The Billy Joel song reference on this story's title is just to acknowledge the fact that I am not quite the first to have started the speculative "what-if" scenario regarding Global IP Sound.  Rodrigo really gets the scoop about one of the key ingredients that makes Skype attractive: a bona fide CODEC, namely GIPS (Global IP Sound).  This Swedish company is top class in the VoIP CODEC market - and its performance is great in the Internet.  No wonder Skype calls sound so great.  Not too many companies could match GIPS' quality (albeit there was a pretty good one in TeleSym - except that there were some turf battles once more VCs joined in and/or other technical issues were identified, resulting in the company having to wind down its operations).  But like Rodrigo and DG Lewis, I also wonder what kind of deal GIPS gets when it licenses its CODECs to the likes of Skype, Microsoft, etc.  And it would be a great move for some company out there to buy GIPS.  I would say that such an acquisition is not only great due to the technology being acquired, but as a bonus, to the disruption it would bring to all companies licensing the CODEC.

   more »

Skype Journal had an interesting story on "buddycasting", the newest variant of "casting" something out into cyberspace (after Podcasting and Skypecasting).  Turns out this concept by Gogelmogel's Uri Levanon is pretty neat: this Skype mini-cast would sort of work like a personal avatar, enabling a user to share a single short voice message with members of his/her contacts list.  This can be a joke, saying, or an excerpt from a favorite song or program.  In the spirit of the Business Week story, I like this idea quite a bit - since it's all about creating a personal experience. 

   more »

Business Week had a big portion of their current issue devoted to a special report (Get Creative!), and the transition from the "Knowledge Economy" to the "Creativity Economy".  The various articles deal with issues ranging from outsourcing and the commoditization of knowledge to the need to create "consumer experiences" and to innovate in new areas such as "Imagination Breakthrough projects".  This is absolutely a MUST READ edition!

BW also has in this section a ranking of the top 20 innovative companies of the world  (hat tip: Dragos from @rgumente), based on a pool taken this year of 940 senior executives in 68 countries.  The leader is Apple, with about 25% of the vote (more than the sum of the #2 and #3 players - 3M and Microsoft & GE, respectively; note that Microsoft was tied with GE).  The "end user experience" factor definitely helped Apple, but I was really surprised by the relatively low ranking of Microsoft, and wonder if this is just due to the bashing that the company suffers.  I echo Dragos' sentiment (maybe it's an opportunity for people like Robert Scoble to publicize more the Microsoft success stories).

Also noteworthy to mention that, in keeping with the spirit of the story, Business Week is launching a launching a new online Innovation & Design portal.

   more »

During the lift-off of the Discovery shuttle, a large piece of foam broke from the shuttle's external tank - this was a bit of a surprise, given the years of work devoted exactly to avoid this shedding in the wake of the Columbia disaster.  As a result, NASA decided to indefinitely suspend further flights until further notice.  A similar foam break damaged the wing of Columbia during its launch, and subsequently caused that shuttle's disintegration during its reentry into the atmosphere in 2003.  Despite that, the Discovery is OK, and there was no observable damage caused this time around, and NASA hopes shuttle flights will be resumed quickly.

   more »

Looks like the RIM Blackberry might soon get another competitor with the newly announced Motorola Q (originally code-named Franklin). The feature list includes a large color screen, a full QWERTY keyboard, a compact design (thin in the same style of the Motorola RAZR), Bluetooth capabilities and a 1.3 megapixel camera, all running on Microsoft's Window Mobile 5.0 OS.  No price points or carrier deals were announced as of yet, but the Q is expected to start shipping sometime in Q1 2006.  (Ed. note: Mark Evans wrote about the ripple effect that the Q article on Barron's had on the RIM stock earlier this week).

   more »

Earlier this month, the Luxembourg IPv6 Summit was held, and from the indications that I got from a colleague, only a moderate degree of  progress has been made on a few fronts.  The prevalent consensus was that NAT was never meant to be a long-term solution - it was just a stop-gap measure until the address space would need to be increased.  The issue is that NAT does not handle applications that need end-to-end addressing, and that could be trouble for apps that rely on DHCP (incorporating the host's IP address with app layer data).  

