Recently in economy Category

There are only 3 RBOC's left: AT&T, Verizon and Qwest. In the new Fortune 500 listing, telecom has 21 companies listed. The top 2: Ma and Pa Bell. AT&T has revenue of $124B. VZ is $97B. Profit for AT&T is $12.9B, and only $6.4B for VZ. I say only because the profit is half that of AT&T. I guess building out FiOS and buying Alltel costs a few bucks. And I bet it adds a huge amount of debt. Factor in the LTE buildout (after the 2.5G and 3G upgrades) along with rumor that VZ wants to buy out Vodafone's 45% stake in Verizon Wireless. I guess the New England landline sale to Fairpoint only gave them a tax credit and less debt, no real profit.

Notice that Sprint is # 3 on the F500 list but lost $2.8B on $35B.

Qwest is #6 after Comcast and DirecTV! Qwest's $13.5 billion in revenue result in less than $1B in profit -- just $681M.  But they did better than Charter which lost $2.5B; Virgin Media that lost $1.7B; and Cablevision which lost $228M on $7.2B.

We'll see how the pricing and marketing pressure affects these numbers in three quarters.

CircleID has the story of ILECs and Cable companies once again fighting municipalities, like BellSouth and Cox fought LUS.

With President Obama determined to promote the development of open network telecommunications and smart grid networks we can expect the incumbents to step up their legal battles to stop this from happening.

In relation to the recent $7 billion stimulus package AT&T made a statement that it didn't need the money, but that it would launch a defensive campaign against any competitors using the money to encroach on its territory.

To me, it's anti-American for the Duopoly to fight the city. It's more taxpayer money that could be used for something useful that gets used to fight against two enemies of progress and innovation. Should Lafayette taxpayers have had to spend $500,000 in fees to fight the Duopoly?

There is case after case where the city or town with broadband including FTTB (fiber-to-the-business) has created jobs and added tax base while increasing home values. When the duopoly sues to stop broadband deployment, while crying that it is unfair competition, look at the profit statements of these companies. And look at what it is costing your community.

AT&T has a strange website up called AT&T Investing in America.  Adweek has an article about the campaign around the website.

The website invites Americans to share their inspiring stories. "As a member of corporate America, we share in the responsibility to help America through today's economic challenges by investing in areas -- such as AT&T's broadband infrastructure, clean energy, and our communities -- that will again promote economic growth and prosperity," said AT&T rep Jenny Bridges.

When Sprint chose Dan Hesse to be CEO in 2007, I was against it. He was a Bell-head who had huge opportunity at Embarq that he wasted. What do I mean? Sprint announced its intention to spin-off its wireline business into a separate company at the end of 2005. Dan Hesse was named CEO a full five months before Embarq was formed in May of 2006. Plus any new CEO has 4 to 6 months of a honeymoon period. Hesse had at least 9 months to come up with a plan to do something with Embarq, and did nothing. He cost cut, laid people off, and litigated with the pensioners. That's wonderful.

Then Sprint gets into trouble and brings Hesse  back as CEO of Sprint-Nextel. WHAT? So he lays off tons of folks. Maybe cuts some costs, but does NOTHING remarkable. In fact, since Hesse became Sprint's leader in late 2007, the company has gone on to lose 4.6M customers.

Did Sprint get the iPhone? No. The Android phone? No. Any new and exciting handset? No. WHy not? Handsets drive sales in mobility.

Do people realize that Sprint still has a fiber network? Not even the folks at Sprint can talk about their MPLS or IP offerings for more than 22 minutes without jumping back to the not-so-shiny gadgets.

Remember when Sprint used to try stuff? The pin-drop ads because they had the first all fiber network. The failed ION project. But still they tried.

Now we see that Hesse raked in $15.5M in compensation in 2008. Let's recap:

• stock lost 70% of its value in 2008
• company wrote off billions
• lost $2.8B
• people thought it would go into bankruptcy.
• CEO gets $2.6M bonus on top of his $1.2M salary

This is what's wrong with Corporate America and the Boards of Directors! You wonder why Main Street is fed up. Why consumers don't want to feed the beast any more. Why would I want to spend any more money with Sprint if its all going into the CEO's pocket? And I have to assume that the Directors and other Executives also pocketed some healthy bonus money as well. What a joke.

Ars technica doesn't believe the articles in CNET and AOL-Tech about people switching back to dial-up. Well, info from dial-up aggregators indicate that dial-up is on the uptick. As some angry comments mention not everyone needs broadband.

Last year we saw the plateau of broadband subscriber numbers. This year we are seeing an increase in dial-up maybe due to the economic situation we face in the US. Certainly, AOL, Earthlink and United Online are showing revenue increases in their financial statements.

If there was a 10% drop of broadband, would that affect VoIP? Unlikely. It would affect Vonage and 8x8 and other stand-alone VoIP players, but it wouldn't have any effect on the Business VoIP businesses nor on SAAS.

