EuroTelcoblog

Surprise package

2012-01-16T14:15:00.002Z

I was very pleased to receive these via DHL last Friday - the first high fiber chocolates in history. Thanks to all the good folks at Diffraction Analysis and Tactis!

Misadventures in asset management

2012-01-03T09:23:00.003Z

A belated Happy New Year to whatever vestigial mega-uber value readers may remain out there. I hope 2012 brings you all you wish for, though personally I am trying to keep my wishes humble, in line with the New Austerity zeitgeist.

As with every new year, I begin 2012 with good intentions of blogging more this year. It's not that I have nothing to say - quite the opposite - I am involved in some very interesting things, but sadly almost all of them are bound by strict non-disclosure obligations. Nevertheless, both this humble bloglet and the Memphibian both deserve more attention than they have received in recent months, so I will endeavour to do better.

In terms of telecom, I miraculously made it almost all the way through 2011 without a single catastrophic service provider incident - up until December 30, that is. On that day, my HTC Desire HD handset decided to stop working. Not entirely, but the on/off button stopped responding, meaning that the handset was switched on but I could not activate the touchscreen. At this point I decided to visit an Orange shop to see if they could do anything for me.

Being in The City, I stopped by the Moorgate shop, and the staff helpfully phoned the Orange customer care call centre for me. I spoke to an affable Geordie who was only too happy to order a replacement handset for delivery the next day. I told him that I was not at home, but rather was staying with family in the West End, and I asked if he could arrange delivery to one of the Orange shops on Oxford Street. That, as the old song goes, is when my heartaches began.

The call centre man then asked me if I knew the postcode of the Orange shop where I would like the phone to be sent. Surprised, I answered, "No, just any shop on Oxford Street will be fine." There followed the sound of keyboard tapping, and I asked him if he was Googling for Orange shop locations. His answer was unclear, but after a few seconds he said, "89 Oxford Street." I said that was fine, and we agreed that I could collect my replacement handset there the next morning. I even received a confirmation by SMS.

The next morning, I made my way to the Orange shop at 89 Oxford Street, with only one minor complication - the shop doesn't exist. Wandering down the road to the nearest Orange shop (at 155 - 157, for the record), I asked the puzzled staff if there had ever been an Orange shop at No. 89. It felt a bit like a scene from "It's a Wonderful Life." I explained my predicament, and the friendly and helpful shop assistants put in another call to the mothership.

When I asked how Orange could possibly ship a handset to a non-existent store, the very apologetic customer care person speculated that there must have been a "training issue" in the call centre. She said that the only thing to do was to allow the delivery to fail, then arrange delivery to another store. She then asked me for the postcode of the shop I was calling from. As the situation got more Kafka-esque, it occurred to me that I wasn't sure if I was still under contract with Orange, so I asked. "No, you're not under contract," came the reply.

It was then that the penny dropped. I had visited two Orange shops and spoken to five Orange employees about needing a replacement for a handset which was clearly not the most current vintage, without anyone checking to see if I was a candidate for an upgrade or contract renewal. All the staff were knowledgeable and pleasant, but seemingly no one had the commercial killer instinct to upsell, or at least to try to retain a customer who was likely to be a bit disgruntled over being sent to a shop which only exists in a parallel universe.

The Telco 2.0 team have written a number of very interesting and thought-provoking reports about the plethora of potential incremental revenue opportunities for telcos in unleashing the power of customer data and metadata, but in my sorry tale, the company failed to exploit even the most basic customer data - something which should be a well-established operating routine in such a mature and competitive market.

Then again, confronted with the prospect of more pain, cock-ups, and wasted time in the event that I chose to leave Orange in protest, I knuckled under and renewed my contract, and I am now the proud and satisfied owner of an HTC Sensation. Maybe inertia trumps metadata and processes...

Nothing really matters, anyone can see, nothing really matters but FTTP

2011-10-28T10:53:00.005+01:00

That's an appalling musical reference, but sadly it's the only tie-in I can think of to announce that I will be presenting at the FTTH Forum in Budapest on 9th November. (Edit: Okay, it's Friday at the end of a long week, and I conflated "Hungarian Rhapsody" with "Bohemian Rhapsody." My bad. In retrospect, perhaps I should have tried to invoke Ligeti's "Lux Aeterna.") My talk will broadly cover some of the points I raised here, but I'll mainly focus on CityFibre's strategy around a holistic view of fibre across an entire community, with buy-in from local government as the key bedrock upon which other developments rest. Our recent project in York is a compelling example of how this can work to create tremendous optionality for all stakeholders.