Furthermore, the progress of IPv6 is still slow in some regions versus others.  In Japan, for instance, the government took an active participation in helping boost the uptake of the technology, by mandating the implementation of IPv6 as part of one of its initiatives.  The EU has been actively promoting IPv6 and funding quite a few projects, whereas China and Korea expect good growth.  However, in North America, things are progressing on a much slower basis.

There was one presentation in particular that made a lot of sense to me, in addition to making me wonder how fast IPv4 addresses will run out.  I am talking about a slide deck presented by Patrick Grossetete from Cisco.  Patrick presented the next-gen broadband home vision, and on one slide, he illustrates the plethora of devices (PDAs, wireless laptops, gaming, broadband access point, etc.).  If all of those devices has an IP number, then we should be hitting the IPv4 limitation sooner rather than latter.

For those of you interested in learning more IPv6, here is an excellent resource: The IPv6 Portal. 

   more »

Om Malik points out that the icing on the cake (for this transaction) was the fact that by acquiring Teleglobe (a Nasdaq traded stock), VSNL becomes the first Indian based telco to trade on a US stock exchange.  Also, the newly created VSNL-Teleglobe entity will be the world’s fifth largest carrier of voice minutes.  Teleglobe should greatly enhance VSNL's global footprint.      more »

Despite the sensor problem, it seems that NASA is still going ahead with the launch of space shuttle Discovery.  The space agency believes it has fixed the fuel sensor issue that delayed the original departure originally scheduled for June 13th.  I hope all goes according to plan - if so, then liftoff is expected around 10:40 AM today (July 26th). 

Here are a couple sites to watch the launch from:  NASA Television (with help from Yahoo! and Akamai) will have a live streaming webcast, whereas AOL's Research and Learn page will have live video coverage with four different views.

   more »

Tata Group's VSNL (Videsh Sanchar Nigam Ltd.) (NYSE:VSL) made today a $239 million bid for Teleglobe.  VSNL is pretty much the leading Indian ISP and major portals such as MSN India, Indiatimes, Yahoo! India, Rediff, etc. are hosted by the company.  VSNL also is interconnected to a vast array of international service providers (e.g. Teleglobe, Telecom Italia, MCI, Cable & Wireless, Singtel, etc. on the international side via submarine cables).  The bid includes both the assumption of the Teleglobe debt ($61 million) and a premium on the Teleglobe Nasdaq price ($4.50 / share, about 20% percent over the price of the stock).

VSNL hopes to recover the cost in the next 4-5 years.  The acquisition could give VSNL access to an extensive global network of Teleglobe "reaching more than 240 countries and territories with advanced voice, data and signaling capabilities, and ownership interests or capacity in more than 80 subsea and terrestrial cables".

The transaction has to be approved by the shareholders and then pass the mandatory regulatory review, but once it is completed, the new company will become one of the biggest global players in voice, Internet and bandwidth services.  Teleglobe represents yet another piece in the VSNL puzzle (after the purchase of Tyco's global undersea telecom network late last year). 

Great for VSNL.  But what about Cerberus and TenX - did they maximize its value on this transaction?  The Canada.com article said BCE paid Can$ 7.4 billion for Teleglobe in 2000.  I found this Angus Telemanagement note (dated February 2000) that pegged the purchase of 77% of Teleglobe for $9.65 billion in BCE stock.  Granted, that was at the height of the bubble.  For kicks and giggles, let's take a look at Nortel stock at that time (which was worth around Can$80-$90 - let's say Can$85).  OK, today NT stock is about Can$3.20.  So let's take the average of the Teleglobe prices (assuming the $9.65 billion is 100%, not just 77%) - Can$8.45 billion.  

