On Rad's Radar?

At ITEXPO East 2010, I sat down with Erik B. Levitt of Endstream Communications to find out what this wholesale VoIP Provider had plans for in 2010. Endstream is a domestic inter-connection carrier wholesaling VoIP minutes. It acquired a small residential VoIP player. It is in-process for CLEC status in five states.

Endstream is rolling out Residential VoIP and On-Net video services. Its network is video enabled, which may lead to a Video Talk plan. Integrated video bridging allows the company to offer video calls to any phone number, regardless of endpoint compatibility.

Endstream has an active channel for its wholesale termination service.

It's hosted residential VoIP service is run on a Class 5 switch. It is a wholesale product. LRN is coming csoon. LNP, E-911, CNAM, LIDB and unlimited local dialing are included in the residential DID product. The carrier can order online with automated set-up. (That helps Endstream scale it.) The customer will also need a Session Border Controller on premise, not unlike XO's Enterprise VoIP service. Endstream migrated to Sansay SBC's in 2009.

Levitt did tell me that his network has full T.38 support that guarantees the fax on the second try.

Endstream Comm. also supports HD Voice on-net, which neither Verizon nor AT&T support with their wholesale VoIP offerings.

Freeside Internet Services, Inc. is the company behind the open-source telecom billing system named Freeside. Peter Bowen was named President and CEO on January 1, 2010. Ivan Kohler steps down as president but remains as the chief architect for the software.

Bowen points out that open source is free like a puppy. Freeside is offered free for the download, but is also offered a couple of paid ways. (The Freemium model that Red Hat uses). One way is to hire Freeside for Set-Up. the customer gets a base install of the product and for a modest monthly charge can get monthly maintenance as well. The other way is for carriers to buy the complete, hosted solution from Freeside.

Of course, Freeside is more than just a billing system, it is a BSS. Freeside is an open-source billing, CRM, trouble ticketing and provisioning automation software for wired and wireless ISPs, VoIP, hosting, service and content providers and other online businesses.

BTW, the preferred database for Freeside is Postcrest, according to Bowen.

Bowen says that Freeside will integrate with Asterisk, Taqua and some other switches. Freeswitch integration is being explored.

The big piece for VoIP and CLEC customers is the texing issue. With over 9000 rate centers and local, county, state and federal taxes and fees (real fees not carrier initiated cost recovery fees I call profit), Bowen suggests that carriers buy the tax info from CCH or other company, then incorporate that tax data into the billing system.

One reason for the C-Level change, in my opinion, is that it's time for Freeside to stop worrying about the tech and go sell something. Consulting is hard to scale because it is trading hours for dollars - you eventually run out of hours in the week, which maxes out your revenue. On that path, Freeside is looking for VAR's and Integrators to help each other grow. The Integrators get another product line; Freeside gets a sales force and more sales.

Good luck, Peter!

Here's the video Peter Bowen did with TMC's Erik Linask

Mitel has signed an MVNO deal (TMC video) in order to maximize on its PBX business as it relates to the mobile workforce.  It's one thing to have an application that loads on some smartphones and will talk to the PBX. It's a whole other pool of thought to go make a deal with a cellco to resell their network so that your mobility piece of the PBX puzzle can be better integrated.

As expected, here's why I think this will fail:

• Most MVNO agreements end in flames - ESPN, Disney, Helio, Virgin Mobile. 
• The cellular pie is flattening, so how much room is there for another carrier.
• The current price feud between ATT and VZW means shrinking margins.
• Contracts, cool phones and fulfillment.

Mitel's Mobility play will encourage more minutes of use and more MB's of data -- all of which they have to pay for (like Cbeyond does) as a metered service. This will also eat into margins.

How do you get around the fact that most people are under a contract already for cell service? Or that many folks want their iPhone (or other cool, preferred handset)? How do they handle handset fulfillment? They could hire an MVNE (MVNO enabler) but that cuts into margin.

Finally there is billing. They haven't had to do billing - per minute, per MB billing. Reconcile wholesale billing from an ILEC! Horror let me tell you. And then bill the end user correctly. More margin out the window.

It does give Mitel an advantage over Shore-Tel and the rest of the hardware PBX services. But it's really only for the installed Mitel customers. It will help sell a few more deals, but I don't see it as a money maker.

I do see it as a way to pump up the news before an IPO though.

  The February South Florida Technology Association (SFTA) monthly meeting in Fort Lauderdale will bring together the leaders in the virtual server and storage cloud computing space. Panelists will include representatives from Dell, VM Ware, Cisco, and DataCore.

