The Year That Was a Mess

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

The Year That Was a Mess

We have a huge Net Neutrality debate, Open Internet fights (especially between Netflix and ISPs) and peering duels (between ISPs and backbones, notice the pattern?). Why? Lack of broadband competition.

Big mergers still in play: AT&T buying DirecTV to keep up on TV; and Comcast in a three way with Charter over TWC.

Birch bought Cbeyond. TW telecom is now a part of Level3. AT&T swallowed Cricket. Siemens Enterprise Communications re-organized a couple of times and re-branded as Unify. Zayo went public.

So many CLEC execs exited the carrier world for Master Agencies. No idea how that will pan out - as the master model is shifting as the margins shrink. Maybe those carrier guys - who came out of less than stellar companies - CAN steer a smaller ship through stormy waters.

After Softbank bought Sprint and Clearwire last year, layoffs ensued all year for Sprint. And not just at Sprint. This was an ugly year for telecom employment as jobs were sloughed off left and right.

BTW, Telstra buys Pacnet for about $700 million.

The buzz this year - especially at shows like ITEXPO and Metaswitch Forum - was SDN and NFV. CenturyLink is blazing atrail to NFV.

Windstream was in a pickle this year. Money issues, revenue declines, layoffs - oof! 70% of its revenue is based on broadband. So the CFO came up with a great idea: form a REIT. It might happen in 2015. Meanwhile, the REIT idea in the data center space is still alive and well: Equinix Board of Directors Approves REIT Conversion

One bright spot seemed to be in cellular where T-Mobile's CEO decided he had nothing to lose after being blocked at the altar twice (Sprint and AT&T). So he started to turn the cellular market upside down. Sprint joined in after Apple released the iPhone 6. The downside to the pricing war: (1) AT&T and VZW are still giants and the gap is still wide; (2) MVNO models fell apart.

Also, OTT like WhatsApp, Viper, and so many more are starting to have an effect on profit streams of cellcos. At least a little. It is what our industry is famous for - Arbitrage! Take all the margin and profit you can out of a service. We don't make the pie bigger; we steal the filling. It's why I think mobile VoIP is a boring sector and don't really write about apps. It does not add anything really innovative; it just allows folks to do the same stuff for free or less money. Like Bittorrent.

And if Hosted VoIP is so wonderful - and so many of the 2000+ providers are crushing it (just ask them! they are all doing dandy.) then why oh why does RC and S2S need more investment money to grow?

This was the year of the data breach - from Target to Sony no data was safe. What does that say to the marketplace as the industry tries to get businesses to buy cloud services? This riding in after the Snowden effect on privacy concerns about cloud services.

This is funny: "Verizon will roll out new NSA-friendly encrypted wireless voice service"

Carl Ford writes Is It Time to End the FCC? I agree with him as I have written for years. The FCC has a full docket that they will take years to decide. Their decisions are not only late to the party, but always end up in court, where the FCC loses half the time.

Muni and/or public-private networks like Google Fiber are pushing the Gigabit broadband momentum. Meanwhile, laws are being put into effect to ban muni networks. Just another example of lawmakers being beholden to Corporate America, not the people.

No idea who is going to buy all that crap on Amazon between layoffs and the dwindling middle class. Or who pays for the Walmart on every corner in America, since the each store requires $1 million in public assistance per year

USF reform, E-Rate changes, Connect America (CAF), rural broadband experiments - all kind of go together. All under the big Universal Services Fund umbrella. All changes slowly being made to spur broadband in rural communities, libraries, schools and rural healthcare. It is having a ripple effect on the business models of the RLECs, who spent a lot of time and money lobbying in DC this year.

BTW, big news in Iowa. "The Iowa Supreme Court says companies that provide phone service through the Internet must be taxed the same as traditional telephone service providers."

The channel saw a lot of activity as well in 2014. So many cloud services players banging on the door asking for partners. Cloud Cloud CLOUD!!! Quite a bit of musical chairs in the vendor channel chairs too. Master agencies had to sell direct to keep up with increasing quotas under decreasing price points. The TCA rolled out a cable certification too.

If ever there was a time for companies to do strategic planning and internal evaluation it is now. Checking your strengths and weaknesses allows you to plan, but it also allows you to steer around obstacles that may get thrown in the way.

Special Forces Assessment Thought: Challenges can be stepping stones or stumbling blocks. It's all in your perspective. via @Bob_Mayer

The bright spot: customers are buying!

"All the economics are changing, as are consumption patterns, and they're shifting faster that the mindsets of those that create and publish." - Seth Godin

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