Jim Machi : Industry Insight
Jim Machi

August 2010

You are browsing the archive for August 2010.

Who is Really Benefiting from the Stimulus Packages?

August 25, 2010

In July, Rasmussen Reports indicated a US voter split between whether the economic stimulus packages helped or hurt the economy.   I was kind of split myself on that topic, but I now have a clear position.   Because when I think of economic stimulus packages, this is now what I think of.   Recently, I drove from New Jersey to Michigan, and then all the way to the top of Michigan and then back to NJ. I saw the roadway economic stimulus packages in action! I literally saw thousands of these reflective portable barriers during this trip - I snapped this picture somewhere in Pennsylvania, or was it Ohio. It doesn't really matter since these things are EVERYWHERE! Oh yeah, I saw about 10 workers too. I literally I saw just 10. So I think the real beneficiaries of these economic stimulus packages are whoever is making these barriers!   I did, however, see some results of the broadband stimulus package. In a remote part of Michigan, 5 of these 10 workers I saw were, I think, putting in fiber. Without any houses around for miles, we drove past a group of workers putting non-water carrying tubes into the ground and sticking wires through them. I'm guessing they were bringing broadband to the Sleeping Bear Sand Dunes. So there were at least some tangible results from that package.

The SIP Trunk and the Border Element, as Opposed to the SIP Trunk and the Border Elephant

August 18, 2010

Recently, I was asked by a customer about the benefits of SIP Trunking. Before I respond to this, it's important to understand that SIP Trunking will put a dent in the concept of a classic VoIP gateway. The SIP Trunk term refers to the connection to the enterprise - it's a SIP-based Trunk coming in as opposed to a PSTN (T1 or E1) trunk. The border element concept will remain, but converting from TDM to IP won't be necessary. It's more about IP to IP - an IP to IP gateway if you will, with mediation / security services. This is what I've been referring to as a border element for quite a few years. In other words, the classic VoIP gateway evolves to be a different kind of border element. If you want to read more, the TMC website has a Global Online Community dedicated to SIP Trunking.   So with that in mind, the benefits of SIP Trunking really relate to cost. First of all, assuming the enterprise already has internet access, then you already have the physical connection and you are already paying for this. There just has to be a software based provision for the "voice" trunk. In the end, you are really just utilizing the internet bandwidth more efficiently for both voice and data services. That's what it comes down to.     Additionally, it's probably also easier as an IT manager to upgrade the number of users you support as your business grows. Not as much hardware required. And ultimately, this will enable enhanced unified communications since all the traffic is coming over the same line.

Don't Wallpaper Your House, Wallpaper Your Mobile Phone

August 11, 2010

Some time ago, I was giving a talk about "Challenges and Opportunities in the Mobile Value Added Service Space." I was talking about the ARPU, CAPEX, OPEX and competition challenges operators are facing, but I also talked about the opportunities out there to differentiate and to innovative, particularly with video applications. One area I drilled into a little bit was offering "personalization" to the consumer, that is, offering ring tones, video ring tones, different kinds of applications, and potentially more customized services/payment plans that made sense to the consumer.   After the talk, someone came to speak to me about mobile phone wallpapers, which would be what you see on your screen when it's inactive. Yes, downloading a wallpaper would be another type of video service. Think about a music ring tone. You only hear that when you make or receive a call. With a wallpaper, you see that much more - in fact, every time you look at your phone.   Many people I know (right now, myself included) either go with the basic wallpaper that the phone offers, or put one of their pictures taken by the mobile device up on the screen.    But there is a substantial market for downloaded (i.e. paid for) wallpapers for the right price (similar to music ring tones). Yes, there are many free wallpapers but there are also wallpapers that people would be willing to pay for, such as wallpapers of famous paintings or wallpapers related to movies, or wallpapers that behave like screen savers, animated wallpapers, and wallpapers that update automatically with information.  If every video-enabled phone downloaded a wallpaper and paid $1.00 for it, wow, that's a market...

The Quest for Telco Growth

August 4, 2010

Last week I attended a webinar from the Yankee Group called "How Can the Telecom Industry Start Growing Again?" Sort of a provocative title which got my attention, and since I had the hour open, I attended. I'm glad I did.    Basically, their message was to be innovative, both in business model and services offered. This makes total sense. I would say common sense. I'm sure though, that some people view what Yankee had to say as very radical.   Some of you are probably aware that it's somewhat fashionable right now for the telcos to ascribe for a "Google Tax," that is, since there are over-the-top services that use the telcos broadband networks, these over-the-top services used the most should pay more, directly to the telco. The webinar was the first time I had seen some kind of analysis relating to if Google shared some kind of revenue, how much would it impact the telcos. Well, according to the webinar and Yankee's analysis, whether you are a wireline or wireless telco, not much! They didn't go into detail on their calculations and I'm sure some calculations will conclude that it indeed does make sense, but let's give Yankee the benefit of the doubt and say they know what they're doing here and the analysis is correct. Given how much ink has been spent on this topic, I was surprised!   Instead of asking Google to pay a tax though, why don't the telcos themselves move to say raise data rates of the users? If they're not getting enough money to support continued infrastructure growth, why not put a "tax" on the user of the "service" that demands new infrastructure? Simple steps have been taken by AT&T for instance with regards to mobile data plans and making them more dynamic - i.e. you go over a cap you pay more. Are they worried that if they raise the rates, that people wouldn't pay and would stop? Or they would all go to the lowest cost provider? In free agency and sports, the owners claim they're not making any money, yet they continue to dole out huge contracts to the players? So when the collective bargaining agreements come up, and the owners claim "poverty" it doesn't quite wash. This kind of flashes through my head when I hear things like a "Google tax" is required. More people are using the telcos bandwidth since the people want to get to the Internet, or get to Google, or get to the Apple iStore. The telcos are getting more money since they have more subscribers. The problem is the pricing models apparently aren't making sense from the supply and demand point of view.   Another way to be innovative in the business model, and one thing I didn't hear about in the webinar, is ad insertion. After all, the greatest free content, the TV, at one time exclusively lived off advertising and now with cable networks, partially lives off advertising and partially off of users' monthly fees. So how about for data users, do the business models evolve to include advertisements? We'd be innovating the business model as per the Yankee webinar, and we'd be moving to business models that made sense.
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