Recently in telecommunications Category

Telecomweb has an interesting set of stats:

Last year, U.S. wireless subscribers burned through 2.2 trillion minutes and 1 trillion worth of SMS. As such, mobile data accounts for 25 percent of a carrier's revenues, and all that from 270 million users.

Indeed these are huge numbers. No wonder AT&T says its a wireless company. TDM LD must be shrinking by the minute

Well, it is conference month with the industry gathering at CTIA and VoiceCon (and other shows). And when we get together we tend to gossip. The latest rumors (some thanks to Telecom Ramblings) involve XO, TWTC, and Qwest.

Apparently, Qwest longhaul business - the original Qwest - is for sale, but who has that kind of money to buy it? Likely, a foreign carrier would make a play for it. But Telefonica has a deal with Level3; T-Systems (DT) has a network here that T-Mobile utilizes; NTT has the Verio network; Telia also has some fiber routes in the US. Sprint can't come up with the $2B or so for the acquisition. Maybe Orange (FT) can. But isn't Global Crossing a better bang for the buck for these same prospective buyers?

Now that XO has converted all of its debt to preferred shares for Carl Icahn, speculation is if they will buy something or get bought. Now that tw telecom has showed a profit, maybe they will take a swing. After all, twt has the most on-net buildings and the 2nd most route miles (next to L3). (Thanks to Rob Powell for the data).

Level3 just borrowed some money - $200M+. But that's just for operating expenses according to analysts. And what could you buy for $200M? And if you are Level3, why would you buy another company? You still haven't finished teh ongoing integration issues.

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.

Amid phone calls with agents who are in a struggle over commission payments with carriers, I have been speaking with finance companies about telecom stocks. Lots of debt out there. Not really enough revenue to cover most debt.

The other problem I see is the operational issues that most telecom companies face. Just getting a quote out of most these companies is an ordeal. And the pricing is anything but standard. Two agents and a Direct will likely produce 3 separate quoted rates. WTH? And that's just to get a quote. Generating a contract, especially from the Death Star, can take up to 10 business days!!

One other discrepancy is that agent paperwork is usually more than a direct sales drones. We have to add a Letter of Agency (LOA), at the least, to show our permission to act on the client's behalf. We also usually have other paperwork - like credit applications - that directs get to skip. Why? No idea, but I have seen enough of it over the years.

So now we get the quote and the contracts. As the agent we explain why we need the LOA and that we won't be taking the client for a ride. We are the trusted advisor, right? Now with signatures and a mountain of paperwork, we submit the order. That's fun too. The order site crashes and saves no work. Start over. The email address doesn't auto-respond with a tracking number. (Re-submit. Re-submit. Call. UGH!)

Then we wait to hear if the order was accepted. Likely something on the paperwork will slow it up. Get that fixed requires being tricky or returning to the customer to explain how we missed a page or a signature or something. When we finally get a FOC date, we are half way there!

Last Ma Bell Internet T1 order, after the FOC date, no install because of address mismatch - over a suite number! One telco closet for the whole building and the address was the same as a DSL circuit and 3 phone lines that the RBOC was already billing to the disputed address.

In cases of fiber, there is usually customer premise make-read work to do. Likely, someone will be told what that work is but not any of the contacts on the paperwork. Even in the case of T1, conduit and other inside wiring issues could delay things.

So now we have the circuit installed. Just have to get it turned up. Tele-installs are great. One person reading from a script talking to the office manager. Eventually it works out.

My advice now is No Managed Router! Ma Bell has resorted to email only to make config changes on the router. No phone to call. One time the tech was in Raleigh. The second it was Singapore. Just to get NAT and DHCP turned on and the SIP phones to work.

The time versus compensation meter is tilting upside down. With rates sliding downward on every telecom service, commissions have too, which means agents are working harder in a broken system to make less money. And that's if you don't have any commission issues with the carrier, which every agent has. It's telecom for gosh sakes. Of course, there is commission errors. Billing errors too.  How did it get this broken?

