Tuesday, March 30, 2004

Daiwa EuroTelcoblog No. 26, Wednesday, 3rd March, 2004: Updates on - This week's new VoIP discoveries/clarification on the BAFO box/the VoIP dichotomy/FTTH/blogging critical mass (original email blast 11:07 AM Wednesday, 3rd March, 2004)

It's only Wednesday, but there is no let-up to developments in some of the darker corners of the sector which we probe. Most of what follows builds on recent themes discussed in our sector piece EuroTelcorama No. 5 and subsequent issues of EuroTelcoblog.

This week's new VoIP discoveries

As is often the case, one of our readers yesterday gave us a steer towards a couple of interesting developments, this time out of private Dutch company Anoxsoft. One, RingTime (www.ringtime.net) is an amazing-looking browser-based arsenal of communication tools, including video and voice IM. We understand that the voice codecs work down to 14.4kbps, making it suitable for the usage scenarios we outlined in our piece on the glophone last Wednesday. One difference is no breakout to the PSTN, though we understand the company is working on that. However, RingTime incorporates other features more common to social networking and collaboration applications - personal profile data, shared document repository, shared bookmarks, multi-user conference facility, and text/Excel/Powerpoint editor functions. We're looking forward to test-driving it. The other Anoxsoft product of interest is InterTalk (www.intertalk.net), a blackbox appliance designed to allow companies to install do-it-yourself VoIP between branches with no need for desktop VoIP phones or modifications to the legacy PBX. We are currently trying to establish contact with Anoxsoft to discuss both of these developments further. We will update as appropriate.

Clarification on the BAFO Messenger Call Box

In issue No. 23 of this "blog" (as well as in the February edition of our Global Telecom Monthly) we discussed the Messenger Call Box product from Taiwanese company BAFO Technologies, which claims to terminate voice IM "calls" on a telephone. At that point we had not been able to get clarification from the company as to exactly how this was accomplished, but last week were had a short conference call with a couple of company representatives in the US, who set us straight. Some clarification is in order. It turns out that the product is actually a much more straightforward affair than we had initially suggested. Instead of the complicated SS7 transaction we had envisaged, the USB device actually connects with the user's wireline phone, where incoming calls are either terminated or forwarded, depending on the preferences of the user. This is where our billing question is answered: call-forwarding to the PSTN is the financial burden of the receiving party. However, if we consider some of the scenarios in which the box is likely to see use (such as a consumer in the UK receiving what are effectively free "voice calls" from relatives overseas), the cost of forwarding the call to a PSTN phone, even a mobile, may be relatively minor compared to the cost of a normal international call had it originated on the PSTN. The box itself is to retail for $79 when launched in Q2, and though the company originally envisaged selling it globally through the normal retail channels, there has also been significant interest from a number of ISPs. We await more details as the product launch nears, and believe the company may be displaying at CeBIT.

Clayton Shirky on the VoIP dichotomy

Clay Shirky has published an interesting piece on the dichotomy developing in the VoIP market (services connecting to the PSTN and those which do not) which covers many of the issues we have been discussing for some time, and comes to some similar conclusions, if mainly from a US regulatory perspective. In light of recent moves on regulation of access-independent VoIP in the UK (ghetto-ization of numbering into a non-geographic range), however, it may have more resonance here than previously thought. Definitely worth reading (http://www.shirky.com/writings/voip_a_b.html)

Municipal FTTH projects - how incumbents sound when they feel threatened

In EuroTelcorama No. 5, we discussed municipal network infrastructure projects as an emerging issue for incumbents in the access layer, and one US example we delved into was the UTOPIA project in Utah, which seeks to use municipality-backstopped bonds to fund network build to link every address in 18 Utah municipalities to 100Mbps fiber within the next three years. Having gained approval from roughly half its participating city governments, the UTOPIA project has been threatened recently by a bill in the Utah State House of Representatives. The FTTH Council last week formally stated its opposition to the bill (SB66), stating "This bill was clearly drafted to kill the Utopia and iProvo FTTH initiatives. The growing FTTH market in this country today has benefited greatly from the advances made, lessons learned, and price declines created by municipal FTTH deployments. Less than a year ago, Utah was considered a hot bed for FTTH and one of the country's technology leaders. Should this bill pass, Utah will be relegated to the back of the communications pack, with the population likely destined to the limitations of legacy copper or other broadband-inadequate networks."

The link below is to a one-hour radio debate between the head of the Utahns for Telecom Choices and the Community Affairs Spokesman for Qwest, the local incumbent, which has come out in vociferous opposition to the project. Interesting issues are raised early on, when the Qwest spokesman claims it is unfair that Qwest should have competition from governmental bodies with tax exempt status, to which UTOPIA retorts that Qwest's legacy network itself was created and functioned in just such an environment for decades. Listeners calling in voice the full range of pros and cons, informed or not (one caller strangely chooses to compare a fiber network investment to investments in nuclear reactors), and things get a bit personal towards the end.


Blogging is a force to be reckoned with: Pew report on online content creation

It is interesting to see a feature on blogging as an enterprise application creeping on to the front page of the Financial Times IT Review section today, and the connection made with instant messaging is another familiar one to us. The intrepid few who actually soldiered on through our recent sector report will note that we discussed the blogging phenomenon as one which we considered to be negative for telcos at the margin, either as an alternative form of communication/information distribution, or simply as an alternative use of time. We also covered in No. 26 of this "blog" the fusion of RSS and instant messaging known as Gush. Just this week comes some additional insight into the scale of the blogging phenomenon. The always excellent Pew Internet & American Life Project on Monday issued a report on online content creation. It determines that 13% of US internet users have their own website, 7% have webcams which they use to post images to the web, somewhere between 2% and 7% of American Internet users have created blogs, and about 11% of Internet users are blog readers. As the author of the report states, "These are not hugely impressive figures, but they are hardly trivial. They mean that anywhere from 3 million to nearly 9 million Americans have created these diaries...The world is changing in major ways when anyone with a modem can do the same thing as the most sprawling media company, the most powerful politician, or highest-paid entertainer."

A financial vote of confidence for social networking

Another issue we covered in our sector piece, which some readers probably thought was irrelevant if not downright crazy, was the issue of social networking sites such as Friendster. Our interest, again, was in the phenomenon as a source of alternative communication activity for consumers, and consequently revenue erosion for incumbents, especially if these sites begin to incorporate more sophisticated communications tools for users (users of Friendster already spend around three hours a month in the site!). Now it seems that at least one billionaire feels the concept can be monetized. Barry Diller's Interactive Corp Monday announced the acquisition of the ZeroDegrees social networking property for an undisclosed sum.

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