If that valuation is true, that means that Nortel stock, despite its fall, still would be the "better" investment (from Feb. 2000 until now) compared to Teleglobe: Nortel stock today is worth 3.76% of its Feb. 2000 value, compared to what Cerberus and TenX will get for Teleglobe (only 3.45%) - granted, the two capital management companies did not pay the same amount for Teleglobe as BCE once did (wonder what kind of multiple they got - if anyone knows, please let me know).  Hmmm... could some other player (like an euro player with deeper pockets and still having a good currency to back the purchase - France Telecom or Deutsche Telekom) have offered more money?

   more »

The big news on Friday was Cisco's acquisition of Kiss Systems, a Danish consumer electronics vendor that makes set top boxes, DVDs, PVRs and even a Surround Sofa (fully loaded with built in speakers, subwoofer and amplifier in a sophisticated Scandinavian design).  The transaction (worth an estimated $61 million) is being heralded as marking the official entry of Cisco in the DVR and set-top box market.   

The nice thing about Kiss is that pretty much all of their devices (e.g. DVD players and PVRs) come equipped with Ethernet/802.11 connections - that way, end-users can connect them to the Internet or to their PCs to display on their TVs the multimedia content of their PCs.  The upshot is that these end-users can then program remotely their PVRs to record their favorite TV programs if they get held up at work.

   more »

James Enck writes about a CNet article that quoted some analysts claiming that Skype is making BILLIONS of dollars of revenues annually (hat tip: Om Malik).  It was probably a typo - but the question is: how much is Skype really worth?  There have been a few posts on this around the blogsphere (one by James himself, another by Rodrigo and one by yours truly).  Of course, this is all very speculative stuff, and these valuations can quickly become a tad high, particularly if the port blocking keeps on happening or if some other technical glitches are not addressed (e.g. DTMF recognition when picking up voice mails overseas).

   more »

Fresh from my inbox today is an e-mail from Jonathan Askin, the VoIP policy czar/advisor of Pulver.com (one of his many gigs).  He is also the Acting Executive Director for the Global IP Alliance, an "international consortium of IP-based communications services and application providers committed to realizing the promise of interconnecting IP-based communications providers".

Jonathan and Jeff Pulver are spearheading an effort to develop a VoIP policy status matrix and are using a Wiki to update the information.  This will allow all industry participants (vendors, service providers, analysts, reporters, etc.) to get a quick snapshot of VoIP regulatory developments around the world.  I think it is a great initiative, and plan to make a few contributions to the cause myself.

   more »

Robert Scoble proved to be a resourceful and persistent blogger in the quest for capturing the essence of his company's CEO (Steve Ballmer).  The video is available on MSDN Channel 9 (video forum), and it comes with a complete transcript as well.  In particular, I loved Steve's answer about blogging:

Q: Microsoft has been a leader in transparency, blogging, and Channel 9. Why did you allow blogging to happen?

A: In the world of developers I don’t think it would have mattered if I wanted to allow blogging to happen or not. But I think it’s been a great way for us to communicate to our customers and for our customers, more importantly, to communicate with us. We trust our people to represent our company. That’s what they are paid to do. If they don’t want to be here they wouldn’t be here. So in a sense you don’t run any more risk letting someone express themselves on a blog than you do letting them go out and see a customer on their own anyway. It just touches more people. Hey, if people need to be trained or understand better we can do that but I find that it’s just a great way to have customer communications.

   more »

During Supercomm, I took a closer look at the IBM Blade Center.  The IBM booth happened to have some IMS demos, and one in particular caught my eye: a gaming app running on some PDAs (I have a blown up photo in my photo archive).  I thought this was very interesting, as it gave a little snippet of the future of IMS, where partnering is key.  IBM has developed a big ecosystem of vendors to support its IMS offerings.  The IT folks are beginning to take over the telco world (slowly but surely).  So IBM (for that gaming demo) was relying upon the Audio Codes MGW, the Brooktrout MRF, the Nextone CSCF, the Terraplay gaming app, the Ubiquity SIP Application Server and the Leapstone SCIM. 

So what is from IBM besides the Blade Center blade/chassis shown above?  The Presence Server and the IBM Global Services organization that puts together the entire solution.  That last item goes a long way into making this best-of-breed concept a viable option.

   more »

Broadband News had an interesting post giving some detail on a couple of recent TV over broadband announcements: one in South Africa, where Telkom is planning to trial a new triple play service within 3 months, and the second one in the UK, where BT is announcing consumer trials early next year.  BT will be yet another carrier to use Microsoft's IPTV, which is yet another testimony that Microsoft is slowly but surely the early winner in the IPTV sweepstakes, at least in mind share. 