Also, bundling means that the consumer probably doesn't know the pricing of the high speed internet component.

Certainly this has to be a consideration for the RUS and NTIA. What if everyone who wants to live online has broadband? What if the $7B results in just a 10% increase in broadband? Will that justify the $7B? Maybe. If the 10% are all business ventures of one kind or another - eBay, Amazon, affiliates, SOHO, freelancers, tele-workers. 

In an article in Tulsa World, Level3 CEO Jim Crowe, Vice Chairman Miller, CLO Stortz, and CFO Patel all sold shares of Level3 for about $0.70.  Each still holds over a million shares. (Crowe owns 8.9M shares).

USA Today has the latest business travel trends. While it looks like prices are dropping, in fact, it's only the base airfare ticket price that is dropping. With all ancillary fees airlines add, you are likely paying more for your ticket - and according to what I hear at airports, your final ticket price is unknown until you get home and add it all up.

Airlines are cutting schedules which means we are back to bumping on flights (as I saw in Vegas). Also, if you get bumped or miss a flight, see you tomorrow. Not as many flights.

It's all about the airlines at this point. Customers are nothing more than a body to suck revenue off.

Hotels are learning from airlines. USA Today says that they will start eliminating amenities like fruit in the lobby, newspapers, and shampoo. Great. I hate the nickel and dime mentality.

The USA Today also writes, "Meetings are another casualty of the economic downturn. A recent survey conducted by Meeting Planners International and American Express indicated 7% of 2009 meetings had already been canceled, and meeting attendance is expected to be down by 5%."  I'm not sure about that. There are more conferences then ever before on my horizon. Many are smaller and niche but the number is growing. And I haven't seen a decline in attendance either.  Good time to book holidays though!

This was in my email inbox today:

Airband has decided to move in a direction which doesn't require Channel Managers. In this economy, tough decisions have to be made, in an effort to reduce SG&A expenses I will no longer be employed with Airband. Airband has an awesome product, granted it appears Airband is on the "bleeding edge" of the WiMAX space. They are attempting to get the processes in place to make the bleeding edge comment disappear. I am sure you will be contacted and served possibly by Direct Sales. I trust you will give them assistance in learning how we, Agents, conduct business.

Correction written here. (It was just a re-alignment of the channel).

Arnold Schwarzenegger was on ABC's Sunday morning news with George. he had the best analogy I have heard:

As a patient, when the oncology team diagnoses you with cancer, you want a unified solution, not a bunch of doctors arguing over the best treatment for you.

This is what we have now: party politics. No one in DC seems to get that it's one country and we fail or succeed together. Disagree if you must but show us an alternative plan.

The other problem is that most people in DC don't know much about economics or business. So they probably shouldn't be telling anyone how to run their business. (Balance a budget and look past your next fundraiser and I might change my mind).

That being said I have been at 3 shows this year so far. It seems that SMB (under 250 employees) is still doing business. And maybe if the media would stop the gloom and doom, the rest of America could unpucker and start doing business again too.

What Got You Here Won't Get You There

SUTUS, the maker's of the Business Central 200 office-in-a-box, have announced inter-operability with Excel SIP Trunking.  The real news for the marketplace is that Excel and SUTUS (along with Polycom) are bundling a system for small business.

The Business Central 200 is developed specifically for businesses of up to 25 employees, Sutus Business Central™ comprises a wide array of advanced telephony, data and networking functions. It includes a business-class phone system, file server, email server, router, firewall, wireless access point, VPN remote access server, and automated backups. It has the ability to simultaneously support both standard phone line and VoIP connections and comes with an array of business productivity features. Now VARs can get the office-in-a-box at almost no cost with a SIP bundle from Excel.

The interoperability allows resellers to provide their small business customers with a guaranteed low cost, reliable and full-featured IT and telephony bundle that is unmatched in the market.  It also allows the channel to better service small businesses due to the Business Central's advanced built-in remote support features. Tech support that would previously have required a truck roll can now be handled remotely by basic support staff.

Steve Weltner, Director Product Development at Excel, is excited about Excel's new SIPpbx Equipment Upgrade Program. He comments, "affordability is a non-factor as the device ends up being virtually free."

"With economic tough times facing everyone there has never been a time where pricing and simplicity have been more important," said Shawn Chute Executive Vice President of Sutus, "Excel and Sutus have come together to deliver on both these fronts, providing the small business customer and the channel that services them with an affordable, comprehensive and straight forward communications and IT bundle. One price, one solution, one contact point, we have made it as simple as it can be to subscribe to a fully integrated solution."

For resellers interested in this Sutus Excel program please contact Sutus at www.sutus.com or 778-371-5286. You may also contact Steve Weltner Director of Marketing at Excel at 972-910-1763.