At the Channel Partners Expo, on individual calls with agents, and on a conference call with a bunch of agents today, I noticed something big: the Channel is shifting.

I have known for a while that VAR's would replace the traditional telecom dialing-for-dollars, save-you-10% agents. It's coming because sales cycles are longer; the product set is very different; and it's all about IP and Apps. (Net-head versus Bell-head).

There's another shift happening: agents are banding together every way they can to get leverage against the carriers, who hold too much power. It started bubbling  in 2007 with my post called What's a Partner Worth? In the 2 years since that post, there hasn't been much change on the carrier side.

Agents first started bonding together as Master Agents. Then came the experiment called the Agent Alliance - a group of master agents banding together for group buying. I guess its a master master agency. None of those entities speaks for the agents.

"There is a serious disconnect between many agents and their suppliers on the expectations they have for each other in developing a mutually beneficial partnership," says PHONE+ Editor Khali Henderson. "Some of this may be a failure to recognize the changing dynamics in the telecom industry and their impacts on the participants in the value chain. Starting a formal dialog in the industry may help to overcome these gaps in understanding."

The dialog today starts when commissions aren't paid. You look at the situation for agents with MCI when Verizon bought them and changed the MCI Agent contract. Over 100 agents got screwed out of commission because the new contract was unfavorable or untenable. It happened with Cable & Wireless. Many mergers have had similar results for agents. 

I will have to say that most of these issues are contract related. The quotas and other issues are spelled out in the contract - IF you read and understand the fine print. If you use a Master Agent, you don't even get to see the fine print, because this Industry loves the NDA (non-disclosure agreement). It's why agents can't get a fair shake - they have no idea what is availble to negotiate. Cisco just lost in court with the judge declaring that Cisco's partner agreement was unconscionable, meaning that the contract is too one-sided. I think that if that precendent stands, agents will have a leg up.

I've been on the receiving end of a carrier (BellSouth) taking away a boatload of hard earned commissions, so I understand the frustration. (After 5 years, therapy, anger management classes, blogging and drinking, I can almost move past it). But at the end of the day, what band of agents has $1M to hire an attorney to fight a carrier over a contract dispute? That's what it would take. About $1M and a long time (7 years). What do you do in the mean time?

Not to be mean, but the industry is almost tipping over with bad debt, rising costs of goods, lower margins, and, let's face it, failing strategies. By that I mean, how many carriers have a solid long-term strategy?

[I deleted my FiOS is a losing strategy rant here]

Let's just say that I look at many CLEC's who are so obviously selling underwater that I want to take a SCUBA test. And it isn't just the Channel - the direct side is drowning in there too. In fact, the direct side is usually the one that starts the price war against the agent side. And where are the policies and guidelines in place for that Not to Occur?

Some carriers (like the ones on Moody's Death Watch list) may not be around in a year, so agents need to watch that to.  Agents need to be aware of how inter-connected the whole CLEC and Reseller market is. Reseller A buys from Carrier V and Reseller B and D, who buys from Carrier Q and Reseller A and D. When one collapses (like Alphared did recently), it cripples the rest. And there isn't enough margin - room - for that kind of error.

At the end of the day, the agents need to band together - to do more than swap tales of woe and vent - and that's why a bunch of us have put in many hours in the last year to create the Technology Channel Association. Join now! It's free through the end of March for agents and we offer group health insurance for our members.

Telecom is broken. I can't remember the last time an order went smooth. Well, wait, I can actually, it was a BellSouth Metro E. The REUC order center for BellSouth FCC circuits really knows how to work an order. For 10 years that group in Sunrise FL has been outstanding to work with. (The former DSG and the MEOC had some great people who made my life easy too. Those grooups are gone now).