But it is worthwhile pointing out that Om Malik had a great interview recently with Bill Smith (the CTO of Bell South, whom I had the opportunity to chat with at Supercomm) and when the topic of IPTV came out, here is what Mr. Smith had to say:

" We have had our eyes open on IPTV, and none of the problems you mentioned were a surprise to us. Our primary concern was scalability, and we are working with them. "

This obviously came after the Swisscom delay, and it just underscores that IPTV technology still remains a work in progress.  Some analysts are pegging the total number of homes connected to IPTV to be about 20 million by 2008 - not a big number, by any stretch of imagination.  Interestingly enough, Microsoft is going the proprietary way - pushing Windows Media 9 instead of MPEG-4 compression, despite the fact that many telcos are opting for the MPEG-4 codec.

For a more in-depth discussion of IPTV, here is an excellent resource: Roger Towne's web page.

   more »

Mark Evans added yet another interesting twist to the Vonage rumor mill (which has been quite active lately, thanks in part to Rich Tehrani's post about Bell South making a $3.5 billion offer for the VoIP service provider - even Rich admitted the cost per sub, at over $4,000, is extremely high).  It turns out that Mark discovered an intriguing post on one of the Broadband Forums, which speculates that Vonage CEO Jeff Citron would make a pitch to acquire Vocaltec and hence speed up the process for Vonage to become a public company by merging it with Vocaltec (of course, Vonage would acquire control of Vocaltec, which then would likely change its name to Vonage).

This would also be a bullet-proof way to circumvent the SEC prohibition for him to associate with any "broker or dealer in the securities industry" in the US - since Vocaltec is based in Israel.  While this caveat should not quite prevent Mr. Citron from taking his company public, it is a bit of a dark cloud hanging over his head, and would be something taken under consideration by investors going through a company prospectus.  It is common practice for a big company willing to go public quickly (i.e. without massive amounts of paperwork) to merge in a small, already-public company. 

Interestingly enough, it is an intriguing fusion between Vonage and Vocaltec, and there are a few more synergies than just fast-tracking the public trading of Vonage stock.  Besides all its VoIP know-how, Vocaltec had its roots in the software development side (being a VoIP toll bypass pioneer with client applications such as the Internet Phone), and that's an area that Vonage can always add some extra expertise.  For those of you not familiar with the old Internet Phone (I was an original beta tester who later got the software for free, as a token gesture), I went back on the Wayback Machine and surely enough, found an archived version of the Vocaltec site (from December 1996). 

The other interesting common denominator in the story is Jeff Pulver.  It turns out (according to Light Reading and a press release on the Vocaltec site) that the well known and much acclaimed VoIP guru has made a commitment to purchase an equity stake in the company.  Jeff's first Free World Dialup was based on the Vocaltec Internet Phone, so he is obviously very, very familiar with Vocaltec (since its early days).  Also, Jeff was the co-founder of Vonage.

While this might point to a Vonage/Vocaltec fusion, one needs to remember that all of this is purely speculative for now, but interesting food for thought, nevertheless.  I sincerely wish the best for all the Vocaltec family - they are a gifted bunch and pretty much pioneered VoIP from a consumer-centric perspective.  Hopefully they will continue to achieve great things by either receiving some angel money or being bought by another company.

   more »

When a friend from Nortel sent me James Bagnell's story earlier this month detailing the strange circumstances in which Gary Daichendt was let go, it did sound a bit too bizarre for the average reader to believe in (note: the story originally appeared on the Canada.com portal that belongs to the Asper family of newspapers, including the National Post, Ottawa Citizen, Calgary Herald and the Montreal Gazette, however, it is no longer available; that piece claimed that Daichendt pulled a "mission-from-God power play" stunt that did not go very well with the Nortel Board).  But James Bagnell is a bona-fide reporter, earning the acclaim not only from readers but also other fellow colleagues.  So the issue is - did Bagnell's source deliberately feed him with an "embellished" version of what truly happened?  Or was it in fact a true story? 

