Recently in wimax Category

In speaking with Microcorp today about their agent event in October in Atlanta, we were discussing a panel on Trends for 2010.  It's not so much about the vendors, it's about the services that the vendors are offering that will become the next revenue stream for the channel.

This ties in with a TCA listserv discussion about Alternative Streams of Revenue for the Channel Agents. TCA will be hosting an agent call about Electricity with a couple of agents who have been selling electricity to businesses in unregulated states for a while. (Paetec offers this to agents as well).  Other topics include Web Strategy (like Lead Generation through Search Engine Marketing (SEM) and Social Media Marketing); SAAS; 4G; the Cloud; and Managed Services.

It won't be enough to just sell TDM in the future, you will need partners to offer Telecom Expense Management (TEM) and Auditing as well as all the new services coming down the pipe (electricity, SAAS, cloud, 4G, VOIP, SIP Trunking, etc.). 

Maybe we are heading into Master Agency 2.0 - the dawn of an era when the master agent will have to be more than a collection of carrier contracts. What do you see that you might need from your Master Agency in the future? Let me know. Thanks.

I'm seeing a lot of news in our space but not enough time to cover it all or analyze it, so here's just the headlines:

DPI (deep packet inspection) by cable being investigated by Congress. It scares the crap out of Boucher (ARS). Cox, Comcast, NebuAd  = new privacy law being debated (NYTimes).

Broadband download caps: in the news all week because apparently TWC said that without caps, they won't upgrade any more. Well, I have news for them: if they don't upgrade they will lose customers. Can you say FiOS, WiMAX, U-Verse, and now Wildblue is testing 18MB service.  ARS notes there are caps even when not explicit like TWC.  VZW and others have usage limits built into the acceptable usage policy.

Clearwire is being sued - class action status - for ETF (early termination fees) and network quality issues (can you say: false advertising on network performance?). (see here and my twitter pal @morisy).

And speaking of Caps (no, not hockey, how about Comcast battling it out with the former FCC chief's ruling that cable companies can only have a maximum of 30% of the entire market? If we applied that to telecom - and why shouldn't we? - we would have to break up Ma and Pa Bell (Verizon and AT&T). Please note: I am all for that.  Meanwhile Comcast's defense is Freedom of Speech.

Lastly, Facebook exec becomes new CEO at MySpace. Too little, too late? And Yahoo! is closing down GeoCities free hosting services, which it bought in 1999 for $3.5B. The analysis of the deal is on Fred Wilson's blog. Worthwhile read for start-ups about what VC deals look like.

At VoiceCon, Grandstream had some new SIP-based gadgets including the video telephony units that VidTel is using and video surveillance gear. As TMC's Erik Linask reports here, "The first products in the new line include one- and four-port video servers/encoders -- its GXV3501 and GXV3504 -- and an IP video camera -- the GXV3601.... All three products leverage Grandstream's experience with H.264 real-time video compression, providing clear video while optimizing bandwidth usage, and SIP-based VoIP technology for providing two-way audio and video streaming to mobile phones and desktop video phones."

But the other hardware surprise for me was Aastra's Clearspan. It's basically an Aastra branded version of Broadsoft on a blade server for enterprise. (One review here). Taqua is also reselling Broadsoft to smaller service providers but under the Broadsoft umbrella.

Meanwhile at CTIA, WiMax gadgets were launched, including the Nokia N810 tablet and the Samsung Mondi.WiMax gadgets WILL be key to WiMax actually taking off - although Nokia called WiMax BetaMax. I guess no one at Nokia knows that professional videographers and studios were using betamax up until the HD upgrade recently.  Anyway, if Sprint, Claerwire and others are going to get the most out of the billions in deployment money, there will need to be gadgets that consumers can use with WiMax (even at 3650 MHz). Why? Because handsets drive mobility - even if you define a handset as a Kindle or a mini-PC or other gadget.

This from Telephony online and the Convergence Consulting Group:

The latest in an annual study of the bundled services market shows US telecom service providers are losing wireline voice customers at a faster pace and being transformed in the process into companies that will look very different from their traditional telecom roots. The Battle for the American Couch Potato: Bundling, TV, Internet, Telephone, Wireless, released this week by the Convergence Consulting Group, shows maintaining a broadband connection is increasingly important to telecom providers, as wireline voice services become much less important.

If you look at the numbers in that PDF report and you still think that the QBPP is a viable option or that the last 400K businesses in the BellSouth region will somehow see the light and convert, I have some land for you in South Florida.

I have written about this in years past: the telcos have finally hit the wall. Everything is flat or down now: TV, wireline, cellular, and broadband. Granted most numbers are for residential, not business accounts which agents sell, but this will affect the entire telco business. Telco moved from the most profitable service - Voice - to Internet (the 2nd most profitable) - into TV, which is te least profitable. Why? Set-top boxes cost $400 per pop. How do you recoup that $5 per month rental? Most of the pricing goes straight to the content. You know, Disney and ESPN want their dough. Then there's the network upgrade for TV (and high-speed internet), which although VZT says is under $900 per home passed, the numbers I see are closer to $2000. Let's factor in the advertising. I get something almost everyday from VZ. At even $0.75 per mailer that's $15 per month. Times how many homes passed?  See how that may slow the telco engine? Plus MSO's moved from the least profitable service (TV) to the most profitable (Voice). And MSO's are getting into mobile data and maybe cellular voice with Sprint.

