Communications and Technology Blog - Tehrani.com - IMS Archives

Monetizing the Mobile Data Explosion with Tektronix Communications

2012-03-20T19:26:10Z

Remember when you were in the engineering lab and you relied on a Tektronix oscilloscope to analyze signals? I do and I deeply craved one of my own but could never afford one. But the company once part of Tektronix, Tektronix Communications does its best to ensure that not being able to afford their products is not a reason to keep you from buying. The company provides solutions for carriers which help with pre-deployment, network operations, customer care, network and RF engineering solutions as well as business performance. You see they want to ensure the solutions you buy, pay for themselves so carriers are more likely to purchase their products than a college kid eyeing a high-quality scope.

In a recent meeting with Laurence Alexander and Samir Marwaha they shared with me the news that the company has been awarded more than 50% of the LTE monitoring opportunities worldwide partnering with more than 15 tier one carriers around the globe. The company helps its customers across multiple “technology domains” such as EUTRAN, EPC, IMS and VoLTE.

Moreover the company is assisting carriers maximize revenue per subscriber as well as ensuring commercial readiness of LTE networks. They also assist with OTT partnerships between carriers and companies who can utilize such QoS enhanced pipes like perhaps in the video space. According to Laurence this is a win/win because carriers can charge for it and consumers get a better quality service.

Moreover deep packet classification enables service providers to get a better sense of what users are doing on the network. Moreover the company’s solutions allow operators to determine network quality from a user perspective – and at this point they can even alert customer care that a problem is taking place. Quality issues are just one cause of churn but certainly a very large portion of the churn pie. This sort of solution is designed to help carriers be proactive and retain customers – even ones which just had a negative experience.

Certainly one of the reasons carriers to choose Tektronics Communications has to do with the breadth of product line starting with a product like K2Air/NSA for advanced RAN and RF performance analysis to OptiMon for deep drive RAN troubleshooting. Then there is the Iris series – traffic analyzers, session analyzers and performance intelligence solutions – all the way up to touchpoint CEM for customer experience management.

And as the growth of LTE and VoLTE accelerates so should the opportunities for the company to assist carriers in providing better quality of service to customers. In addition, the company aims to help them find new ways to generate revenue by providing differentiated, higher quality services.

Disclosure: I am a shareholder in Tektronix Communications parent Danaher. Pictured is the graphic of Danaher's holdings in the tech, telecom and related spaces.

Neustar Aims to Make Mobile App Development Easier

2012-03-20T15:26:39Z

With over half a million apps in the Apple App Store alone one might argue that developers have all the tools they have to develop compelling applications but what if there was a way to take traditional apps and integrate them more closely with carrier networks and big data analytics allowing them to be more powerful, spur increased consumer spending while greasing the wheels of mobile commerce and more?

Recently Jean Foster and Steve Edwards at Neustar showed me their Intelligent Cloud service which integrates rich anonymized databases from TARGUSInfo with access to carrier networks and other information to accelerate developer productivity and to frankly enable applications to become better drivers of value for consumers and revenue for advertisers and merchants.

One demo they showed me involved a gift card where a user scans the bar code associated with it. At this point a unique URL is passed to a browser and opened on the mobile device allowing a consumer to check balance information, make a payment and connect their cell phone to the card. Then a consumer can opt in for marketing information and can further text message to get a response with balance information on the card. Then they can scan a code on a product to have the amount debited from the card. In this manner the cell phone becomes the card meaning the card doesn’t need to be used again.

It is worth mentioning that Neustar handles the messaging and communications in the above demo.

The company has covered North America with carrier partnerships and recently Telus has signed up to the platform enabling developers to integrate the best of Neustar APIs with those from Telus allowing such things as mobile payments and messaging.

Neustar also provides communications for enterprises – for example their Mobile Enterprise Services solution allows an HR department to communicate rapidly with workers not only via SMS but via email and desktop solutions. This solution is powered by the company’s Text Everywhere service.

They also have a Geofence solution enabling marketing based upon location. Partner ZOS enables the company to provide its customers the ability to provide messages and offers when users are near specific locations.

Neustar has a storied history as a trusted third party providing SMS short codes, DNS look ups LNP information and more. They believe this position in the market allows them to be the optimal partner at a time when privacy and consent are becoming so important.

Last year the company purchased TARGUSInfo and is now able to correlate anonymized data from 200 independent databases allowing an app developer for example to see if a cell phone user is likely to be able to purchase a luxury car, etc.

Neustar is a fascinating organization as it has its hands in myriad areas of technology and communications – this move into big data, analytics and mobile enablement for developers seems like a smart diversification move as many of its legacy markets begin to slow.

And certainly with all the recent security challenges facing mobile app developers, it is possible the company really is at the right place at the right time to ensure increased user, carrier and ecosystem trust.

Acme Packet University Live Blog

2012-03-15T13:10:15Z

Acme Packet is hosting their Acme Packet University at Harvard University in Cambridge. I spoke with the company's Co-Founder, CEO & President Andy Ory before the session kicked off and the topic of Sonus came up. The two companies partnered for many years and eventually Sonus reached out to Acme to purchase them however Acme had begun the filing to go public and Sonus had taken a hit to their market cap so the deal never happened.

According to Andy, the idea today is to explain to the world how complicated the SBC space is - one part switch, security device and softswitch. These are separate disciplines in most companies - making it more complicated to build a good SBC.

He then briefly outlined the future and what we will learn today - how hosted-IMS based solutions will help move the industry forward.

9:00 Session kicks off

Marianne Budnick, CMO kicked things off and set the tone for the day.

Patrick MeLampy Co-Founder and CTO began with a history of the
markets and Acme.

Net2Phone NetMeeting had problems - in part because they wouldn't work through NAT and this derailed the company.

The company started in Andy's house and the workers were day trading as well as working - this was 2000 after all.

Lots of talk of the alphabet soup of standards IP communications had to deal with until around the time of 9/11.

The partnership with Sonus Networks helped them a great deal back in the day.

People like Henry Sinnreich and Jonathon Rosenberg "hated" Acme because they didn't want the carriers to be able to control the endpoints. They were fans of a more democratized approach.

SIP trunking has a way to go and is driving our business forward.

Other opportunities: More and more CODECS, more transcoding, more operating systems, hypervisors, lawful intercept points, etc.

Patrick explains how SBCs work - as if they were transactions in a bank.

"I wish SIP were simple like IP." There are 215 RFCs, 80 Internet drafts in last 12 months alone.

The reason things are so complicated is because of vested interests and that is the way things work today. In other words, the traffic from your 4G cell phone shouldn't need to travel back to the US when you are in Europe but that is what is happening because that is how it works today.

4G phones use a different CODEC than 3G phones - transcoding gateways are cheaper to buy than adding both CODECs to 4G phones in-part because licensing prices from Qualcomm are high. These gateways make carrier networks far more complicated.

Doing nothing not an option for carriers - voice is declining in revenue while complexity is increasing. Acme is not just protecting and securing. They went from securing to allowing interoperability as SIP versions proliferated. In the future they see their role as allowing simpler deployment of voice and thereby allowing incumbents to compete with services like Google Voice.

The future is about deploying SBC and related infrastructure in the cloud in an elastic manner. The evolved packet core needs to be another access network - the role needs to be redefined.

Load balancing is important - they sell a load balancer. The important issue is he orchestration of the service across these computers. Session management in call recording and monitoring is very very important.

Andy: The complexity is increasing - we have hired 200 people in the last 18-20 months to deal with this complexity. It is very hard for people for legacy companies to deal with this problem. In a statement of potential risk for the company he said, "The challenge is things get so complex that we can't deal with the complexity either." He continued, "We don't think this will happen - this is all we are focused on."