Either way, one knew that Daichendt would categorically deny the Ottawa Citizen story and give his own account of how he resigned from his post.  And he has done so - in an interview with Globe and Mail reporter Gordon Pitts.  Not surprisingly, Daichendt flatly denied the original story, claiming that the allegation is "so false, it isn't even close".  Interestingly enough, he did acknowledge the fact that he did tell five or six people at Nortel that he and his wife had prayed for guidance before he offered his resignation.  But he said that the comment was part of a broader conversation about prayer involving the other people. "I prayed with my wife; that's a true statement because I am a man of faith."

While we will never really know 100% what truly transpired on that day, one reality is becoming increasingly clear (as per my original post on this story): what works for Cisco may not necessarily work for Nortel.  Mr. Daichendt might have ruffled a few feathers internally by making it public that he was hired to eventually be the next CEO (when the more politically astute thing to do would have been to remain quiet, even if this information was leaked to the press).  The only question is: by proposing a plan that was too radical (given the level of changes, and the suggested timeline, which really was very aggressive according to what I heard), was he really trying to find an excuse to leave?

Nortel might have not been on the list of the big winners of the 21CN RFP, but that does not mean the vendor was completely shut down from earning some other tenders at BT.  Late last year, Nortel won a deal to upgrade the BT Retail Customer Contact Center infrastructure (a US$ 5 million deal to bring 10,000 agents up-to-date with IP-enabled contact center technology, which will make them more productive compared to legacy ACD technology).  Then, in June, Nortel won another tender (valued at US$ 42 million) to be the main supplier to deploy a nationwide communications network that will be used to provide secure managed voice and data services to the UK Ministry of Defence (MOD) and British Armed Forces.

Then, today came the news that BT placed an open-ended order for the Nortel CS 2000 softswitch, enabling the British carrier to provide hosted IP telephony services to large enterprises.  While the value of this IP Centrex win was not disclosed, it does open the door for more future deals (e.g. IP VPNs, security).  The CS 2000 already counts with a long list of customers, including Cable & Wireless (UK), Timico (UK), Sprint and Hong Kong Broadband.

   more »

Recent news from Brazil indicated that the adoption a surprisingly rapid proliferation of VOIP within Brazil.  Abrafix, the Brazilian association for wireline carriers (a non-profit organization that could be more or less though of as a Brazilian version of the Stentor Alliance) published some research on June 20th claiming that 36% of Brazil's outgoing international calls are being made via "unlicensed" operators selling some sort of LD (VoIP toll bypass).  "Unlicensed" in Abrafix lingo means not having the license from Anatel to participate in this sector. 

Estimates indicate that there are roughly 1,9 million VoIP users in Brazil (not including Skype), representing over 3% of the existing line base already making VOIP calls.  This is enough to begin having a measurable impact on traffic, and eventually, on pricing.  Obviously, the biggest pressure will be on the LD market, due to the exorbitant tariffs for LD calls.  However, given the growing number of subscribers making free peer-to-peer local calls, local tariffs will obviously also have to drop (it is about time! - we are so spoiled over here in Canada and in the US that we do not even know what a local impulse is). 

Also worthwhile pointing out that Skype CEO Niklas Zennström mentioned on an interview earlier this year with Valor Economico that Brazil currently is the fourth largest base of Skype users in the world, with roughly 2 million users.  This figure is only surpassed by the US, Taiwan and Poland.  More impressively, the Skype growth in Brazil has been about 7,000 new adds per day, which would translate to roughly 3.3 million users by the end of 2005 (about 6% of the installed fixed line base).  That is a huge result that can have a lot of ramifications - no wonder the telcos have already begun to actively lobby the government to update the General Law of Telecommunications, in order to address the new realities of the marketplace and issues such as convergence and the impact of VoIP.

   more »

It was interesting to see the news on the FT that Telefonica will buy a stake in China Netcom (more precisely, 2.99% for a price tag of €240 million).  While this is still not enough for a board seat (the minimum holding to warrant that is a 5% share), Telefonica is hoping to eventually attain that goal.  The price, according to some Wall Street estimates, came at about a 15% on the fair value of China Netcom - the reasons being the high exposure to broadband growth (given that China Netcom has a near monopoly in local loop, particularly in areas such as Northern China), and the defensive nature of PHS versus wireless (with prices roughly half CDMA).

