendor lock-in for critical applications, gaining access to maximum features, integrating IP telephony with other applications in converged networks, and obtaining both robust solutions and solid ROI."

Dr. Christian Stredicke, snom CEO and founder, agrees. "In an open, standards-based IP telephony universe, the locus of value shifts away from monolithic telecom manufacturers and closed dealer networks to a more efficient, global ecology of best-of-breed component and software makers — providers who understand how to package standards in ways that deliver ROI and productivity benefits. At the same time, informed VARs, integrators and dealers gain new power to add value and earn significant profit: creating and supporting complete solutions and adapting off-the-shelf components to specific business needs."

Today is the day that we will separate the men from the boys at the Tour de France. In today's 10th stage, the first real mountain test in the Alps, expect Lance Aremstrong and his Discovery teammates to come under attack.

First and foremost, the German T-Mobile team  is not only placed well to apply pressure, they're also hungry to place one of their riders at the top of the general classification. Jan Ullrich, Alexandre Vinokourov, and Andreas Kloeden of the T-Mobile squad, are all legitimate contenders for the overall title, and today might be the day that one (or all) of them strike out for the top spot.

Vinokourov, the Kazakh champion, is 1 minute, 2 seconds behind Armstrong.

Ullrich, the 1997 Tour de France winner and a perennial runner-up (5 career second place finishes), trails by 1:36.

Kloeden, last year’s runner-up, is 1:50 behind.

Other notables include American Floyd Lanids, a former Armstrong teammate who now rides for Phonak at 1:50 behind Lance. Ivan Basso of Team CSC, third place finisher last year, is 1:26 back. His teammate, American Bobby Julich trails Armstrong by just 1:07.

Alcatel has posted higher-than-expected revenue growth for the second quarter thanks to higher than expected revenue growth resulting from strong momentum in IP routing and optical transmission, mobile communications, and enterprise solutions.

Announcing figures today, France-based communications gear maker reported Q2 revenues were up 8 per cent to €3.14Billion (~$3.82Billion).

The Radicati Group unveiled their latest report today, entitled On-Premises Corporate Unified Communications Market, 2005-2009. The research report provides market size, four-year forecasts, technology trends, and competitive information for the On-Premises Corporate Unified Communications market. The report also includes installed base data broken out by geography and size of business. 

The Radicati report forecasts healthy growth in the market over the next four years, largely driven and supported by emerging technologies such as VoIP, SIP, and a range of access technologies. 

Revenue is set to grow from $469M in 2005, to $939M in 2009, as Corporate Unified Communication vendors put forward a more convincing business case. 

I started with CTI magazine back in 1996. It was being hailed as the “Year of Unified Messaging.” We’ve seen wonderful ideas come and go (Wildfire anyone???), and great marketing promises remain unfulfilled.  

Can it finally be the “year of unified communications?” Or are we on track to handle that paperless office situation first?

The Internet Telephony Conference & EXPO show brochure is now available!

You can also download the conference grid at the site.

The program at this Fall's event was designed with the entire VoIP industry in mind -- if you are in search of unbiased, educational information, then Los Angeles is the only place you need to be to learn about VoIP this October.

Conference registration is open to all - the registration page can be accessed by clicking here.

The speaker roster at this year's event is incredible. Featured keynotes from former FCC Chair Michael Powell and erstwhile HP leader Carly Fiorina, as well as industry insight from the likes of NEC, Toshiba, Nortel, Lucent, Siemens, Juniper Networks, Deloitte & Touche, Aculab, and Vonexus make ths Internet Telephony Conference program second to none. 

CURRENT Communications Group, LLC, a Broadband over Power Line (BPL) service provider, today announced strategic investments from Goldman, Sachs & Co., Google Inc., and The Hearst Corporation.

"These investments provide us with both capital and operating assistance as we continue to roll out Broadband-over-Power Line services to provide voice, video and data services," said William Berkman, Chairman of CURRENT Communications Group. "With roughly two-thirds of the nation still without broadband and many utilities looking for means to upgrade their distribution networks, the acceleration of CURRENT's build-out is a clear win-win for consumers."

BPL technology enables the delivery of high-speed, two-way broadband through electrical outlets in homes and offices. It needs no special equipment in the home or office and transforms existing electrical wiring into a secure broadband network.

Google? check. Broadband? check. VoIP? check back later...

RNK Telecom has announced the launch of Edison — a GPS-enabled solution that is designed to connect between a user’s phone and VoIP connection, ensuring E911 systems continuously receive precise and updated information about the VoIP caller’s location.