I'll also be speaking at the NextGen conference in Bristol on 15th November, covering broadly the same ground, but also revisiting some of the themes I covered in my previous NextGen appearance in Manchester two years ago (slides). As I tried to stress then, I expect there may be a large gap between the perceived value of fibre today (i.e., the tiresome "it's a better triple play") versus the "option value" of fibre as an enabler of applications and services we haven't even dreamt of yet.

As I've stated numerous times over the years, the flaw in the current structure of the "telecom industry" is that conventional telcos, as constituted today, will find it impossible to capture the benefits of those developments in a way which translates directly into "shareholder value." As such, they have limited incentive to invest in enabling the benefits of such innovation across an entire community. Ergo, I would argue that a strategy focused on "stakeholder value" is the appropriate framework for moving forward. Call it "A Unified Theory of Fibre."

If you're planning on being at either event, by all means stop by and say hello.

Joining the Rainbow Revolution

2011-07-06T09:34:00.002+01:00

In a recent post, I alluded vaguely to my involvement in activities which aim to speed the delivery of fiber access in a couple of countries. One of those is the UK, where I am happy to say that over the past two months I have become a foot soldier in what I am tempted to call the UK's Rainbow Revolution.

Beyond the most obvious evocation of the visible light spectrum as conveyed by optical fiber, the name also highlights the sad truth that many in the country have long been dreaming, mostly in vain, of a place, somewhere over the rainbow, where we someday find ourselves with broadband infrastructure which is something more than "just good enough."

Most pertinently, I like the name because, just as the rainbow is a spectrum of different colors, each with its own character and place in the broader palette, what I see taking shape in the UK fiber market (at long last) is a range of players, all broadly in pursuit of the same goals, but operating in very different parts of the spectrum.

For my own part, I am now devoting pretty much all my time to corporate development work with CityFibre Holdings. The term "corporate development" is probably overly vague to most people, but my role involves a number of aspects, including business and commercial strategy, service provider relations, vendor relations, financial market relations, as well as collaboration with pretty much every part of the business. It is fascinating and enjoyable, and Greg and Mark have assembled a team and investor group which is a genuine pleasure to work with. We are currently in the middle of a re-branding process, but suffice it to say that we will be much more visible in the coming months as we unveil our plans.

In the course of analyzing the market and how it is (finally) changing, I have been fortunate to come into contact with some of the other emerging players in the space. I have met Boris and Dana from Hyperoptic, who are hugely impressive and have a really interesting business model for deploying fiber in high-density MDUs, which I guess I would describe as "hyper-local." At the other end of the rural-urban spectrum is Matthew Hare and his equally impressive, equally hyper-local Gigaclear. I think both of these companies are very well-placed to succeed in their respective market segments. What has surprised me in studying their approaches, and it speaks volumes about the early state of development of the UK market, is that there are no visible competitors to them in their chosen niches.

And just this morning, we see the arrival of a new entity to the market, BroadwayPartners. Led by the tireless and talented Adrian Wooster and supported by an equally-talented team (each of whom I have met in various contexts), it looks to me, as a total outsider, as though they are harnessing the network of interest built around INCA's important demand aggregation efforts to a corporate structure which can plan, finance and implement projects in conjunction with local (presumably rural) communities. Based on my observations, this is a critical element which has been missing at the local level, and I think the market can only benefit from the arrival of such an entity.

I am also keen to learn more about their plans for a national investment fund. This is the sort of development I have discussed with people in a number of countries, but so far this concept has remained just that, with one notable exception. I'm more than pleased to see someone rising to the challenge in the UK, and this alone is a pretty good measure of how things are changing. The gauntlet is now being laid at the feet of the investment community, and I think the opportunity is huge.