It is interesting to note that Telefonica is continuing with its strategy of making investments in foreign telcos, despite not being terribly successful thus far in some of its other plays (e.g. Cesky Telecom) and also despite the lackluster performance of other euro players in Asia (e.g. Vodafone's acquisition of a 3% stake in China Mobile has proven to be unfruitful thus far). 

Hopefully, Telefonica's persistence will pay off, and show the way to astutely invest abroad for North American service providers, which have typically have retreated after mixed results investing in regions such as Latin America (e.g. Bell South, MCI, etc.). 

   more »

Ben Charny had a great post on the backlash of VoIP in Germany. Vodafone Germany made it known to German telecom regulators (during a tariff filing) that it plans to disable calls from Skype and other Internet-based VoIP operators.  Obviously, wireless operators are feeling threatened by VoIP - that is pretty much a similar reaction to their wireline counterparts.  However, with the advent of seamless roaming ,VoIP running on a flat-fee based WLAN model and a pretty decent QoS (using CODECs such as GIPS) can certainly be a big problem to wireless operators.  While the article does state that "Vodafone's other 15 divisions serving nations in Europe and Asia have not enacted such a policy", French operator SFR made a similar announcement back in March (i.e. that it will block VoIP and peer-to-peer streaming traffic).

I wonder what legal recourse Skype would have against this, but these are yet another couple of examples representing proofpoints that whoever owns the last mile typically has a huge turf advantage.  And even companies such as Vonage can be quite vulnerable.  OK, so Madison River Communications was caught in the act of port blocking and got slapped on the wrist by the FCC.  But that was sloppy on Madison River's part.  What if instead of port blocking, it would have just put on additional traffic, or added some randomly generated noise / delays / jitter / etc.?  Such an action would be much harder for Vonage or any other VoIP SP to prove, and hence would create a big barrier for a wider adoption of VoIP.

   more »

Mark Evans had ample coverage of the Nortel AGM, including his post-mortem, where he credited Nortel's brass for managing very well during the Q&A crossfire.  I could not attend the event due to a conflict, however, had I been at the Toronto Congress Center, here is the question I would have directed straight at the Board of Directors: "Why are you taking Toronto out of Nortel's R&D equation?" 

I understand 100% what the CEO/Admiral Owens meant when he talked about Nortel's Brampton HQ.  It is a very large facility that was once one of the main manufacturing plants of the company, but now is the base to only roughly 1,000 management, HR, sales and various administrative personnel.  From a strict accounting perspective, it almost represents the proverbial "white elephant" that despite being a great facility, with a fabulous work-out gym, cafeteria, visitor center, etc.  I understand that the company has been trying to sublet some of the vast unused space, without success, and the area taken up by this space is quite above and beyond its current needs.

But is moving all these operations and consolidating everything from the Brampton HQ to Ottawa the right thing to do?  That will effectively kill any future potential for Nortel to ever recruit young bright engineers in what is Canada's largest market: the GTA (Greater Toronto Area).  Some of the brightest engineers graduate every year from institutions such as the University of Toronto (Nortel collaborates with U of T on a lab and some joint research projects) and the University of Waterloo (which granted, is not in Toronto, but pretty close).  Throw in a few other institutions that are also within the area (York, Ryerson, McMaster, etc.) and then one realizes the great recruiting potential of Toronto. 

Moving whatever small pieces of R&D (probably more like a very little R and a very big D), PLM (Product Line Management) and product marketing that are left here in Toronto to Ottawa makes no sense whatsoever.  Many brilliant folks refuse to go work in Nation's Capital (famous for its brutal winters) and instead choose to remain here, where they can work at other established vendors such as Avaya, Cisco, IBM, RIM or Siemens, service providers such as Allstream, Bell Canada or Telus, or even startups such as Newstep, etc.  In fact, many Nortel competitors, realizing the great potential of the GTA's graduates are expanding their operations here (such as Siemens, for instance, which picked up a couple of startups within the GTA over the past few years: Trango - a contact center vendor - and Chantry Networks - a WLAN vendor).  Now, does it make sense for one of our nation's greatest R&D spenders to completely shut down its operations in Canada's largest city?  I would say no - au contraire.  Closing Brampton might be necessary from a cost saving perspective, but there is plenty of cheap office real estate to be had/rented (such as for instance, the old BNR location in downtown Toronto, at 522 University Avenue, where Nortel once had a sweetheart of a deal).  Move some of the bureaucratic functions back to Ottawa, but keep and grow the R&D in Toronto.  Hopefully the new directors will hear this message loud and clear.