RNK co-founder and CEO Richard Koch said, “Edison is one of many products RNK is pouring R&D funds into. We’ve been testing Edison for many months now, and it will prove that RNK isn’t just a phone company. Edison can save the lives of VoIP callers.”

RNK’s announcement comes just five weeks after the FCC mandated that all VoIP providers must provide enhanced 911 services within 120 days. Edison is being beta-tested, and the company plans to formally launch the service in 30-60 days.

The release follows.

RNK to Launch E911 VoIP Solution

Dedham, MA – July 7, 2005 – RNK Telecom today announced it will launch Edison, its E911 solution. Edison will be a potentially “life saving” emergency calling solution for RNK’s voice over Internet protocol (VoIP) resellers.

Edison is a GPS-enabled solution that will connect between a user’s phone and VoIP connection, ensuring E911 systems continuously receive precise and updated information about the VoIP caller’s location.

“Edison is one of many products RNK is pouring R&D funds into,” said Richard Koch, co-founder and CEO of RNK. “We’ve been testing Edison for many months now, and it will prove that RNK isn’t just a phone company. Edison can save the lives of VoIP callers.”

Unlike traditional Plain Old Telephone Service (POTS) customers, VoIP callers –often defined as nomadic users – frequently take their VoIP devices with them in a move or on the road without informing their phone company. With inaccurate or incomplete data of the caller’s whereabouts, an E911 system is unable to pinpoint a nomadic user’s exact location, which can foil an emergency rescue and put the caller’s life at risk.

“In the first phase, RNK’s Edison will relay the nomadic user’s precise geographical location, enabling RNK to quickly know if the user’s VoIP unit has been moved.” Koch continued. “This addresses the FCC’s concern that customers need not self-report their location when they move.”

“In a subsequent phase of development, Edison will provide updated geographical location to the appropriate E911 systems via a pseudo-ANI. RNK will simultaneously update the emergency ALI database, providing the end user’s address and phone number,” Koch concluded.

Additional examples of nomadic users whom may benefit from RNK’s Edison solution:

- A farm owner who has a single street address but a VoIP connection in another building
- An RV driver who has a single street address but is ‘mobile’ and can be anywhere in the nation

RNK’s announcement comes just five weeks after the FCC mandated that all VoIP providers must provide enhanced 911 services within 120 days. RNK is beta-testing Edison, and plans to formally launch the service in 30-60 days.

RNK is the exclusive distributor of Edison, and has the worldwide rights to market and sell the Edison E911 hardware, software and systems. GPS One Star Inc., a leading developer, manufacturer and service provider in the Global Positioning Satellite (GPS) marketplace, powers Edison’s basic GPS functionality.

Dan Hirby, founder of One Star, said “One Star is pleased to have an exclusivity agreement with RNK to integrate our patent-pending GPS devices into a full nomadic E911 VoIP solution.”

About Edison

As a robust phone company and leading VoIP wholesaler, RNK has several thousand VoIP users relying on its outstanding connectivity solutions. While providing E911 services in its footprint now, RNK has committed extraordinary resources toward developing Edison ahead of the FCC’s mandate.

Once implemented, RNK’S Edison system will self report both geographical information and street address of the end VoIP user. Here’s how:

In RNK’s initial phase of Edison, a stand alone GPS device is connected between an end user’s VoIP adapter and broadband connection. Edison, at specified intervals, sends the exact location (longitude, latitude and altitude) of the device and to RNK’s secure database servers. The information transfer is done over the Internet and does not rely on cell towers or other current GPS reporting methods.

When an end user first registers for VoIP service, his self reported location is matched with the corresponding GPS information sent by the Edison device. If the self reported information and the GPS information are within the same proximity, the customer’s profile is earmarked in RNK’s database. If the two information sources are outside proximity parameters, RNK notifies the end user, and a settlement is sought. Example: If, upon registering for VoIP service, a customer tells RNK he is in Washington, D.C., but the Edison system pinpoints him in Long Island, he will be contacted to settle his location for his E911 profile.

Once the settlement is established, the Edison solution will constantly update RNK’s user database. The end user is always urged to inform RNK of any anticipated movement or relocation of the Edison device and his VoIP phone or ATA adapter. But if the end user fails to inform RNK of a move, RNK will know either: 1.) the unit has been turned off and on; and/or 2.) if the device is reporting significantly different geographic information than what was initially reported by the end user. When RNK becomes aware of any such changes, it will contact the end user to verify the move and obtain updated E911 address information, and attempt to repopulate its databases.