"There is a lot of excitement building up to the event and we expect a great crowd to attend, including local IT Directors and C level executives from some of the largest organizations in South Florida," writes Lenny Chesal, Chief Marketing Officer for the sponsor, Host.Net.

The meeting will be February 25 at 5:30 PM at the Fort Lauderdale Marriott North (6650 North Andrews Avenue, Fort Lauderdale, FL). Register here. 

"Get your head out of the virtual cloud", says Host.Net, a multi-national provider of network infrastructure services focusing on virtual private data center.

full disclosure: I've known Lenny for years.

Dave Rusin is the CEO of American Fiber Systems. He is a self-proclaimed fiber bigot. He has a two part blog post about the Special Access fight at the FCC. 

Dave may have his dockets confused. He calls it the Special Access docket at the FCC, but he is really ranting about the UNE docket. What's the difference?

The Special Access docket was started by Sprint and T-Mobile. It has to do with the Middle Mile. First off, Special Access circuits are tariffed. These circuits can be listed in a CLEC's Inter-Connect Agreement (ICA), but the pricing is either in the FCC filed tariff or it is listed in a Pricing Guide (for circuits like ATM and Frame Relay which the FCC unregulated in 2005). The FCC Tariff circuits are used to carry inter-LATA traffic - voice, data and Internet bandwidth. Sprint and T-Mobile buy Special Access / Middle Mile circuits to get traffic from cellular towers back to their own network. Enterprises purchase SA to get Internet bandwidth outside the MSA (metro areas). These circuits (the loops) are usually very expensive. It's why Internet Access in rural areas costs so much. The pinch is that the ILEC charge tariff rate to some customers, and sell a bundle of Internet Access to that region much cheaper than the loop and port cost in the tariff. Hence, the rub.  These are dockets DA 09-2186 and GN Docket Nos. 09-47, 09-51, 09-137.  It's not just cellcos that are getting pinched, but ISP's and IOC's (the independent telco that are members of NTCA and NRTC). The Middle Mile problem was addressed in the broadband stimulus legislation. 

I think all these carriers want is fair pricing. They should pay what the carrier's other divisions pay for circuits. For instance, a Metro Ethernet 10MB circuit is $720 in the former BellSouth region, but you can buy AT&T DIA for $890 - that's loop and Internet.

This SA docket is different from the Cbeyond petition for reasonable wholesale access to MSO and ILEC copper, fiber and hybrid network (plant). (WC Docket No. 09-223). This docket is a plea from the CLEC's - Cbeyond, One Communications, Covad, et al (the COMPTEL crew) - for better wholesale rates on network elements (UNE) and to expand the UNE to fiber and hybrid systems, which they are excluded from currently.

This is the docket that Dave is ranting about, I think. Not the Special Access one. If you want to read my whole reply to his rant (and some CLEC therapy), read it here.

AT&T terminated the CallVantage service in November. Not only was porting the number out of CallVantage a challenge, but they continue to send me a bill for a service that they terminated!

I can't log in because the phone number is no longer with ATT. So I email for help. After 2 automated replies, I get this:

"Thank you for contacting AT&T regarding 813-XYZ-XYZZ. I do apologize for the inconvenience; unfortunately our Online Department will not be able to handle your request at this time. Our records indicate this telephone number is not an AT&T South East account number please contact your local service provider at 1-866-272-8252 for assistance.

Should you need further assistance or have other questions, please reply back to this e-mail and the AT&T Online Customer Care team will be happy to help you.

We do appreciate your business at AT&T and thank you for your email. It has truly been my goal to provide you with outstanding customer service and hope that you are very satisfied with the service I have provided you today. Sincerely, AT&T Online Customer Care&caseid=XYZ

Sure sounds like they care doesn't it? As I have said time and again, if they shifted their lobbying millions to customer care (REAL customer care) they wouldn't need to lobby.

Also, this adds evidence to my theory that BSS (the billing system) of the ILEC is actually a revenue source.

The guy who dragged me kicking and screaming into telecom in 1999 has sold his agency and gone to real estate. Usually isn't the transition the other way?

Sometimes being an agent is embarrassing. There's the whole discussion on Phone+ about Ethics in the Channel. When I first got in the channel in 1999, I wouldn't do business in Miami, because you had to buy the business. Agents would pay up to 90% of the commissions back to the customer (or the customer's wife) to get the business. 

Then there's the whole: I'm going with whoever gives me the most points. (I have blogged about something similar before). An agent today asked me for a VoIP provider. The question was not: What hosted VoIP provider would you want to work with? Nor was it: I am looking to work with a VoIP provider that is reliable and dependable. Who would you recommend? The question boiled down to who was paying the best commissions.