Dan Warren Sr. Technologist with GSMA takes stage to discuss IMS implementation in the cloud.

It is tough for carriers to compete with startups - on the Internet - many companies have to die for a few to be successful. The internet has more scale and is faster - operators also can't work together because of antitrust concerns.

What operators do well is provide full connectivity - you can call anywhere in the world with 10 digits. They do standards well also - they make ecosystems work without suppressing innovation - lots of different types of phones, etc.

SS7 networks were based on trust - but in IP world "Everyone thinks everyone else is trying to screw them" this is why we need security. My thoughts are that IP is open and more accessible to hacking - you would need a class 4 or 5 switch to hack into the SS7 network and these things would take an entire floor of a building - even if you could afford it, you couldn't run and hide with it if the cops came.

RCS is an ecosystem allowing you to have seamless messaging - started 7 years ago to compete with Skype. IMS is complex and expensive and RCS does things that Skype and Facebook does for free so business model doesnt make sense. Now, carriers have to utilize IMS because they need a viable voice service over LTE so RCS does begin to make sense.

VoLTE will be essential for 4G carriers and these network deployments will all require SBCs - in-depth discussion of how much potential there will be for Acme and SBC space in general as LTE gets rolled out. One limiting factor is VoLTE handsets which have good battery life. Then there was a chicken and egg discussion about making sure networks re ready for the handsets before the handsets become available.

11:45 am

Kevin Klett VP Product Management:

Discussion of various standards and signaling protocols - how important user experience is. Is network available - not just jitter and latency. Also a discussion of regulatory agencies and the fact that incumbent carriers have to deal with this challenge while new entrants do not.

You must control the signaling and bearer plane to ensure a secure network - to make sure you can ensure who gets on the network.
wi
Huge myth that internal threats aren't a problem - in other words you can't necessarily trust authenticated devices. Security is about keeping the network up and running. There can be damage to brand, legal implications, loss of revenue and SLAs issues. Also have to be able to keep subscribers anonymous. Signaling contains a good deal of information.

There are 6-7 variations of lawful intercept.

Contact centers are another large area of growth for the company. Traditional and IP based contact centers.

There haven't been large-scale IMS networks rolled out to date. 130+ projects in 55 countries have been deployed. The company interops with 8+ major IMS vendors.

Ron Gruia with Frost & Sullivan asks: Can you scale signaling and media independently

Andy said: Carriers want to know if you can you ride Moore's law.

Carriers wasn't to be able to decrease and increase capacity as needed. They do not want to buy all new hardware. We have worked on optimizing our solutions to run on VMWare and Zen.

We aren't dogmatic - we can do this on purpose built or custom hardware. We think this will happen - all different ways.

There is variable pricing in such a scenario where you can purchase service as needed as well as "keep in reserve" pricing for more bursty traffic.

We can disrupt our own business model - this is an advantage for us and disadvantage for the incumbent IMS providers.

This statement was in reference to the fact that the company can provide hosted services without concern regarding killing off the switching side of the house, etc. This would be a concern of larger competitors who sell more integrated solutions which are soup to nuts solutions. (On a separate note shouldn't this be soup to crackers? Why nuts?)

12:45 lunch

Andy takes the podium at lunch - he discussed how partnering in the early days with large NEMs was important to their success. This is a bit funny because I tend to agree with Andy - at least that is the sense of the market. Patrick said earlier today that technology decisions are why Acme prevailed. This reminds me of the story (excuse my paraphrasing from memory) where a bunch of people with blindfolds go into a room and try to figure out what the object in the room is - its an elephant. One person grabbed a leg and proclaimed it was a tree while another grabbed the trunk and said it was a snake. The moral - your point of view is shaped by you perspective.

Important points

Unified Service: anytime, anywhere. Like accessing Gmail anywhere.
Customers have relationships with more service providers - this will only increase.
Cloud can be centralized and dynamic around the edges
Thinks communications for SMBs will clearly move to cloud.
More federated communications will take place - like Facebook working with mobile carriers, etc. Customers may purchase OTT services but purchase quality of service and better quality connectivity from a carrier.
Slide of new devices from past 3 weeks - 8 in total see photo below.
IP = identity and privacy. We don't trust an email from the bank asking for a user name and password but we do trust the phone. As we move to IP - someone has to enable this trusted environment. All these choices require more remediation and control.
In IP we don't trust anyone.
addresses and identities are heterogeneous and will continue to be
CODECS are breeding like rabbits - Microsoft seems to be creating them at will - then went through scores of codecs from different markets, companies and standards bodies.

Discussion - what happens if there are less CODECS due to standards bodies simplifying things. Andy says no as codecs introduce complexity and degrade quality.

No matter how much bandwidth you give someone - they will find a way to overdrive it. LTE will not solve the bandwidth problem. There will continue to be more tiers, WiFi offload, small cells, etc. LTE is overburdened in theory before it is even deployed.
Some sessions more important than others. Sessions which have been paid for or are reserved - are more important.
Network/sessions needs control and manageability.
Primary lines will always have regulatory compliance E-911 and lawful intercept.
Business models will be heterogeneous - some will provide pipes others will build brands and create services. Others will partner with companies and sell access to their service infrastructure - A carrier can provide regulatory compliance - ensure calls are connected properly, etc.
IP networks will be service-enabled and must provide normalized communications.
The company is beginning to transition from an SBC company to on which provides session delivery networking. (This is in line with the company's marketing at MWC 2012 in Barcelona).
Video is the same as voice from a session delivery perspective.
One interesting point is that as sessions hop onto untrusted networks like WiFi at Starbucks - you will need SBCs to deal with the connections to keep them trusted. Reminder about how carriers are moving to WiFI offload - see my recent article on Taqua from MWC 2012.

1:40 pm

Diane Myers Infonetics:

VoIP service revenue continues to grow. Some carriers - one in China are transitioning to VoIP to save money on power consumed by their legacy equipment.

Discussion of all the vendors in the market from Sons, Radisys, GENBAND, Metaswitch, Broadsoft, AudioCdes, etc.

Discussion of an IMS chart - she mentioned how difficult it is to monitor the market because the items on an IMS chart represent elements not necessarily SKUs or boxes.

SK Telecom has been very innovative in IMS, providing video, messaging, whiteboarding and more - you must check them out - they are doing IMS over wireless.

Significant grilling of analyst about a chart she showed with SBC growth continuing at a compound rate through 2016.

Others in the room said no carrier spending chart ever looks like this - going up every year.

Anther person in the room chimed in explaining that the dips in the market are impossible to predict in advance.

Diane explained how there is also a major move to the cloud by all carriers - this may have caused them to slow down decision-making in general as they determine where to spend, how much and where.

Moreover, carrier are trying to figure out where to spend as subscriber habits are changing - they may use less or more voice in the future. Carriers need to spend accordingly.

2:20 pm

Diagram with clouds - a SIP trunking discussion.

Segue into Enterprise from Carrier market

At end of 2010, under 10% (8%) of enterprise lines use SIP trunking - many companies dont use it to its capacity. Europe has less penetration. UK is farther ahead. We have many competitive carriers in the US which is why we have such great growth here.

She believes that this year it will be over 10%.

Verizon predicts massive SIP trunking growth from this year to next but she is under NDA and no matter how much the room grilled her, she wouldn't buckle.

She showed a chart of SIP trunking growth - blue portion represents North America.

Marianne Budnik introduces Zeus Kerravala of ZK Research:

Zeus: brief talk of VoIP peering - companies need to leverage employee knowledge base - determine who is available and where and when. Collaboration between organizations such as in the medical markets and universities.

UC benefits are greatest when you are mobile. Integrating information between apps for example is far more useful when you cant easily cut and paste with large screens and a mouse.