This week just trying to get quotes has been a struggle, but the topper on the cake has been an Internet T1 install. It was delayed for weeks due to address mismatch -- not the street address, the suite number. (The customer was moving into a bigger office space in the same building). Eventually, I just submitted without a suite number.  On install, client was told that the tech would come back. Waited two days, no tech - then told by provisioning that no tech was coming. We finally get to the turn up and I walk the customer through the install on the phone (twice actually, two different people). We get through turn up.

The managed router did not have NAT or DHCP turned on. One day  just for that. No phone number for router configurations. You have to order changes by email!!! And only from the 2 email addresses on the order form. WTH?

Then we add the IP Phones, but we need to modify two lines of the config. We are waiting again.  This is too convoluted for me. The ROI is negative. The turn up alone was 20 hours of time. 

Can anyone guess what carrier this is?

ACC Business is a subsidiary of AT&T. It uses the AT&T network to provide voice, data and Internet services to small and medium business via agents only. ACC Biz does not have a direct sales force. Tech support and billing through ACC Biz is actually more customer friendly than using AT&T. And ACC Biz is MUCH easier to deal with.

When ACC Biz lost Ben Ho as National Sales Director last year, I started to ask what's up. AT&T has a love-hate relationship with their channel. They love you when you fall in line and sell what they tell you to and hate you when you don't. (You can guess where I sit, right?)

So watching the internal moves being made at both the parent company and the step child, my prediction is that ACC Business gets swallowed whole in 2 years.

The product line at ACC Biz hasn't changed much. They are just now getting Ethernet offerings. No VoIP or SIP Trunking, which has been a big hit to SMB. Add in the personel changes, like Dan Morford and Ben Ho, and you have to wonder, what the future holds.

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).

The CLEC show, COMPTEL, is in Dallas this week. Stupidly, COMPTEL had their show overlap the Channel Partners Expo. Hello! Same exhibitors and people can't be in 2 places at once.  But it's this exact kind of planning that has led to the troubles that the CLEC's are experiencing.

Has COMPTEL ever won a major battle at the FCC? Nope.

Yet COMPTEL is a lobbying organization. And its insulated. Where's the outreach?

Anyway... COMPTEL never pushed their members to cooperate in the marketplace even after the TRRO ruling went against them. By now, CLEC's should primarily buying transport and transit from other CLEC's. There should be a COMPTEL database of lit buildings, of fiber routes, and of central office collocation, so that members can easily propose solutions and wholesale to other CLEC's.

At the fall 2009 show, Verizon, Level3 and XO didn't exhibit. (I didn't attend but this is what I was told). That means that two of your vendors don't care that much about you - Level3 who many buy transit from and VZ who with AT&T and Qwest make up the bulk of the cost of services to COMPTEL.

As Tara Seals writes here, lines are moving to VoIP and cellular. While CLEC's are moving to SIP trunking, the majority have no cellular component. Why hasn't that been a priority for COMPTEL? Did they think that cellular was a fad that would fade?

There isn't much reason for the CLEC's to start screaming SIP because in the majority of cases, SIP Trunking is just a PRI replacement - and while the marketing is about cost savings, there is any cost savings to the CLEC. Net sum is that SIP Trunking means less revenue and lower margin.

The MVNO model has proven itself to a road to failure. Maybe Verizon's Wholesale Partner plan for Mobility will work. (But I wouldn't bet on it).

Landline replacement to cellular has been increasing with the market dip. That will likely continue, especially with T-Mobile's new $50 plan as well as the Sprint Everything Plan at $99. Garrett Smith thinks this will kill VoIP. WIthout fiber and without cellular, CLEC's are stuck as a NxT1 pipe pusher.

Where's the innovation?  CableLabs and AT&T Labs pumped out some good stuff like DOCSIS, cablecard and DSL. Where's the COMPTEL Lab or at least the COMPTEL Think Tank?

Is Integrated T1 it? Now to be replaced with SIP Trunk? Wow! Unified communications didn't come out of the CLEC world either. Re-invent or die.

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.