   more »

Many folks trying to predict the uptake of 3G in regions such as Europe and North America are looking at the Japanese and Asian experiences in order to obtain important insights into how things will develop in their own turf.  However, wireless telecommunication is all about the subscribers' personal choices, with cultural differences definitely playing a key factor.  Therefore, extrapolating the Asia/Pacific 3G experience thus far to another continent is definitely a risky proposition.

Nevertheless, even considering this caveat, there is definitely potential for some takeaway lessons from the Asian development up to now.  One observation that is applicable elsewhere is that 3G rarely changes the popularity of apps - chances are that the same apps that were popular in the 2G world will be the most widely used in 3G as well, with the main difference just being faster download speeds. 

There is much debate on the issue of the uptake of video telephony.  In Europe, for instance, it is regarded as an important component of 3G offers, with operators such as 3 or Vodafone having it as part of their portfolios.  In Japan, despite the fact that it was one of the cornerstones of the DoCoMo 3G portfolio, the uptake has been pretty disappointing thus far.  Culture might play a role here - chances are Europeans are less intimidated by video calls than people in Asia (a similar phenomenon to VM), at least when the call is informal.

Currently, there has been no Asian "killer app" on the data side - albeit data usage is increasing.  News, entertainment, ring tones, sound clips, games and screensavers all compete for the title of most popular non-voice app, but there is no current clear winner as of yet.  This can certainly be the case in other geographies, until some more refined applications emerge. 

So these are a few "uber" conclusions that can be drawn from the Asian experience - 3G still represents a technology in flux, with much growth to come in the years ahead.

   more »

It was really interesting to see how many people jumped on the CRTC bandwagon, praising its VoIP decision as being a savvy one, and one that really promotes competition by taking ILECs such as Bell Canada and Telus out of the game (at least on their own home turf – and let’s be honest about it: many folks seriously doubt that we will see those players actively promoting and campaigning VoIP offerings outside their incumbent territories).

Amazing how none of these so-called “expert” analysts (with a few exceptions, of course) picked up on the fact that even under a full deregulation VoIP scenario, the ILECs would have faced margin pressures, and would have had to reduce prices to maintain their market standings and stay competitive. As Michael Sabia himself declared in a Globe and Mail interview a few weeks ago, the telcos would need to cannibalize their own base to keep their market shares. But the consumer would have been the winner in that case, since a new lower price equilibrium would have been reached. Competition and lower pricing is what drives progress, and Japan is a great example of that (check out this TF entry about Yahoo! BB).

However, by preemptively taking the ILECs out of the VoIP game, the CRTC pretty much assured that the existing status-quo on pricing would continue (there will be some competition, but price drops will be small compared to what they would have otherwise been. Let’s take a look at the MSO VoIP launches thus far: most cablecos have thus far been pretty “rational” and “disciplined” in their pricing (e.g. Shaw’s $55 / month offering). The lone exception is Videotron, but the fact of that matter is that the MSOs will balance profitability and volume. So it is very unlikely for us to see a major price battle happen any time soon.

There is some hope that to stem the loss in local market share, Bell and Telus might resort to offering some discounts in Internet, video (Bell Canada’s ExpressVu service) and wireless segments, or perhaps offer some bundling savings. However, thus far, Bell announced that it was taking away its $5 offer for 1,000 LD monthly minutes anywhere in North America for customers subscribing to the Bell bundle (local, wireless, Internet and satellite service).

In the meantime, the incumbents are appealing the decision to the federal cabinet, a process that can take at the very least 6 to 9 months, particularly considering the current turbulence in Ottawa.  The fact that there were two dissenting opinions should provide the ILECs with some valuable ammunition during the appeals process. 