Example of mobility in the enterprise: A large waste management company has delivery personnel using mobile devices - when they see a full dumpster they take a photo and send it to sales. Sales calls to see if the company wants an unscheduled pickup.

Zeus was a video skeptic but is using it more personally now. Can organizations rebuild processes with video built in?

An enterprise video example - a smaller bank is able to compete with larger ones using tablets which record video - agents go to buildings looking for financing and take photos and videos which are sent to HQ. This speeds up the loan approval process.

Brief CEBP or communications enabled business process discussion - a travel organization who is regional had the best year in 2009. They integrated videos of different destinations on their website. They then tracked movement online of where users were looking. They then proactively reached out on a targeted basis. For example, we noticed you may be considering a trip to Aruba. Close rates went from 20% to 60%!

CEBP is like the move from mainframe to browser - users didn't know what Windows apps they wanted because they had no idea. Then they aw the GUI-based apps and the momentum started. Once enterprises see it, then they will start to deploy. There will likely be no general killer apps but perhaps vertical oriented ones like telemedicine at Johns Hopkins, etc. Mobility may be one.

Thinks SIP trunking penetration in US is under 5% and under 2% outside th US. He says vendors sell it wrong - it isnt just about cost savings. He says you should rearchitect your network when you move to SIP. You should think of how many applications you have wher the functionality is local. In other ords you don't have CRM or email in every branch - then why communications? Use WAN for distribution and buy trunk lines in data centers only.

He believes business video will be a huge market - we will see much more use of it.

Many companies reduce travel budgets in conjunction with purchasing video equipment. He says but there is huge upside - in customer service for example. Being green as a driver has come and gone - it is more about travel.

3:10 pm

People understand better with video - 200% improvement in understanding using video. Schools for example use it if you miss a class. Also used by corporate training departments - sometimes the HR department purchases - not IT. 40% increase in retention and 73% of meetings end faster when you use video.

CEBP will evolve or perhaps branch off into VEBP or video enabled business process.

Tablets will accelerate UC adoption.

Another example of CEBP - in the UK they had to renew many medical cards and couldn't do it with current staff. They put tools in to enable self-service and used chat to enable agents to deal with 4-5 people at once instead of one like the phone. They paid the integrator based on the number of transactions and allowed users to save money if they used self service. Since they had no budget they were able to use the savings to pay the contractor. They paid 4 times as much in total but considered it a win/win for all involved.

Patrick takes stage to discuss an overview of the day - the slide above shows the company's session management platform. Lots of discussion about how the company can grow - the relationship with Microsoft, Broadsoft, etc.

Conclusion

I am sure this event was a success in the eyes of the company. It gave them media exposure as well. The main takeaway was that complexity is not a constant, it is increasing and dramatically so. Moreover, SBCs will be essential in the world of 4G/LTE as carriers need branded voice service over this next-gen wireless solution.

Many analysts I spoke with believe the company has effectively gained a lead on others, keeping competitors from taking its customers. Sonus seems to be the biggest threat but the analysts want to see more positive quarters from the company before they feel confident they can take share of new business as opposed to upgrading existing equipment.

The reality of the the communications space is that SIP trunking is not slowing down - the SIP trunking sessions at ITEXPO (the first place in the world where such courses were offered) have been standing-room only for many years and as you can see from the above analyst comments we are in the very early days of this market which requires SBCs.

Then there is the LTE space which also requires SBCs - again, we are in the very early days with many carriers looking to learn from Verizon's successes and mistakes.

Finally, there is the death of PSTN - TMC has hosted many sessions on this topic at past ITEXPOs and the FCC seems dead set on sunsetting your father's and grandfather's phone network this decade. I bring up the fact that we have hosted sessions because I get the sense that the world isn't really aware that this will happen - or perhaps they don't care. This means it is either too far away for anyone to take it seriously or perhaps its like when the US tried to convert to the metric system and most Americans just wouldn't take it seriously. Perhaps prohibition is a better example - after all I am in Mass and St. Patrick's Day is around the corner.

Andy and I discussed some of the above and we both agree the trends are very positive for the market - the reality is timing is impossible to determine in any market. If I could see the future with regards to timing I would have bought Priceline in the single digits and sold it at $650.

But SIP trunking growth around the world should provide a solid market for sales for the next decade and at some point the other two trends should be in full swing as well.

Regardless of whether I am a shareholder of a company or not I do my best to report fairly.

So I want to also point out some concerns that are worth taking seriously. The biggest challenge in the carrier space could come from a consortium of competitors working together to take share from Acme. It is difficult to determine which vendors would take part in such an alliance but the need for growth is certainly there from virtually every incumbent provider. Andy mentioned the experience/expertise/core competency may not exist at other companies but what if a Chinese vendor or two was to jump into such an alliance as well by providing cheap labor and products? Sure it may be unlikely but worth considering.

In the enterprise and SMB space, Acme is far from a household name - so there is lots of opportunity for any or all the small players in the market to take share.

And the argument that Acme has to win this market because they are dominant on the high end may not be the case because as you may recall, when IBM owned the mainframe market, DEC took over the SMB space. In other words, a market lead in one segment does not guarantee success in all segments. PR, marketing and press will help determine where the marketshare will go. And the SMB space is not as complex so this is another factor in favor of the competition.

One of the biggest fears of the analyst community was standards and CODEC consolidation - but Andy says this complexity is something he would like to see lessen. Analysts seem to think the more complexity, the better for Acme and they could be correct but there is a bewildering hodgepodge of standards - what other industry has a standard such as SIP but then has to sell SIP gateways so disparate SIP solutions can communicate with one another?

I'm not a financial analyst and trying to determine how a company will perform on a quarter by quarter basis may be one of the most challenging jobs there is. But I see macro trends and I agree with the the bullish analysts who see this sector performing well. Moreover as Acme becomes more of a partner with its customers as opposed to a box pusher and moreover moves into the cloud, there are significant opportunities for the company to continue to command a large share of a growing market.

But by the same token a company that isn't a household name in a market leaves room for the rest of the field to grow.

But after a day of grilling company execs the analysts seem satisfied that Acme Packet is in a good position over the long haul and as one financial analyst said to me - they seem to have a mote around their business.

Disclosure: I am an Acme Packet shareholder

Taqua Leverages WiFi, Introduces Backhaul Product at MWC 2012

2012-03-10T22:59:49Z

Taqua has a made a name for itself serving carriers of all sizes with products like the T7000 for wireless and wireline switching, the T7100 for media management, trunking and peering as well as the TCS6100 for small cell and voice messaging services over 4G/LTE.

At Mobile World Congress 2012 in Barcelona I had a chance to speak with Payam Maveddat the company’s EVP of Product Line Management about the fact that carriers have become very interested in WiFi solutions. A frequent discussion at the show in fact was that carriers who wouldn’t even discuss WiFi with you a few years back are now actively asking for the technology to help alleviate the spectrum crunch they are all facing.

Maveddat explained that his customers are happy that they can leverage VoLTE, VoWiFi and femtocells with the company’s solutions. In addition he highlighted the company’s Android VoIP client that works with the company’s TCS6100. The app actively shuts down the wireless radio when it detects an active WiFi network and subsequently uses WiFi for not only the voice but for SMS communications. He says this solution works well for carriers who want to augment femtocells or even for carriers who can’t afford them.

I asked if he thought such a solution would ever be released by Apple – remember that Apple more tightly controls its device features and functions so a third-party couldn’t release such functionality with current levels of OS access. He thought over time that Apple would release such functionality and I tend to agree as carrier pressure to minimize spectrum usage will likely reach a fever pitch and if they don’t do anything, the impending spectrum crunch will affect all Apple users on 3G and 4G networks.

As a side benefit, WiFi is more efficient than 3G and 4G as it doesn’t need to transmit as far – so if Apple was to enable this sort of solution, many users – especially heavy talkers using its 3G and 4G iPhones would likely experience a bump in battery life.