To me, that's dumb. I have been in the VoIP sector since 2004. (I was a beta tester for Primus' Lingo service). I have seen so many companies disappear. POOF! A cloud of smoke. 

There was a Tampa-based CLEC that offered exclusive agent contracts paying 22%. No agent I know ever collected. 

With all the channel changes and financial troubles of this industry, do you really think a sweetheart deal (20% with evergreen) is actually going to be met? 

I understand that SIP has more margin than TDM, but the truth is that VoIP has the same basic costs as TDM: LNP, 911, CNAM, SS7, softswitch, collocation, labor/payroll/benefits, taxes, trunking, bandwidth, equipment leasing, and origination and termination charges. So thinking that there is margin left for 20% to an agent - unless the agent was going to be doing marketing, sales and implementation - in which case they earned every penny. And that is a Partnership with a capital P. 

I have been complaining since 2006 about the fact that Partner is a misused word in the channel. I look for a win-win every time. I look at lifetime value of my client. I want referrals. I want my vendors to be healthy financially. 

Commission points is not what comes to mind when I'm thinking partner. In VoIP, especially in Hosted PBX sales, the onboarding process is the most important. By that I mean, the cut-over; the number porting; the extension mapping; and the whole provisioning and installation process. This is the customer's first experience with the carrier (and the agent maybe). It needs to be well handled and smooth. It requires project management. It demands frequent communication among the carrier, agent and client. This is way more important than an extra few points. Because the on-boarding experience predicates whether or not you get WOM (word-of-mouth) or referrals. (You can't blame it all on the carrier -- it's your recommendation). 

Well, those are my thoughts any way. What are yours? Leave a comment.

By the way, the TCA is finalizing a Code of Ethics for Channel Partners. Feedback would be greatly appreciated.

Comcast goes deep into trunking and Hosted VoIP with the purchase of New Global Telecom (NGT). NGT has had a few business models. It started out as a wholesaler, providing the back-end softswitch for companies like AT&T and New Zealand Telecom. It then started selling partitions on the Broadsoft. It dabbled in retail (if I recall correctly). Lately, it is in the white-label hosted VoIP business, including deals with American Broadband and NationsLine.

Comcast bought Cimco, a medium sized regional B2B CLEC last year. With the NGT purchase, it looks more and more like Comcast's VoIP (digital voice) strategy will be to target the heart of the ILEC margin in the B2B space. 

Landline revenues are already declining for ILEC's. I'm thinking that Windstream's purchase of Nuvox and Comcast's purchase of NGT means more competition in the SMB space for business voice services. It means less revenue for ILEC's.

Throw in Comcast's acquisition of NBC Universal - and the pressure is on, because the RBOC's have to buy content from their bigger competitor. How does that feel, Ivan? Randall? Now you know how all the ISP's felt all these years when you were selling them circuits at wholesale and retail was the same or lower. This will be interesting to watch. I may actual live to see the Bells topple under the weight of their own greed and lack of vision and innovation. When you only look at Wall Street, you miss your customers.

RingCentral has been selling their services via the affiliate marketing route for some time. LD.net built a big book of business through affiliate marketing. Now FreedomVoice has launched their affiliate network.

"The program offers affiliates the opportunity to sell three popular FreedomVOICE products: FreedomVOICE Toll Free Number Service (virtual phone system solution), FaxFreedom (an intuitive Internet faxing service), and AdTrakker (a real estate call capture system)."

Commission Junction is one of the portals for affiliate marketing. (Linkshare, Shareasale, Google and many more are affiliate platforms).

Why would a telecom provide use affiliate marketing programs? 

One reason is more feet on the street. RingCentral and Telarus get a lot of search engine results due to the share number of affiliates who write or blog about them.  More feet on the street theoretically leads to more sales. The other benefit is that the more websites that feature your product and marketing message, the better your search engine results will be. Sales and SERPs.

To be effective, the service provider has to provide marketing support in the form of banner ads, text links, landing pages, videos and marketing messaging.

BTW, I like the new logo from FreedomVoice.


full disclosure: FreedomVoice used to be a consulting client of mine.
 

Latisys is a VC backed data center solutions company. Latisys was formerly Managed Data Holdings, a company founded in 1994, that was transformed and renamed in 2007 by a group of venture capital firms.

Latisys is a leading provider of colocation, managed hosting, managed services and disaster recovery solutions. Latisys runs multiple SAS70 Type II certified data centers across the United States. I'm guessing that they compete with Savvis for customers and business.

Latisys just expanded data center space in the Greater Chicago area. And with that expansion they hired a rock star whose name is Theodore Wrzesinski. Theo was a superstar sales person at Yipes in the startup's hey day and just finished up a two year stint at Equinix. Go get 'em, Theo!

