Tuesday, July 28, 2009

Ferrari, Ford, or Trabant?

It's front page news in the Financial Times today. Ed Richards of OFCOM droned on about it somniferously on Radio Four this morning, while interviewer Sarah Montague sounded very irritated with him. OFCOM's latest update on broadband speeds is going to be picked apart by the media ad nauseum, and I couldn't be happier about it.

Repetition is a good thing where consumer education is concerned. For years I've been hoping that Clive Sixpack would take a look at the parlous state of UK broadband versus its neighbors and get annoyed, because annoyance is frequently followed in this country by quiet muttering, and in some cases by a demand for action, or even a good punch-up. Hopefully the Daily Mail will take hold of the story and run with it, without attributing the problem to illegal immigrants, as it seems to do with most issues.

I'm joking here, but my point is serious - this is a golden opportunity to make broadband a genuine populist issue to demand change. One of my colleagues came up with the idea for a campaign to encourage subscribers receiving only 40% of their nominal line rate to submit only 40% of their nominal tariff every month, which I quite like.

I don't think there's anything here that people who follow the industry haven't at least suspected, if not known outright, and the spectrum of operator suckiness is almost precisely what I expected when the previous SamKnows report was issued. Still, it's nice to see the worst offenders named and shamed publicly, though I suspect their customers are well aware of their failings already.

The big winner here is Virgin Media - clearly acknowledged as superior, the BBC Radio Four news story intro this morning even highlighted that the study found "broadband by cable is better than by phone line," which is the sort of PR you can't typically buy, let alone get for free. I suppose Lord Carter must also be feeling pretty good. If the average speed delivered in the UK is 4.1Mbps, then Digital Britain's "vision" of 2Mbps for all is virtually in the bag, three full years ahead of schedule. Job done, time to move on!

It's a sad irony that, just as we reach a point where the flames of public discontent can be fanned effectively, the government will have the luxury of shrugging and pointing to empty coffers, while just up the road, construction continues on an Ozymandian project, the cost of which equates roughly to one-third the total bill for FTTH to every home in the country. Never mind, we're building a legacy here, just ask the Athenians. And when things go wrong with the subprime self-cert mortgage which is our future, we can pile into the broadband Trabant we've bought and seek opportunity elsewhere, at 4Mbps per second.

Monday, July 27, 2009

Mega rebUKe

From the "Duh of the Day" category, 84% of respondents to the ISPreview survey in the UK think 2Mbps universal service is not enough. Frankly, I'm surprised it's only 84%, and I'm really astonished that only 9.5% view upload as a key factor.

Thursday, July 23, 2009


Busy, busy, busy. Just enough time to give some attention to three car crashes of interest:

1) Spinning out of control - By the way, from now on all my blogposts will actually be written by a 20-year old woman in Dhaka.

2) Blykety-split - We used to be in the same building as this company, and they had fanstastic office furniture, hopefully on flexible leasing terms.

3) That smarts - Haven't seen any coverage of this in the English media, and I'm not sure I fully understand the background here, but it looks to me like a small French smart meter/energy management vendor is actually going to be forced to refund to EDF the equivalent of what consumers have saved by using its product, which is apparently equal to 70 - 80% of its annual revenues. That's rough justice.

Tuesday, July 21, 2009

Fiber a la casa

CMT has just published a study on fiber in Spain, which I will try to read through later today. Seems to contain a number of detailed scenarios.

Friday, July 17, 2009

My small contribution towards VMED shareholder value

I know Virgin Media is on a bit of a roll with a well-timed refinancing and a couple of positive releases on broadband and video differentiation versus the DSL brigade. As a customer, I wish them well, and so I have resolved to help them in the quest for shareholder value creation, which I guess at some level involves keeping the outdoor plant secure. So once again, here is a cabinet in my local area in need of some attention. I know it's a blurry image, but it was raining heavily at the time - I stopped nevertheless, because I care. The cabinet is on Upland Road near the intersection with Barry Road in SE22.

eComm Europe 2009, an unsubtle reminder

Folks, I know times are tough and budgets constrained, but if you are trying to be more selective about which conferences to attend, I don't think you could do better than eComm. I know for a fact there is some very special stuff in store, and as an example of past quality, here's my main man Malcolm Matson's speech from the last event, which I think on its own would justify the cost of admission. The Super Early Bird offer expires next week, and if you book now using the code "Enck" you'll get a 20% discount on top of that. (Disclaimer, I am an advisor, but have no economic interest.)