At MWC, the company also released a non-line-of-site backhaul solution for picocells and WiFi hotspots which have a range of between 300M and 2.5 kilometers. The current solution named the W-Series has throughput in the 70 Mbps range with a product roadmap which takes it into the hundreds of Mbps.

This sort of product may be the ideal lamp post solution allowing carriers to rapidly and inexpensively provide access in areas where microwave or fiber backhaul solutions are impractical. The company explains that each small cell site is connected by Ethernet to a Taqua Remote Backhaul Module over licensed but underutilized and inexpensive spectrum to its Hub Backhaul Module. Moreover, management of hundreds of clusters can be done over a single user interface.

As you might have guessed the technology powering the backhaul is OFDM and MIMO and can work in multiple bands from 2 to 4 GHz.

It has been great to see how the company has innovated over the years and the conversation with Payam shows how Taqua is certainly addressing carrier pain points by allowing them to reduce spectrum congestion.

Metaswitch Brings SBCs to the Cloud

2012-02-22T17:12:42Z

Metaswitch is relatively new to the SBC game but they already have been thinking of ways of taking session border controllers and making them more flexible and scalable. To that end the company has put its Perimeta SBC in the cloud allowing it to run on COTS servers with a variety of hypervisors.

According to Steve Gleave, VP of Marketing at Metaswitch, "The arguments for separating signaling and media functions in a session border controller are now well understood. The commercial benefits of running session border control on COTS platforms are also clear. So moving the signaling control function into the cloud, and leveraging the economies of generic server platforms and inherent system redundancy is a logical progression. By detaching SBC licenses from physically deployed platforms, operators can be sure that there are "no SBC licenses left behind" when integrated appliances max out before purchased license limits are reached"

The company will be demonstrating their new SBC functionality running on the Amazon EC2 Elastic Compute Cloud at MWC next week in Barcelona. I hope to see it running there.

Despite Outages, Verizon Has Record Quarter

2012-01-24T15:09:21Z

Months back Verizon sent me a 4G personal hotspot to review and I confess it is one of the most important pieces of technology I have. For example just yesterday I was at a lunch meeting for an extended period of time – and I had an iPad and keyboard with me. The Optimum WiFi network was not working well. AT&T was also having problems for whatever reason – it was very slow. I cranked up the Verizon hotspot and was able to work at lightening speeds.

But as high profile as Verizon has been with the roll out of its 4G network it has also had record outages this past month. In fact some of my initial testing was disrupted by the outages – causing me productivity as I rebooted the card frequently thinking there was a hardware issue.

But it seems these challenges didn’t have a major impact on the company because Verizon just reported record revenue growth in the fourth quarter which was fueled not only by Wireless but FiOS and professional services.

Since Verizon Wireless has a reputation for having a great network it is likely the company shook off the outages and consumers and businesses determined this was a freak series of occurrences that likely won’t repeat. Verizon certainly has to be careful to not have any more outages in the foreseeable future as it depends on the superiority of its network in the minds of its customers to enable it to charge high prices for broadband and other access.

How great was wireless growth? Revenue for the company in Q4 was $18.3B up 13% YoY while data revenue was $6.3B up $19.2%. The company also boasted it had the largest number of net retail additions in three years – no doubt due not only to the iPhone but the slew of new devices the company has rolled out lately. But before we get to gadgets, the number of additions was 1.5M including 1.2M postpaid and the company now has 108.7M total connections and 92.2M retail customers.

The real strength here is in the retail postpaid data ARPU which is up a staggering 14.3%. The good news for the company is consumers are hooked on bandwidth-hungry applications such as streaming audio and video as well as Skype. As long as AT&T gives Verizon cover by raising prices, both companies will be able to charge on a metered basis meaning consumers will have to continue spending more on data.

And I can guarantee that most customers don’t realize that at 4G speeds you can hit your bandwidth caps much much faster than on 3G.

The company also introduced six new 4G LTE devices last quarter: the Droid Razr by Motorola; the Samsung Stratosphere; the HTC Rezound; the Galaxy Nexus by Samsung; and Droid Xyboard tablets in 10.1-inch and 8-inch varieties. Earlier this month, VZW further announced that six additional 4G LTE devices would be available soon, including two mobile hotspots, (the company now calls them Jetpacks) from ZTE and Novatel; three smartphones – the Droid 4 and Droid Razr Maxx from Motorola, and the Spectrum from LG, which launched last week; and the Samsung Galaxy Tab 7.7.

In its statement the company reminded us of its purchase of AWS licenses from SpecrumCo – a JV of Comcast, Time Warner, Bright House Networks and Cox TMI Wireless. This deal is subject to regulatory approval and my feeling is regulators will be very skeptical of the deal as it is essentially an asset purchase with a condition that each company won’t compete in each other’s markets. It seems highly anti-consumer to me.

The good news is 4G is booming, wireless device growth is staggering and competition – at least from device companies is very alive and well. Businesses and consumers for their part obviously place high value on 4G and wireless in general – how else do you explain the massive growth in connections as well as ARPU? All this in a depressed economy where the real unemployment and underemployment rate is said to be as high as 18%!

Imagine what the growth of Verizon will be in a healthier business climate.

One looming challenge of course is the strain on the 4G network. My testing of Verizon Wireless and the same is true for any wireless carrier shows speeds vary widely moment to moment. If you get enough Netflix subscribers to simultaneously watch TV in one area of the country you are going to kill the tower’s bandwidth and subsequently everyone suffers.

And this is in-part the reason the wireless companies have to be very careful with pricing – they need to ensure they can afford to upgrade their networks but also not make their pricing terms so onerous that they kill the golden ARPU-increasing egg laying goose.

To learn more about 4G wireless technologies be sure to attend the 4GWE Conference, collocated with TMC’s ITEXPO East 2012 taking place Jan. 31-Feb. 3 2012, in Miami, FL. Co-sponsored by TMC (News - Alert) where I am CEO.

Julius Genachowski Makes Brilliant Move at FCC in Hiring Henning Schulzrinne as CTO

2011-12-29T17:48:30Z

Earlier this month, FCC Chairman Julius Genachowski announced the appointment of Henning Schulzrinne as Chief Technology Officer – a major move forward for the FCC and the US communications regulatory environment. This move was made in-part because the FCC has had to keep up with fairly rapid changes in the communications and networking worlds. Telephony was once a circuit-switched service provided by a handful of large telecommunications companies and a number of regional players.

It was relatively easy to understand and regulate. But when VoIP and other forms of IP communications came on the scene, the world became less defined. Vonage didn’t own the “pipes” to people’s houses but they provided telephone service. Thus the move from circuit switched communications to packet switched was underway. This raised issues of net neutrality but also changed the way communications service was to be regulated. Moreover, the FCC under Kevin Martin decided that VoIP providers had to rapidly deploy E911 service just like LECs and CLECs. This additional cost caused some VoIP players to go under but as Martin told me in a keynote interview at a recent ITEXPO – it wasn’t anything personal but a safety issue which needed addressing.

Fast forward to recent times… You know I have spoken about the death of the PSTN in this space and moreover I decided to dedicate a keynote lunch panel to the topic at ITEXPO as well. Although we are a number of years away from the inevitable death of the public switched telephone network, it will happen. Moreover, much of the technologies and standards to make this transition aren’t yet in place.

And to make matters worse it is only a matter of time before special interest groups get into the action and make statements about how the evil government and phone companies want to take away grandma’s telephone service.

So when the switch happens… It needs to be absolutely perfect. Flawless in fact.