INCA's Malcolm Corbett has a graphic he uses in presentations, which we have appropriated (with his blessing) for our own slide deck, which shows a "fund-raising thermometer" of the kind you might see on the wall of a church or in the hall of a school, to track progress towards a funding goal. Taking the "worst case" (which I think might still be on the optimistic side) from Analysys-Mason's work on behalf of the Broadband Stakeholder Group, and mapping this against the total of investment publicly "committed" by BT, Fujitsu and BDUK, we only have visibility on perhaps 1/6 of the capital required to take us "over the rainbow."

To quote the Chancellor of the Exchequer (as inspired by "High School Musical," apparently), "We're all in this together." BT's balance sheet can't carry the entire project. Virgin Media is 3.7x levered on an LQA basis, suggesting it will remain constrained, at least in terms of major infrastructure projects such as required here. There is a yawning funding gap to be bridged, and the only response I can see, apart from giving up and resigning ourselves and our descendants to inferior infrastructure, is for the investment community and the talented people capable of successfully deploying infrastructure to get busy and get on with realizing this opportunity.

Which is what I finally, after years of frustration, see happening around me and in my own working life.

None of this is to denigrate or ignore in any way the early efforts of local entrepreneurs, activists and visionaries across the country. To the contrary, in my view, it is only pressure from the edge which promotes awareness of the opportunity and catalyses broader action. So, thanks to all of you. I've seen many false dawns in my long involvement in telecom, but this feels like something new and positive. I'm tempted to say that the train is ready for departure.

Bad telecom metaphors in religious propaganda, part 1

2011-06-04T13:06:00.003+01:00

From what I remember of my early years Sunday School experience, I think they really mean "upload," surely. But my burning questions are: is there traffic shaping or throttling involved, what's my SLA in the event of a network outage, and does the Almighty's Skynet operate at the same frustratingly slow speeds and high levels of asymmetry that we suffer down here on Earth? If not, maybe He can help us sort out our broadband infrastructure problems.

Jump

2011-06-02T23:22:00.003+01:00

In the age of the ubiquitous cameraphone, there is a lot of nonsense and noise, but sometimes even fairly mundane situations provide us with priceless opportunities to document profound unintended irony. Close examination of the placard below the larger picture shows that the text states "Orange fire evacuation procedure for meeting rooms." This made my day.

Fiber envy

2011-05-24T12:34:00.002+01:00

Hats off to friend and colleague Herman Wagter (and Dirk van der Woude, who makes a cameo appearance via video conference link) for this recent appearance on PBS' "Need to Know" program. I couldn't agree more with the views he expresses here. It's a powerful measure of the sense of frustration experienced by broadband consumers in the US that PBS would see a case for viewing the UK as a success story based on more competition and lower prices, while, conversely, many I know in the UK would gladly pay more for a better product. You get what you invest in.

Watch the full episode. See more Need To Know.

Welcome to the gig time

2011-05-23T16:26:00.004+01:00

Enfant terrible HKBN's press release today heralding 10,000 users of its 1Gbps service started me riffing on "catchy" marketing tag lines for a one gig service:

"Think gig"
"Gagging for a gig"
"Go to work on a gig"
"Gigs might fly"
"Welcome to the gig time"
"The gig chill"
"The gig bang"
"The Gig Society"

Feel free to join in...

What ever happened to...?

2011-05-04T12:05:00.004+01:00

My friend and eComm founder, Lee Dryburgh, recently made a very brave post, in which he sought to explain the personal background to his recent relative inactivity. It makes for tough reading, and it's not the sort of thing many people would be comfortable publishing into the wide world, but Lee's no ordinary guy, and I admire him tremendously for writing it.

It made me think that perhaps I should also attempt to explain my neglect of this blog and its (probably) declining, but loyal, readership. It's not that I don't love you all - it's just that life has been challenging over the past three years.

In summer 2008, my seemingly promising career was disrupted by the unravelling of Merrill Lynch. My role in the PCG principal investing unit was all about developing new investment opportunities, but with c.$10bn in (mostly) illiquid assets across its various principal investing groups, the Thundering Herd was obviously going to be in run-off mode (things obviously got much worse from there), so onto the street I went. At the time, I put a brave face on it, saying that I needed "THE job," not "A job."