When you look at the summary from Convergence Consulting Group, it looks bleak.

• We estimate Cable's double play base of TV and Internet subscribers YE2008 at 61% (we forecast 79% YE2011). The RBOC/Telcos residential telephone to broadband overlap was 33% at YE2008 (we forecast 54% YE2011). Hence, it's easier for Cable to add voice customers off this overlap than for the RBOC/Telcos to add TV customers.
• 2008 RBOC/Telcos residential wireline telephone line loss was 10%.
• Wireless Substitution was responsible for about half the loss and Cable for the other half.
• We forecast Cable will have 23% of residential telephone subscribers by YE2009.
• We estimate wireless-only households at 20% at YE2008.
• Wireless annual subscriber additions continue to slow, 2008 saw 15.6M (2007 saw 22.4M) and we forecast 13.9M in 2009.
• Data continues to drive wireless ARPU growth (voice ARPU is declining). We forecast that price competition, which intensified in 2008, will continue to increase going forward.

Telcos are building out high-speed networks for TV and Internet, which is costing a bundle, at the same time that they are forklift upgrading the cellular networks to 4G. Have they even paid off the debt from constructing the 2.5G and 3G systems? Meanwhile, Charter is bankrupt and the rest of the MSO's have to upgrade to DOCSIS 3.0 while also constructing WiMAX networks. All while the ARPU is decreasing and the customer acquisition costs are increasing.

With these kinds of pressures on the RBOCs, imagine the pressure on the ILECs without a cellular division like QWEST, Embarq, Windstream, Frontier and Fairpoint. Landline losses that cannot be off-set by TV or cellular revenues. Yikes! Basically, the EarthLink strategy right? Cost cutting as the primary executive decision. Right out the knitting until its over.

Where do you think Agents come into that play? With losses, an easy cost cutting measure is to stop paying agent commissions. Think about your Channel Partners in 2009.

It must be confusing to the consumer: 3G, 4G, CDMA, GSM, EVDO, WiMAX, Wi-Fi, LTE. I'm in the Industry but I notice when people confuse the terms. (Seems often like everything is inter-changeable).

Clearwire will be rolling out WiMax for its 4G service, according to a company press release.

"During 2009, we expect to launch our Clear™ branded mobile broadband services in a number of new markets such as Las Vegas, Atlanta, Chicago, Philadelphia and Dallas/Ft. Worth and in our largest existing markets, namely Baltimore, Seattle, Honolulu and Charlotte," Wolff added. "With a robust pipeline of cell sites under development, we are working to significantly extend our wireless 4G network to many more markets, giving us the ability to cover as many as 120 million people with true broadband mobility by the end of 2010, including in major markets such as New York, Boston, Washington D.C., Houston and the San Francisco Bay area to name a few."

Clearwire is stating that it will blow VZW out of the 4G water in 2010 by spending $1.5B in 2009 on its network.

Of course, Clearwire is bleeding money too. Even after a 2008 where it raised $3.2 Billion and merged with Sprint's XOHM/ 4G Assets, which resulted in Clearwire holding the largest mobile wireless spectrum portfolio in the US.

• ARPU rose to $39.70 a month, from $36.09.
• Churn bumped up to 2.8%, from 2.4% a year ago.
• CLWR had 5,000 net subscriber adds in the quarter;  475K total.
• costs per gross add fell to $468, from $550
• has $3.1 billion in cash, cash equivalents and short-term investments.
• posted an adjusted EBITDA loss of $157.3 million
• revenues were less than $60M.  [barrons]

 The accounting is crazy due to the investments by Sprint, Google, Intel, bright House, TWC, and Comcast. According  to the SEC filing of the New Clearwire:

On November 28, 2008, Clearwire, Sprint Nextel Corporation, Comcast Corporation, Time Warner Cable, Inc., Bright House Networks, LLC, Google Inc. and Intel Corporation completed the transactions contemplated by the Transaction Agreement and Plan of Merger (the "Transaction Agreement"), entered into by the parties on May 7, 2008. For accounting purposes, the transactions (the "Transactions") are treated as a "reverse acquisition" with the WiMAX business contributed from Sprint (the "Sprint WiMAX Business") deemed to be the accounting acquirer. As a result, the financial results of the legacy Clearwire Corporation ("Old Clearwire") prior to the consummation of the transactions are not included as part of the Company's financial statements.

Meanwhile MetroPCS and Verizon Wireless are rolling out LTE in 2010 [per the Washington Post].

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).

Buzz Broadband in Australia is claiming that WiMax sucks. The WiMax vendor, AirSpan, says that the network design was poor. Others have said that the 3650 MHz spectrum used for this WiMax trial has limitations that you don't see on 2.5 GHz. Telecomweb and DSLReports have more.