This brings us to the news of Schulzrinne who has played an absolutely crucial role in the standards process and advancement of IP communications. Recently he was chair of the Computer Science department at Columbia University as well as co-chair of the Internet Technical Committee of the IEEE Communications Society. Perhaps most importantly he co-designed the Session Initiation Protocol which we affectionately know as SIP. Also the Real Time Streaming Protocol, the Real-time Transport Protocol and the General Internet Signaling Transport Protocol.

Schulzrinne has spoken at past TMC events and been an important part of the content we have created over the years – going back to the early days of Internet Telephony Magazine which launched in February of 1998. Here is a search (with news feeds) on TMCnet where you can see some of the mentions and coverage related to Schulzrinne.

The FCC is a government agency which generally means it is bogged down by bureaucracy, red tape and politics so a logical question is how much change can one man bring? I am unsure. But this move is a stroke of genius by Julius Genachowski and I give him the highest marks for his foresight in choosing Henning for such an important position at a time when the nation’s communications network will be experiencing absolutely revolutionary technological advancements.

At Metaswitch Forum 2011

2011-10-03T20:37:19Z

I presented at two sessions today at Metaswitch Forum 2011 and both focused on wireline trends in the market. The general theme of this conference so far has to do with how carriers can compete in a world which is rapidly becoming mobile and social. Metaswitch for it's part has been busy improving it's platforms allowing carriers to take back control of business relationships with their customers.

Interesting takeaways from this session is a discussion being led by Anusha 'Ash' Nirmalananthan of Metaswitch where she is dissecting some social network activities in Facebook and Skype and exposing areas of exploitation for carriers.

She says, innovation and differentiation are crucial for carriers going forward. "Carriers need something unique" she exclaimed.

She further shared a customer survey that said they want VoIP carriers to provide them with apps on their smartphones.

Location:Audrie St,Las Vegas,United States

ITEXPO West 2011 Austin Highlights

2011-08-23T19:09:30Z

Before all ITEXPO events I do a final proofread of the show directory and this one may be the biggest ever at 132 pages with tabs (just doing our part to support the economy). We will post a PDF version soon so you can see what’s in it but until then, here are some highlights that caught my eye:

Keynotes & Exhibits Tuesday, September 13^th at 9:15 AM we have Ian Pennell from Cisco and at 4:30 PM-5:30 PM we have keynotes from Siemens and IBM followed by a Grand Opening Networking Reception sponsored by Interact from 5:30-7:30.

Wednesday, September 14^th at 10:00 AM – 11:00 AM we have keynotes from Polycom and DHL followed by exhibits from 11:00 AM- 4:00 PM. Then at 4:00 PM there is a Cocktail reception sponsored by Rackspace Hosting and at 4:45 you could win a pair of mountain bikes from Mellow Johnny's Bike Shop - an Austin Institution ( I am told). Then at 5:00 PM Bob Metcalfe kicks off StartupCamp4 Comms Edition with a keynote and this event continues until 8:00 PM and is free to attend.

Thursday, September 15^th Exhibits open at 11:00 AM and the Jeep giveaway begins at 2:45 PM (see below). Thanks to Jeep sponsors AireSpring, AudioCodes, Windstream Communications, Panasonic, Sotel Systems, Taqua, WildPackets and VocalTec.

ITEXPO West voted #3 fastest growing trade show by Trade Show Magazine – thanks to the fine editors of this publication and to all our loyal attendees who have allowed this conference to honored. We really appreciate your support.

You can win a Jeep – TMC has given away dozens of cars over the years and we will be giving away yet another on Thursday, September 15^th at 2:45 PM. And YES, you have to be present to win.

Free WiFi, as long as less than 5,800 devices are trying to connect at once, I am told the Austin Convention Center will have fast WiFi access for everyone who wants it. Like many of you, I know from painful experience that tech crowds like ITEXPO attendees can bring just about any WiFi network to its knees so I am looking forward to seeing how this network does under heavy load.

Super WiFi & white spaces Speaking WiFi, Tuesday morning 9/13 Super WiFi Summit kicks off and this paid conference will teach you about how white space technology could be as disruptive to 4G/wireless as VoIP was to the PSTN. Imagine if you knew what you know about VoIP today – but in 1998. What investment and career decisions would you have made as a result? And now you see the Super WiFi opportunity. It all takes place in room 5C on the 3^rd floor – learn more here and check out the agenda or register.

HTML5 Revolution In room 6B, Sept 13-15^th you will find the most authoritative conference on HTML5 anywhere and if you are interested in learning how HTML5 will disrupt app stores and allow developers to create broad-reaching apps without having to develop for multiple architectures, this conference is for you. Sessions will allow designers, entrepreneurs, programmers and investors to learn everything they need to know about the future of cross-platform and mobile development. Here is the link to the HTML5 Summit, a Devcon5 Event. Here are some of the latest developments on the show.

MPLS University MegaPath is sponsoring MPLS University on Wednesday, Sept 14th in room 7 between 2:00 and 4:00 PM and it is free to all attendees. Please contact the company with questions and pregister here.

Regulations change everything: Regulatory 2.0 Workshop takes place in room 4A for a half-day on Thursday, September 15^th. The federal government, FCC and other governmental agencies have changed the fortunes of entire industries with the simple passing of a bill. And with the massive disruption in the market taking place with the PSTN potentially being eliminated, OTT set-top boxes eliminating the need for cable operators and wireless eliminating the need for fixed lines and countless USF issues, you need to get a sense of what the feds and state regulators are planning for your future.

Voice peering continues to grow The VIPeering conference takes place in room 5A Tuesday, September 13^th and focuses on crucial factors in the voice peering market like the role of the SBC, number portability and more.

SIP Trunking on a tear Let’s face it, virtually all SMB and enterprise telephony on a global scale will be replaced by SIP trunks and this massive opportunity is why the Ingate SIP Trunking Summit has been such a success at ITEXPO for many years. ITEXPO was the first show in the world with a SIP trunking workshop and we continue to have the most knowledgeable speakers and curriculum designers anywhere. Learn more about this free 3-day event.

Asterisk and open source telephony You know who you are – you prefer to have your telephony be open-source either because you enjoy the added flexibility, want full-control or perhaps you like the cost-savings that comes with this more open form of telecom. Whatever the reasons for your interest, you have to be at Asterisk 1-2-3 training hosted by Digium in meeting room 2 on the first floor on Monday September 12^th where you can learn how to connect SIP phones to Asterisk, how to add logic and even how to compile Asterisk from source code. This is a good fit if you are relatively new to the topic or are exploring your options.

What, more SIP? You know you need to know as much about SIP as possible to ensure you can effectively interconnect your organization’s telecom systems. This is especially true in light of the fact that SIP systems aren’t always interoperable out of the box. And just for you we have assembled some of the best speakers anywhere to teach you at the SIP Tutorial which takes place Thursday, September 15^th in room 5A.

Need talent or a job? We are thrilled that the people from Dice will be hosting a high tech job fair at ITEXPO September 15^th, between 11:00 AM -3:00PM. For more information email Bob Westerkamp or call 800-695-1939.

Dialogic Solution Showcase? On page 53 of the directory there is an ad from Dialogic touting a Solution Showcase. I am not sure what this is but is certainly reminds me of the nineties when Dialogic used to feature its solution partners at shows around the US and world. Anyone else remember the Computer Telephony shows in LA? I’ll be stopping by their booth #407 to learn more.

Send your marketing team Marketing departments have never had to deal with the level of technology and complexity that exists today. SEO, social, deal sites, print, TV, radio, online ads, online communities, resource centers, lead generation, CRM management, analytics and so on. To help, we have launched a CMO Summit on Tuesday, Sept 13, 7:30-9:30 at Fogo de Chao. This event requires an application be filled out and approved so thanks for your understanding.