Screening candidates that send in resumes is a tedious task. I get to do that when my clients are hiring new salespeople. It's a time-consuming task. Really,  resumes don't mean anything because how many aren't embellished?

Anyway, at the 1st Startup Telephony Camp which Larry Lisser ran, we had a chance to hear from 4 start-ups - SayHired, Close Haul Communications, Fonolo, and Pebb.ly. 

So I know of a few companies looking for marketing, sales and channel people. One was inundated with over 300 resumes in 2 days. Ouch! What do you do with that as a time-strapped manager? Well, you can outsource it to SayHired who will help with the screening process.

Hiring is a multi-step process: place the ad, receive resumes, screen resumes, set up interviews, evaluate, interview again, re-evaluate, choose, hire, and on-board. No wonder it can cost a company as much as a year's salary to hire wrong. 

Screening is important in sales. You can automate some of it through SayHired. For example, if your comapny does a lot of tele-sales, the screening through SayHired will help you eliminate candidates that sound horrible on the phone. You can ask tougher - or more specific questions - to screen even further.

I don't know if SayHired will help you design the questions (probably will), but I can see for retail and sales positions will be their niche.

 

With all the iHype about the new Apple iPad - and all the disappointment with the new gadget - and all the jokes and subsequent lawsuit about the name - I think it might be time to rename ITEXPO, TMC's iEXPO.

If you saw all the attendees staring at their iPhone (mainly wondering why they couldn't get a signal!). And I think half the booth giveaways were an Apple i-gagdget. So I propose that we call it the iEXPO.

Noted: Moshe Maeir says we just need to call it the iTEXPO.

Jim Delis is leaving XO as Channel President. Rumor has it that he is heading to TW Cable. Tom Gorey returns to the Channel Chief position, reporting to Mike Toplisek, VP of Marketing.

In other XO news, "XO also is expanding its fiber network in Southern Texas by 800 miles, providing greater diverse long-haul routes to San Antonio and Houston through Laredo, McAllen, Harlingen, Corpus Christi and Victoria. The increased connectivity will expand domestic and international customer access to XO's Tier-1 IP backbone and 28,000 route-mile U.S. long-haul/metro network (1.2 million total-mile network)." [press release]

UPDATE on 2/2/2010: Brian Law will actually be taking over as XO's Channel Chief.

FTC full disclosure: I am a sub-agent for XO.

Why is it that everyone thinks that there are quick ways to make money? The only way to make quick money is to steal it. 

The new MLM scheme is Wow Mobile. Although the Wow reps state it is not a multi-level marketing plan. Really? Bring 3 friends and get a free cell phone for life? That doesn't sound like MLM?

Backed by Liberty International, it is supposedly an MVNO plan on T-Mobile offering the HTC Google phone. (Just $399.95). Those are pluses, but let's remember that no pure MVNO model has lasted yet. Not ESPN. Not Disney. Not Helio backed by hundreds of millions from EarthLink and SK Telecom. Not even Virgin Mobile, which Sprint bought for $483M last year, after Virgin acquired a limping Helio.

The nice thing is that Liberty International, based right here in Tampa Bay, has a bunch of products to make you $2000 per month: WiMax, VoIP, cellular, toll-free, long distance, dial-up, websites - almost every commodity available through an affiliate channel. But that's not all! You can also sell music, DVD's, body care, nutrition, and sales leads. Yes! You can buy sales leads from Liberty International - 500 for just $248.95!

"Liberty International has launched a new free cell phone service that is named WOW Mobile, to which is sure to wow! The WOW Mobile prices for each service are based on the service limitations. For $59.95 you can have access to unlimited calls to US. At $69.95 you get to enjoy unlimited call as well as unlimited texting. For $89.95 one gets unlimited any time calls to anywhere in the US, with unlimited texting and email and unlimited internet connectivity. As it comes with an inbuilt AIR card user can connect to wide area wireless Internet access without any difficulty." Seems like you could buy this same plan direct from T-Mobile and get a subsidized phone.

But then if you bring in 3 friends you get service for free. How? Why doesn't anyone ask HOW? But then if Americans could do math, the subprime mortgage mess wouldn't have happened.

The costs involved go beyond just the wholesale contract with T-Mobile and paying for bulk minutes, bulk SMS text messaging and data MB's. There is handset fulfillment - support, logistics, repair, and asset management - which we have just seen with the Nexus One is not Google's strong suit. Then there is billing, which by far is the biggest PITA for a service provider. With billing comes bad debt, credit card payments, and billing reconciliation with the carrier. Good luck with that. All of this while paying residuals to agents and giving free service away. Yep! Start the Death Watch on this one.