On a separate note, Industry Canada recently formed a 3-member panel to review the Canadian telecommunications policy. This initiative is essentially a broad review and is not expected to affect current CRTC proceedings. Chances are that the panel will probably zero in on less sensitive matters like broadband access and deployment, rather than VoIP and/or competitive issues, and will provide its recommendations to Industry Canada before the end of the year. The findings may have implications on the role of the CRTC in telecom regulations in the future.

   more »

Here was a great find - it turns out that Brough Turner (the CTO of NMS) is also a blogger and he recently posted a great insight on IMS.  In fact, based on discussions I have been having with various wireless operators around the world, there has been a bit of skepticism on the actual value proposition of replacing mobile infrastructure based on circuit switching with packed switched gear - the extra bandwidth, the lack of QoS (which will come, albeit in 3GPP R6), and the handset availability are all issues that will take time.  In the meantime, most services will be based on streaming of audio and/or video, location, gaming and presence.  Instead of focusing on OPEX savings and cost justification, the early adopters of IMS will revamp their networks due to strategic purposes, and not because some ROI benefits.

But one quote of Turner's points that I really enjoyed was his comment #7, namely:

SIP (with SDP, RTP, etc.) was originally a solution for peer-to-peer communications sessions, notably peer-to-peer telephony.  Subsequently, various IETF working groups have extended the SIP family of specifications to support every kind of telephony that has ever existed, specifically including central control of dumb devices.  It's difficult to see how SIP proponents can complain that 3GPP has distorted the original vision of SIP (as a peer-to-peer protocol) when the SIP community has already done the same thing.  It sounds like the real issue is "who is in charge?"

Interestingly enough, this is happening a lot with IMS.  SIP is about smart endpoints, P2P, etc.  IMS provides for a centralized call session control (the famous CSCF, also dubbed the "IMS server"), a rich centralized database (HSS), and the separation of the transport, control and application layers.  Can the two go hand-in-hand?  Yes, but in between, as we might expect, there will be a lot of "proprietary" versions of SIP - Lucent, for instance, has its SIP-Assist technology that offers a greater capacity (by 40%) on its CSCF (Lucent Session Manager or SM) via some sophisticated "parsing and messaging techniques".  SIP purists will have a field day with this - what would someone like Henry Sinnreich say?  On the other hand, the vendors will always try to build a competitive advantage, and that is to be expected.

   more »

Brazilian telecom regulator Anatel announced appointments to its new organizational structure earlier in June, signaling yet another step in its quest for restructuring.  The Brazilian national telecom agency decide to reshuffle its deck following a process rather than service based organization.  This means no special treatment of public versus private services under the new regime, in contrast to the modus operandi of the old system, which was geared towards protecting the wireline voice services.  This would tend to indicate a much lighter approach to regulation, enabling mergers that can form full-service national competitors.  The real competition would then be among these nationwide new organizations - with companies such as Telesp, Brasil Telecom and Embratel expected to take advantage of the change in rules.

On a separate note, Anatel is also trying to hold its 3G license auction as quickly as possible (perhaps even this year).  Despite some skepticism, I do believe that Brazil would be able to attract a new entrant (like Hutchison or Vodafone).

   more »

SiliconValleyWatcher reports on a brand new VC fund totally devoted to investments in RSS (Really Simple Syndication), the syndication technology that has been made so popular with the advent of blogging. RSS Investors has been launched with $100 million to finance startups "championing RSS-related technologies, including news aggregation, blogs and new classes of search engines". RSS Investors will not only examine startups using RSS for news aggregation, but also "RSS applications that aggregate data, particularly in the financial and medical industries".

It is great to see this story unfold - RSS could very much be the next big core Internet technology (as the article itself points out, it is a "push-me, pull-me" mechanism - neither e-mail nor web page, but having characteristics of both).  More importantly, I believe that the next wave is for applications that manage RSS feeds (for instance, performing searches on key words and routing news feeds containing those words to a mailbox address - where the results could be displayed in an e-mail formatted in HTML with the original links or with a brand new document containing the original text and graphics).  And after that, content-based routing, as envisioned by Solace Systems.

   more »