When a cloudy future is good You mean you haven’t thought about moving your communications in the cloud like millions of others? Well even if you are sure you don’t want to move all your comms to the cloud you should explore moving some of it or at least be educated enough to defend your position in the next meeting with your boss. The best place to learn about cloud communications of course is at Cloud Communications Expo on the level one ballroom C Tuesday, September 13^th and Wednesday, September 14^th.

Some highlights from the above expo are:

International Hour on Tuesday
MidMarket Session on Tuesday
M&A Social Networking Lunch/Track
Analyst Keynote on Wednesday

A 4G future it should come as no surprise that your wireless future will be 4G but how does a company leverage all the opportunities this new standard allows? Well of course by participating in the 4GWE conference where you can learn how to solve picocell issues, deal with backhaul challenges and more. Be sure to come to room 4A and 4BC where this conference will take place and learn more. As part of this event you will also get to hear two awesome keynoters – Cameron Coursey of AT&T as well as Charles Jolley the CEO of Strobe. Here is a link to part of a past keynote Jolly did at the TMC DevCon5 event in Manhattan a few weeks back. It was one of the best presentations we had at the show.

Billions of M2M devices Yes, as amazing as it sounds there will be billions of machine-to-machine devices from tablets to sensors to appliances. Yes, your refrigerator and washing machine will be connected to the network allowing them to utilize power when it costs less and moreover making the world a more efficient place. Opportunity in M2M abounds – witness my recent pieces on Sprint and OnAsset. Life often imitates musical chairs – and if you aren’t quick, you lose. Come to M2M Evolution Tuesday September 13^th through Thursday, September 15^th in room 5B to learn more about the industry.

MSPs are the cloud Recently a managed service provider I was speaking with said his company was the cloud. Of course this sounds a bit silly but he had a point – and that is, without a network of cloud-based providers supplying backup services, payroll, email, collaboration and other apps – the cloud would not only be boring but not as profitable. Leave it to MSPs to act as the glue that makes all the really cool cloud-based apps stick. Come learn more at MSP World Tues-Wed, Sept 13-14^th.

Without the channel, where are we? Starting up companies which make great products is sometimes the easy part of the equation. The tough part is finding a channel to market – a set of resellers who can hold the hands of your customers and walk them though a more complex sale. There is no better place for the channel to gather than at Channel Vision Expo or CVx Wed-Thurs Sept 14-15^th, located on the show floor.

Customers are tweeting and facebooking, are you listening? Social CRM Expo is an event I decided the world needed because to be honest there are so many ways customers can complain and comment regarding your company that if you aren’t engaging prospects and customers in near real-time you risk major reputational and potentially financial damage. Social CRM is the discipline which brings together the art of listening to what customers are saying and engaging them to ensure problems are resolved quickly and your company’s reputation is as good as it can be. Social CRM Expo is the place to be to learn all about it Tues-Wed Sept 13-14^th in room 8A.

Be sure to check TMCnet for the latest on Telecom reseller week – an event all resellers should be particicpating in and of course Avaya has a great event on Monday, Sept 12 at 7:00 PM called Technology on Tap which will explore how the workplace needs to evolve to handle the millennial generation. Oh great, now we need to tweet these kids to get them to do something we want. :)

It should be really great – like all the past Avaya events they have always included great drinks, food and course objective information.

I really can’t wait to see you all at the show – it should be the best one ever. Please register now if you haven’t – and keep in mind you may need to register for multiple conferences if you have interest in their sessions.

Will AT&T, T-Mobile Merger Slow Wireless Innovation?

2011-07-25T18:46:59Z

AT&T has done an incredible job of getting special interest group after group to endorse its merger with T-Mobile, saying it will provide better broadband access for minorities, rural subscribers and just about any group of people you can think of. The broader gay community too has endorsed the merger - apparently transgender-Americans have been hoping for the day when there was one less GSM provider to choose from.

Here is how the system works - AT&T has hundreds of thousands of workers and inevitably large numbers of them in myriad groups. This in turn coupled with large contributions to various organizations and associations is rewarded with the reciprocal endorsing of anything AT&T requests.

To help grease the wheels even further, AT&T has further upped its lobbying budget by 58% according to PC Magazine.

AT&T is doing the smart thing by getting rid of its sole GSM provider allowing it better negotiating leverage in its roaming agreements with foreign carriers and gaining the ability to raise rates with one less major competitor to depress market pricing. It will also gain more leverage when negotiating with hardware and software companies.

An anti-merger video by the Free Press Action Fund

If the US government blocks the deal it will be because the remaining major companies AT&T and Verizon will have so much share that they are effectively a duopoly at about 80% - allowing them to raise prices at will.

Again, if you are an AT&T or Verizon shareholder, you likely want this merger to happen and AT&T is serving its short-term shareholders well by seeking this transaction.

But the challenge I see is that with one less major telecom carrier in the US it becomes that much more difficult for innovative start-ups to launch, get funding and hold their breath long enough for a carrier to buy from them. Sprint and T-Mobile have been fairly aggressive working with smaller companies that provide FMC solutions for example and because of this, funding has flowed into a bunch of companies serving the needs of the telcos. To make matters worse, Alcatel-Lucent has struggled for years to make money in this new landscape of shrinking carriers and NSN is really having problems making profit. Moreover, Nortel well bankrupt largely because of a single wireless contract it missed out on so obviously the challenge here is for the telecom hardware and software ecosystem as a whole.

So with less competition there will be less need to innovate and subsequently telecom equipment providers will have more trouble making money, getting funded and spending on R&D. This in-turn will cause a negative feedback loop where there are less companies innovating and Verizon, AT&T and a host of other carriers have less advanced services to offer. This in turn will eventually reduce revenues for carriers.

But this outcome will take a while to happen because investors aren't thinking about these issues, they are still licking their lips trying to take part in a telecom deal like the one where Skype sold to Microsoft for $8.5B.

AT&T should know these dangers and they probably do - but it is possible they are giving up on services. After all, IMS was supposed to unleash a wave of new applications and the carriers were going to share in the profit. Well the the app store quickly brought an end to that hope.

But then again, Verizon CEO Lowell McAdam is set on bringing what he calls the innovation from wireless, into the wireline side of the business. But if Verizon really wants an environemnt where there is lots of innovation, one would imagine it would be very vocal in opposing the AT&T, T-Mobile deal. To date they haven't said much.

So for AT&T, Verizon and a host of other larger carriers in the global market, this merger could make it more difficult for them to find the next killer service like SMS. But then again, if you own one of the two major wireless superhighways, you may not have to offer anything in exchange for increasing your toll prices.

Is AT&T Using Investment Angle to Silence Blumenthal?

2011-03-25T17:35:04Z

One thing you have to give AT&T a tremendous amount of credit for is knowing how to work the regulatory system - legal, financial and lobbying to get deals done. They are absolute masters and off the record I hear amazing things about just how connected they are. And they will likely need to pull on all the strings they have access to in order to make the T-Mobile acquisition happen.

So realizing the US is a Republic made up of 50 states, the company has now begun working on public opinion in individual states. Consider that today alone the company has put out two releases regarding their building of what they call the most advanced mobile broadband experience in Cincinnati and Connecticut.

In boilerplate press releases where a few items are changed, the company explains that in the greater Cincinnati area it is going to install 10 new cell sites, add spectrum carriers to 35 cell sites, enhance backhaul to 100 cell sites to enable 4G and deploy a distributed antenna system at the Great American Ball Park and Paul Brown Stadium to enhance network coverage during events. In Connecticut, the company said it will deploy enhanced backhaul connections to approximately 750 cell sites to enable 4G, install about 15 new cell sites, add spectrum to 500 cell sites to support more traffic and deploy a new distributed antenna system at Hartford's premier sports and entertainment arena.