This was a nice sentiment, but hugely overly optimistic, as I soon discovered through spending nearly two years engaged in an effort to launch a new fund. When we began, it seemed unthinkable that investors would not be falling over one another to back such a high-quality team, but for whatever reason, we struggled terribly. In retrospect, I should have left at the end of 2009, when the cash burn was still just about bearable, but I believed in the people and the proposition. Most of all, I believed I was doing the best thing to secure my family's financial situation in the long run - after all, I was a founding partner in a fund which was bound for greatness, right? Ultimately, as the launch date approached, it became clear that the economics were not going to be anything like what I had assumed. After two years of cash burn, rather than committing to something punitive which would have made me unhappy from day one, I decided to walk away. This was an extremely difficult choice to take, and it was an embittering experience, but I determined that I would be better off taking my chances alone.

During all this process, my marriage collapsed in August 2009, with all the pain, regret, disruption and stress unavoidable in such a situation, especially where young children are involved. I moved out, we sold our home, all very devastating stuff. As these things go, I think it has worked out about as well as one could hope, but it's been extremely tough for everyone, and one can never be absolutely sure whether the course taken was really the best one. I guess our kids will give us some idea when they're much older.

Beyond the emotional trials of all the above, it has genuinely been financially devastating. I had to laugh a couple of years back, when Andy Abramson referred to me in a post as "Mr. Money," or something along those lines. "If they only knew." Without the support of family and friends along the way, I'm not at all sure where I would be today. This kind of crisis also allows one to separate true friends from those who fall into other categories. Unsurprisingly, I now consider myself to have far fewer friends.

So, leaving the fund in December last year, I had to confront the lack of a Plan A, and began having interviews with various parts of the financial world. Unfortunately, these have largely consisted of time-wasters and boneheads: a team looking to recruit a TMT specialist with a lot of experience, who ultimately determined that my focus would be "too narrow," an accusation I have never encountered before (typically, it's just the opposite); an aggressive Etonian hedge fund analyst who laughingly dismissed credit analysis as an irrelevant exercise for equities analysts; the inevitable stupid questions about whether or not I still have a "franchise" as an equities analyst. Maybe my CV is just too odd, or maybe I'm too experienced, but so far there have been no obvious routes back into the finance arena.

Hard as these years have been, I wouldn't want to give the impression that I view them as a lost cause. Many valuable lessons have been learned. I've rediscovered some interests I had neglected previously. I have played a significant part in the recording of what I think is a truly great album. I have reunited with old friends to play music live. I have realized a long-held plan to create a purely personal blog with a focus on music and associated recollections. I have learned a lot about myself and human nature. My children have grown beautifully. The sun is shining today, and I am still alive.

Fortunately, my advisory/consulting activities have also heated up since the start of the year, and I'm involved in some really interesting projects, all around bringing fiber to market faster in countries where it has been woefully underdeveloped to date. Hopefully, I will be able to write about some of these explicitly in the future, but for now I can't really share any details. As we approach the third anniversary of life derailment, things feel as though they're finally starting to turn around.

So that's it in a nutshell. I often haven't felt like updating this blog, have been otherwise distracted, or have had something interesting to write about which I couldn't write for commercial reasons. I will work to rectify this situation, but probably only when I feel there is something genuinely interesting to say. There is far too much noise in the world, and not enough meaning.

Finally, so this doesn't end up as a purely self-indulgent exercise, have a look (if you haven't already seen it) at the announcement by KPN of its acquisition of cable company Caiway earlier this week. This is another typically market-leading step by the Dutch in the development of alternative approaches for funding fiber infrastructure: KPN commits to open-access as a network opco, but the passive network assets remain in the hands of the Common Infrastructure Fund. Thus, the long-term money aligns itself with assets whose return horizons match its own obligations, and strips out the service provision layer and customer relationships. KPN immediately gets access to incremental infrastructure without having to build or own it. Mark my words, in the long march to a fiber future, we are going to see much more of this. I just wish there were more infrastructure investors with the vision which CIF seems to possess.

Onward!

Who said there ain't no free?

2011-02-24T16:47:00.003Z

On the off chance that you haven't seen this mentioned elsewhere, drop whatever it is you're doing and head over to the Diffraction Analysis site to claim your free copy of "A World of Fiber," penned by my friend and associate Benoit Felten, a.k.a. "The Godfiber." Hurry while supplies last!