It's the '90's Jim, but not as we knew it

Wednesday, July 15, 2009

More retro telco oddities

Honestly, when I see footage like this, I feel truly amazed that we ever achieved analogue telephony in the first place, such was the almost insane level of labor/capital intensity required. Yet it is also equally hard to imagine quite where we would be today without that investment, however strange it may appear in retrospect. Methinks there may be a lesson of relevance to the NGA issue here, but it's getting late, so just enjoy the images of industrial big iron at work on tasks which a Skype client can quite happily handle today.

(Face)Book of the Dead

When I wrote this piece last week, some of what was in my mind was the potential lack of control and access to data which can arise in the event of the demise of a site or service. In the admittedly unlikely event that Facebook were to shut down, what recourse would users have to gain access to the data or archive the communications and content shared?

However, there is another gloomier aspect to the issue, which I have been discussing a lot with colleagues recently, and that is what happens to digital assets upon the death of the user/creator? If my laptop and I go down in flames in a plane crash, my JungleDisk back-ups of family photos and videos are of little use to my family if there is no mechanism for gaining access to the account. Ditto for everything I have put on Flickr, if they're unable to execute a renewal of my paid-for "Pro" account, which is currently tied to my credit card.

As our reliance on web services grows, there inevitably will come a time when these digital orphaned assets become a real source of pain or loss (and probably litigation) for many people. Lillian Edwards, whom I sat next to at a dinner a few weeks back, is featured in an interesting video on the work she has been doing around these issues. As she stresses, this is something which most people aren't thinking about - yet. She highlights Legacy Locker as one interesting potential solution, and I agree it looks promising.

I also wonder if this isn't the sort of issue which could really help the OpenID movement sell its proposition. I'm not a lawyer, but presumably if you have a legally recognized digital form of ID (check out Turkcell's offering here, particularly under the "Public" heading), then this is something that family members can claim power of attorney over in the event of death or incapacity, or that individuals can bequeath access to via a will.

Tuesday, July 14, 2009

How not to create a market, 1976-style

Can't figure out why this never became a mass market device - hell, it was color-coordinated and everything! The USP is certainly exhaustively conveyed by a terrifying woman in Karen Carpenter-esque garb. And it allowed you to store 12 whole numbers, not 10, not 11, but 12 - perfect for anyone with a Messiah complex. I can't ever recall seeing one - can you?

Monday, July 13, 2009

Shock horror newsflash: the consumer is changing!

I admire the resourcefulness of the Morgan Stanley media team in London for outsourcing some of their work to a "digital yoof" who's already on the payroll, and I'm sure the note makes an interesting read, though I haven't seen it yet. What I find fascinating in all of this is not what the hoopla surrounding this report says about the media consumption of kids, but rather what it says about the media consumption of adults in the financial markets.

Anyone who has spent any time at all observing or speaking to real kids, or even just doing a little light Googling on these issues over the past five years should find the conclusions utterly unsurprising. I also seem to recall writing on the very same themes five years ago, and I know I wasn't alone even then. So the fact that the report has generated such intense interest shows just how poorly engaged the market still is with the kids. It's even more shocking to think that some of these same high flyers will be betting on a recovery in traditional media and advertising revenue streams which these consumers of the future have already opted out of entirely.

Friday, July 10, 2009

Upstream, without a paddle

A Palladium Club uber-mega-value reader alerts me to yet another good real-world illustration of what a dearth of acceptable upload capacity in the UK (or any other) market means for the economy. In this desperate post to the ThinkBroadband forum, a man with a lot of data is willing to pay a healthy hourly rate to be able to upload it to the CDN his business uses. D'oh, wrong country. But perhaps a diversification opportunity for the likes of Kinkos/FedEx.

Wednesday, July 08, 2009

Does Facebook cause brain damage?