Of special note is this part of the release which is made by the president of AT&T in the respective states or Tom Pelto in Ohio and Rodney Smith in Connecticut.

"Our story is getting even better for Connecticut," [insert president name here] said. "Our recently announced agreement to acquire T-Mobile USA represents a great deal for customers and a major commitment to strengthen and expand our network. In fact, this deal, if approved, means that we'll be able to expand the next generation of mobile broadband – 4G LTE – from our current plan of 80 percent of the U.S. population to 95 percent."

[President name goes here] said the T-Mobile acquisition provides a fast, efficient and certain solution to the impending wireless exhaust situation facing both companies while adding cell towers. Additional towers mean additional capacity which means fewer dropped calls. "We'll be able to provide better voice quality and data performance to our customers," said [you get the idea].

Notice the connection between investing and allowing the acquisition to go through and increasing 4G speeds throughout the country.

It is worth pointing out however that AT&T has to invest all this money in upgrading its network as its reputation as being not able to support phone calls on its phones needs to be overcome. However, having said that – and as critical as I have been about the company – my new iPad 2 which should arrive soon was ordered with AT&T as opposed to Verizon as the network is indeed quite quick these days and I am a happy AT&T data customer.

But getting back to press releases – why mention Connecticut and Cincinnati first? After all in Connecticut we are a bunch of boring bankers and a relatively small state without much clout when compared to New York or California. Perhaps this is an alphabetical thing where they skipped Alabama – in this case we can expect California or Colorado to be next?

Hmm, It could be a coincidence but two days ago Connecticut Senator Richard Blumenthal used the antitrust word in connection with the AT&T acquisition of T-Mobile.

Now I am not saying there is a connection here – but hey, we are talking about Connecticut. I can’t think of another reason why our little state would be chosen to as the second one and why the news came so closely on the heels of the Senator’s concerns.

This is a very smart move by AT&T but perhaps a little more transparent than they hoped for.

To keep up with the latest in the communications regulatory environment be sure to attend the Regulatory 2.0 Workshop hosted by Hosted by Pillsbury Shaw Pitman, April 12th, 2011 in Washington, DC.

What AT&T Purchase of T-Mobile Means

2011-03-20T21:26:26Z

Today, AT&T announced it was purchasing T-Mobile from Deutsche Telecom generating a combined entity with 130 million wireless subscribers producing $72.2B per year in revenue. While AT&T had an exclusive contract with Apple to sell iPads and iPhones it could rely on organic growth but now that Cupertino decided polygamy was more lucrative and Google’s Android is unleashing a torrent of cool devices on all networks, the challenge for carriers is to figure out how to compete effectively in a world where differentiating based on device is more difficult.

iPhone and AT&T’s Network Quality Perception

AT&T took a beating while being the exclusive home of the iPhone and was ridiculed on programs from The Daily Show to Saturday Night Live for selling device which couldn’t effectively make phone calls. So in order to combat this perception the company is spending $39B to purchase T-Mobile and by doing so expand its reach by 46.5M Americans meaning it can reach 95% of the population or about 294M people. In theory this move means less dropped calls for all AT&T customers.

EBITDA-Based Rationale

For a number of years AT&T was in the driver’s seat as the exclusive US carrier of Apple phones and during that time it was able to generate more revenue and profit per subscriber as it didn’t have to compete so much on price like T-Mobile and Sprint. This is why postpaid customers (those who pay the bill after they receive it in the email) pay AT&T $62.57 per month while over at T-Mobile the number is lower at $52. More telling is the fact that the EBITDA margin at AT&T is 40.7% as opposed to 29.2% at T-Mobile meaning we have two companies which don’t have the best network quality reputations and who provide commoditized services and one makes more than 33% profit than the other.

From AT&T’s standpoint the timing couldn’t be better as the company has had years to weaken T-Mobile as a competitor while maximizing its own share price in the process. To maintain momentum, it purchases a carrier with the same network technology – GSM meaning minimal disruption in terms of jerry-rigging disparate wireless technologies.

The hope for AT&T is the combined network will improve the image of either network individually by increasing coverage area and decreasing dropped calls. This in turn will theoretically help keep churn low – currently at T-Mobile this number is 3.4% while at AT&T the number is far lower at 1.31%

The Future of Communications and Competition

The money in the communications space is certainly in the wireless market and the top priorities at Verizon and AT&T are well-known to be wireless, wireless and more wireless. And this in turn means that traditional broadband providers such as those in the cable space need to find a way to have an effective wireless strategy.

This move makes the position of the entire cable market and other broadband providers that much worse. There is one less wireless asset available at a reasonable valuation.

And for AT&T, their solidified position will allow them to sleep more comfortably at night while they do their best to hold onto their customers as they consider switching to Verizon when their contracts end.

Just How Fast is Wireless Growing?

To give you an idea of how fast the wireless market is growing consider that AT&T believes total data volumes will increase 8x-10x over the next five years after growing 8,000% in the past four years. The reasons are obvious but AT&T does spell them out – cloud, LTE, 4G, accelerating app explosion, connected devices, M2M, mobile business, remote health monitoring and more.

Will it Be Allowed?

If the alarm bells didn’t sound before you heard about AT&T gaining more marketshare, after reading its own documentation supporting the deal you would walk away confused. Typically when I get ahold of documents touting synergies in an acquisition they drone on endlessly about how good the deal will be for the purchasers and customers. They never mention how good the competition is.

But in AT&T’s case there are entire slides dedicated to the competition and how good they are and how much potential they have to be strong competitors. In fact 11 slides out of 28 (PDF) talking about the deal are dedicated to how much competition there is and how strong the competitors are. It is a preemptive strike against those who will cry foul and say this deal should be stopped on the grounds of it being anti-competitive.

For example on one slide (PDF) it details all the competitors and how great they are – for example, Sprint/Clearwire is in the number one spectrum position and LightSquared expects to cover 260M people with its wireless network. Another slide (PDF) details how in many major cities such as New York, Los Angeles, Miami and others, there are currently five or six wireless service providers.

No More Spectrum?

Perhaps a bigger concern here is where the additional spectrum will come from. I spoke about this problem recently with former FCC Chairman Kevin Martin before his keynote in January at ITEXPO and he mentioned there is no simple answer to the problem. AT&T acknowledges the problem (PDF) as well and says both it and T-Mobile are facing impending spectrum exhaust challenges in NYC and other major markets. The chart below details which carriers hold what amount of spectrum.

The combined company should be better able to weather short-term spectrum challenges and in fact the map below shows how the combined company will be rolling out 4G to larger parts of Texas for example.

Conclusion

AT&T has certainly been successful at merging dozens of companies with a high level of smoothness and obviously their bending to the will of Steve Jobs to get the iPhone exclusive showed they were more forward-thinking than Verizon at the time. For T-Mobile employees and customers this move is a good one as they can now upgrade to Apple and other AT&T products without having to deal with switching carriers. For existing AT&T customers this move is good as they will have increased coverage and theoretically faster performance.

From a carrier investment perspective this move is a plus as there is one less weak carrier to slash prices meaning there is more predictable ROI on the multibillion dollar investments which must be made.

For the competitive environment this isn’t a plus. It seems all broadband providers will need a wireless offering of some kind in the future and there is one less wireless carrier to purchase as of today.

Like any other acquisition there will be many winners and losers but it seems AT&T made a very smart move here as they look to take advantage of the booming wireless and forthcoming 4G space.

To keep up with the latest in the communications regulatory environment be sure to attend the Regulatory 2.0 Workshop hosted by Hosted by Pillsbury Shaw Pitman, April 12th, 2011 in Washington, DC.

Sprint Doing Better But Challenges Loom

2011-02-11T16:12:17Z

Sprint added 58,000 net subscribers in its latest quarter ahead of estimates but is still losing money and now must contend with the Verizon iPhone. Beecher Tuttle has the details on TMCnet. The new challenges for Sprint are twofold.

You can now get an iPhone to work anywhere in the US where Sprint service is strong. Every carrier has some pockets of strength. The basement of Grand Central Station for example is one place where AT&T works very well and Verizon doesn't work at all. In fact, AT&T does fairly well on the train from New York up to Boston.

So for those users on the Sprint network who want the iPhone but don't want to sacrifice the solid connections in their geography, they now have the ability to utilize the Verizon or AT&T networks.

The second challenge is competition between AT&T and Verizon will make both carriers sweeten their offers to attract and/or retain customers. Basically, AT&T's network has become commoditized overnight. How bad is the war between the two major carriers becoming? Well Jason D. O'Grady at ZDNet calls AT&T's latest set of offers groveling and desperate!

But isn't that a good thing? I think it is - for consumers anyway.

Still, the challenge for Sprint is now bigger than ever and the rise of 4G networks from all major US carriers makes it tougher for Sprint to tout its new network as a differentiator.

If Super WiFi is A Dream, At Least I'm in Good Company

2011-01-27T21:17:15Z

Updated Jan 27, 2011, 8:01 pm EST.

It’s no secret that both Microsoft and Google are looking at white spaces and Super WiFi as an area of growth allowing inexpensive broadband wireless signals to be transmitted over long distances.

But technology is difficult to predict – we didn’t know for sure tablets were going to cannibalize PC sales but they are and we didn’t know small, cheap hard drives were going to cut the legs out from the large, expensive hard drive market. You may know that in 1997 when I went to COMDEX and told the world TMC was going to launch a magazine called Internet Telephony – people laughed and told me it wasn’t an industry.

Ten years later after a few “overhype” phases, VoIP software maker Skype has devastated the long-distance market and is hiring by the hundred.

The point is technology does what it does – sometimes it transforms markets and other times it gives us massive bubbles of hype.

Still, as I sit here in TMC headquarters – at River Park in Norwalk… A building which is also headquarters to Priceline, I can’t think of how many times people told me Internet travel was doomed. Yet, the name your own price for travel company has a market cap of $24.5B prompting me to even call it's success revenge of the dotcom. Ecommerce was also supposed to be overhyped – but look at Amazon. Netflix was supposed to be overhyped and it is now worth $11B and even moved the markets substantially today and popped 15% or $27.84 per share as of this writing.

Point being, we don’t know what the next big thing is – but we do know that if we can find a way to take existing wireless spectrum which is unused and utilize it cost-effectively, we shatter the price/performance curve of broadband wireless and we turn pricing, investment and the wireless market as a whole on its head. And if this doesn’t scare incumbents, they aren’t breathing.

This gets us to an article written by Lynette Luna at Fierce Broadband Wireless titled White-space: Is super WiFi just a dream? in which she says the Super WiFi market is overhyped and that it is unlikely that it will ever live up to its promise. She does end the piece by saying this:

However, one can look back at the WiFi market in its early years and conclude that wasn't going to be much of a market either.

This was a smart move – because she now stands on both sides of the fence. No one can accuse her of taking sides but it is interesting that there are so many technologies which were “overhyped” and the people who sat out on the new markets ended up later closing down their companies or selling at fire-sale prices.

More intriguing is the fact I am only aware of a single event in this overhyped space. One would imagine a slew of conferences to keep pace with the inflated expectations. Next week collocated with ITEXPO is the world’s first Super WiFi Summit. The interesting thing about this event is that my company, TMC partnered with Carl Ford and the Crossfire Media team to host the conference. If you remember, Carl worked with Jeff Pulver back in the day to launch and run the very successful VON shows which also started out at a time when VoIP went from being a niche market to hyped to what many called overhyped.

In a way, I see Super WiFi as similar to VoIP as it should allow any company to develop technology which disintermediates incumbents.

I asked Carl for his comments on the above-referenced article and he pointed out that ATM was a technology which was also overhyped. He then went on to refer to communications legend Tom Evslin who has pointed out that if you can do so much with the poor spectrum allocated to WiFi, imagine what you can do with white space. Moreover, Ford continued by saying white spaces may be integral in the roll out of 5G according to his discussions with FCC representatives.

In the nineties, it would be crazy to think that Ford, Pulver or I knew exactly what would happen to the IP communications space and that the market would see a few bubbles burst before a massive multibillion dollar market would be born.

Likewise with Super WiFi – I am not 100% sure it will be the future of wireless but I realize the absolutely massive potential to transmit wireless broadband over unused frequencies is staggering and an entire market for chips, devices and resale of this spectrum could open up overnight.

And with a slew people who already disrupted at least once in their careers using VoIP taking time from their busy schedules to participate in the conference, can you afford not to take it seriously? Keynote speaker Jeff Ford for example is now CEO of Apriva but he was one of the original VoIP disruptors at Inter-Tel’s global wholesale division in the nineties. Brough Turner is now the founder of netBlazr but he was the CTO of NMS when they created one of the world’s first Internet telephony gateways in the nineties. Mary Evslin was VP of Marketing at ITXC – another early Internet telephony carrier disruptor.

Then there are the really big names in wireless who are participating. Bob Friday from Cisco is Dir. Strategic Initiatives & Business Development of the Wireless Networking Business Unit, Rick Whitt is the Washington Telecom and Media Counsel at Google, Akshay Sharma from Gartner Dataquest and Todd Rowley the VP of 4G at Sprint.

I could go on but suffice it to say, if I am about to walk into the world’s first event on an over-hyped technology, I’d want to be in the company of all of these people.

Perhaps the best way to end this post is with a comment from Carl who says:

The article from Lynnette Luna reflects the concerns of some in the legacy world. Lynette, here is an open invitation to come and see the innovators at Super WiFi Summit yourself so you can judge where the market is going after talking to the experts.

-50F With Wind Chill. Escape to ITEXPO in Miami

2011-01-24T20:01:54Z

You know I would never stoop to reminding you about the weather to persuade you to attend what I believe to the be the best tech and telecom conference in the world - OK, maybe I would.

So I was driving along this morning on the way to work and noticed I couldn't feel any of my fingers. I decided to check to make sure I was wearing gloves. I was. Then I realized I couldn't feel any of my toes and yes I had shoes on.

I then looked at the temperature reading and it said one degree. I decided to risk my life to take the picture above while driving - I could have pulled over but hey, I was late for my first meeting and I would do just about anything for you, my faithful reader. Attention law enforcement professionals - some elements of this blog post may have been overly sensationalized in order to provide dramatic effect.

But getting back to Connecticut where TMC is based - one coworker who lives in Danbury, CT said it was -11 degrees when she left her house this morning. And that's nothing. If you can believe it... CBS News reports temperatures with wind chill hit as cold as -50 degrees F!

BTW, in AP biology back in high school we learned that -40F is the same temperature as -40C - this little bit of trivia courtesy of Mrs. Beers my 11th grade teacher. Hope I spelled her name right.

Oh, but back to the point of this meandering post... It is freezing out. There is one show in Miami next week where you can go to network with those who matter in the world of tech and telecom. Almost forgot to mention it is called ITEXPO East 2011. Every important topic is to be discussed from super WiFi to SIP to open source to virtualization and cloud computing. It is all there - in Miami under a single roof where you will also get to hear keynotes from former FCC Chairman Kevin Martin as well as executives from BT, Adobe, Aculab, GENBAND and Digium - the creators of Asterisk. Its the only industry event with a networking party at Mangos, one of the hottest spots on South Beach. Yes, there are other places to network as well.

So I hope to see you there and I look forward to greeting you in person.

Here is the ITEXPO show site, collocated events, free workshops, exhibitor list and giveaways you can win such as a new Jeep.