Over dinner with a friend last night, the conversation inevitably turned to Facebook. We both found that we were experiencing the same quizzical phenomenon. When people that we have communicated with over the years quite happily via email/SMS/IM suddenly turn up on Facebook, they seem to frequently adopt this as their communications platform of choice, in many cases forsaking others. What's even more quizzical is that, when I answer a Facebook message (which forwards to my email) from my email account, substituting the sender's real-world email, they often revert to Facebook once again to reply. Not only are people happy to have their communication siloed in a Facebook cloud, they seem downright determined to keep it there.

Tuesday, July 07, 2009

Virtual coffee break - 7 July

Much to do, so here's another collection of semi-random shards.

I should post pictures of distressed street cabinets more often. The response has been good judging from traffic, and one equipment vendor's branch office in Germany seems to have ground to a halt for ten minutes or so this morning. The Flickr photo is up to 79 views and counting...

A few minutes ago I happened to catch the end of the BBC World Service's Digital Planet show, coming from Japan. In addition to an interesting segment on home-made game software, there was a (thankfully audio-only) demonstration of Daiwa House's intelligent toilet technology (what it is about companies with Daiwa in the name?). If Graceland had only been equipped with one of these, we might not be King-less today. Joking aside, I think this illustrates pretty well that the range and number of networkable devices is probably a lot greater than most people think, and should not be poo-pooed.

I recall a couple of years ago, James Murdoch made a speech in which he said something along the lines that if OFCOM were efficient in its mission, its offices would eventually be empty. Seems now that the Conservatives want to help in the packing to speed things along. I guess industry consultants may have to move directly into industry in future without the intermediate tenure with a river view. (Okay, I know a fair number of OFCOM folks and respect the job they're doing, but I couldn't resist.)

The British Chamber of Commerce reckons the worst may be over, but note the five key words: "Talk of recovery is premature." Equity market cheerleaders should listen. Meanwhile, Ireland is apparently (Experian, why are your press releases not linkable?) seeing a net contraction in numbers of businesses, with companies going into receivership nearly quadrupling over H1 2008 levels.

Random thought of the morning. I really like what SamKnows is up to in broadband performance monitoring, but I wonder if it's also possible to achieve some of the same objectives at a more macro level via the massively distributed nodes of existing P2P systems such as BitTorrent or, better yet, Skype?

Lastly, and most importantly, I have a value proposition for you. I am honored to have been asked to be on the advisory board for eComm Europe 2009. (Disclosure: I have no economic interest in eComm or any associated entity, nor am I receiving remuneration of any sort. My advisory role is largely one of kicking around ideas, suggesting speakers and making a few introductions.) I think it's shaping up to be yet another great event. The organizers have kindly extended a 20% discount to EuroTelcoblog readers - the promo code is "Enck" (without the quotation marks, obviously). The Super Early Bird offer expires this month, so book now to avoid disappointment.

Monday, July 06, 2009

It's always the unlikely posts...

My earlier post of the photo of a forlorn Virgin Media street cabinet in East Dulwich has generated a surprising level of traffic, and also an email from someone at Virgin asking where it was. I have responded thus:

"Okay then, as a loyal Virgin Media customer, I am expecting a big discount for helping you to take inventory of your network in the way that your own field technicians can't seem to manage. The box is on what I would call Forest Hill Road, but which may in fact be Peckham Rye Road (no signs - probably stolen by the locals), across from Peckham Rye, near the intersection with Barry Road."

Anyone with access to Google maps should be able to find this - just look for the open cabinet with leaves from last autumn trapped in some dense spider webs. Perhaps the reason they haven't noticed it is that there only seemed to be three or four homes connected (whose addresses I could read clearly on the bright yellow tags attached to the coax).

Let me make clear that I am a loyal and happy Virgin Media customer, but when I see things like this I wonder what the hell is going on. If I ran a highly leveraged company whose only differentiating factor was the quality of its access network versus the crippled, neolithic copper pair of the incumbent, I would be outraged to find a local node a) so exposed to vandalism (which miraculously, the local vandals seem to have been too stupid to commit) and b) so under-booked.

On the positive side, I have posted photos of this nature before and received no response at all from Virgin Media. So maybe this is a positive development. Then again, the node in question is half a mile from my home, so why should I care? What's in it for me? Will the company give me three months free service for my civic-mindedness? I doubt it, but I am open to being surprised. So much for "crowd-sourcing."

Similarly, I suspect that the person who contacted me is probably an underpaid Virgin Media employee with a good heart, who actually deserves to be promoted for caring enough to have eyes open in the first place. Sadly, I suspect that being a conscientious employee at Virgin Media may be an experience similar to being a conscientious employee pretty much anywhere else in cultures (the UK being one) which don't value customer service. Like peeing yourself in a brown suit - it gives you a warm feeling, but no one notices.

The most dilapidated Virgin Media box ever

Wednesday, July 01, 2009

My talk from Manchester last week

Please excuse my appalling Freudian slip, placing Sand Hill Road erroneously in Mountain View rather than Menlo Park. I had Google on the brain. There are a couple of other mindless misstatements here, but on the whole I was pretty pleased with this one (slides are here). Also check out Dirk van der Woude and Benoit Felten - hell, just watch them all!

James Enck @ NextGen09 from MDDA on Vimeo.

Wednesday omnibus

So much to do, so little time. Here is a semi-random selection of bloggables.

Yesterday, I listened in to my friend Benoit Felten's excellent Yankee Group webinar "Fiber to the Home: Making that Business Model Work." Benoit and his colleagues built a high-level, generic model in order to flex the key assumptions (passive connection cost per home, customer uptake, cash margin per customer, ARPU) of the business case and test the impacts on payback periods. Consistent with other business cases I have seen, they found that the greatest sensitivities around payback period were initial passive connection cost and customer uptake levels.

They were up front about the fact that each project will inevitably have unique variables (soil quality/terrain, population density, ratio of MDUs, consumer purchasing power, etc.) which would influence each of the inputs, and consequently payback periods. Which is an obvious and essential point to stress. It's annoying to see sweeping generalizations in the media about the "huge cost" of fiber deployment, because each city, each street, each building, will present its own unique set of challenges and opportunities. In some situations it will make for a robust business case, in others payback will be a long time coming. Them's the breaks - it's physical infrastructure, like it or lump it.

Anyway, it was a good webinar, and I particularly like Benoit's emphasis on wholesale access to third parties. If you're an altnet trying to generate a return on a fiber deployment, and you can only achieve 30% initial uptake on your own retail services, why not open up to third parties? You generate additional revenue and margins in the early days, and if your customer satisfaction levels are superior, you will attract churning customers from the third parties in the long run. Let your wholesale customers do the hard work of converting and educating more risk-averse customers, and then win in the end through being better at customer service. I think it's an idea worthy of investigation, but we haven't seen any examples thus far.

At the more granular end of fiber network planning, my friend Kai Seim in Germany, who can tell you in a heartbeat how the cost per meter to trench fiber can change from one soil type to another (it's infrastructure - the physical world really matters), has published a great study on fiber activities in the German market, which you can purchase here for the nominal fee of €49.90. I have read it, and it's worth every eurocent.

And if you're feeling really gluttonous for market data, check out the OPTA analyst meeting presentation from Monday.

Elsewhere, France Telecom has been busy, joining the refinancing rush, conserving cash through a voluntary partial scrip dividend (I think dividend yields are generally overhyped - if you have genuine conviction on the company's strategy, you should be happy to add more equity exposure rather than suck out more cash during constrained times), and stamping its feet over ARCEP's ruling of last week. I shrug Gallically. Also check out this new presentation from FT on LTE - which once again underlines the backhaul timebomb.

The refinancing stampede continues unabated, with the market more than happy to take part. Word on the street is that Wind's €2.7bn issue is heavily oversubscribed, and SES Global's €650m deal was 5.8x oversubscribed. So much for cash sitting on the sidelines.

Long overdue consolidation in Germany seems to finally be materializing. United Internet/Freenet has been passed by the Cartel Office, the Hansenet auction seems to be moving toward conclusion, and today the FTD reports KDG is interested in another chunk of Orion.

Lastly, and on a down note, I checked out last week's report from Transparency International on corporate anti-corruption practices, and sadly telecom doesn't rank very highly.