Wednesday wondering

2011-01-26T11:10:00.002Z

I know there are a lot of sell-side analysts, buy-side analysts, fund managers, industry analysts, consultants, IR and PR people who read this humble bloglet, and I would like to ask for your valued feedback on a question. Across the broad TMT supersector in Europe, which companies do you think have the best IR/PR/analyst relations functions, and why? Conversely, which have the worst, and why? I value your views and guarantee complete confidentiality. So, hollah at me!

Tuesday trivia - Thomas Watson on the development of the telephone

2011-01-25T13:12:00.002Z

Reel 1

Reel 2

Monday ramblings

2011-01-24T14:07:00.003Z

I've got plans for a couple of more substantive posts, but until those materialize, I may content myself with sporadic and short, quasi-Tweet output.

If you're a European interested in broadband, and you want to depress yourself beyond what you might normally expect from a Monday in January, then check out the latest update to the reliably humbling Akamai State of the Internet Report, just out today (registration required). If you consult the ranking of the world's 100 fastest cities by average connection speed on page 12, you'll see that you have to read down to number 48 before finding a non-Asian name, and even then it's a Romanian city. (I'm curious to see Hong Kong listed as number 46, with an average speed of 8.9Mbps. Given that fiber purist City Telecom has c.25% of the broadband market, and fiber offerings from competitors in the market are of similar scale (combined), this seems to imply that the DSL and cable customers in the market are getting pretty dismal throughput.) Also of interest will be the mobile statistics on pages 28 - 29, particularly the observation that just over one-third of mobile networks monitored saw content consumption double YoY in Q3 2010.

The United Colors of Diffraction Analysis

2011-01-18T12:40:00.002Z

If there's one thing of significance that I can point to about this humble bloglet, it's that, once upon a time, it was a relatively ground-breaking thing, and as such, it apparently inspired others to launch their own. Or, at least, so I am told by some of those who did.

I remember an email exchange, I think on a Friday, with Benoit Felten, in which I urged him to start his own blog, and sure enough, the following Monday, Fiberevolution was born. Prior to this, he and I had been in touch for a number of years, kicking all-things-fiber back and forth via email, and he provided me with a number of insights which ended up in the pages of this blog. So, for me Fiberevolution was, in fact, a very natural evolution whereby Benoit emerged to meet the gaze of the public eye. His success in building the site into a trusted and credible brand within the industry has been little short of stunning.

One inherent trait of evolution is that it is perpetual, never-ending. As you may have heard already, Benoit has now taken his evolutionary journey to the next stage, establishing his own business dedicated to NGA research and consulting, Diffraction Analysis. I'm excited for him, as a friend and a respected colleague, and I have no doubt that it is destined for great things.

I'm also hugely gratified that he has chosen me to be an associate in this effort, alongside two other people I hold in very high regard, Herman Wagter and Costas Troulos. Thus, we start life as an Anglo-American/Dutch/French/Greek mash-up, with equally disparate backgrounds and areas of interest, but all unified under our shared interest in the fiber access (r)evolution and all the change that it may engender.

We'll all be at the FTTH Council event in Milan, and I'll hope to see you there.

Monday morning levity

2011-01-10T10:42:00.002Z

I've posted both of these to Facebook previously, and no doubt some of you will have seen them before, but it's approaching 11:00 AM on Monday morning, so I reckon you could probably use a harmless laugh or two by now.

First, Steve Mobs of Mapple, addressing the faithful:

Secondly, Ronnie Corbett, from his Christmas special, with Harry Enfield standing in for the late Ronnie Barker:

7:35 of sanity on "Mad Money"

2011-01-09T12:46:00.004Z

I have followed the City Telecom story with a great deal of interest for many years, and have been fortunate to get to know NiQ Lai and to visit the company to see how it works. So I was pleased to stumble across this interview with Jim Cramer from late last year, following the release of the company's 2010 results - in which it blew the lights out. Cramer is a bit confused at a couple of points, but NiQ handles him graciously and is given the space to make his case very well. No sci-fi bullshit, no delusions of content-aggregation grandeur. Rather, an overtly stated love of over-the-top services, and an admission that offering the "fattest, dumbest pipe in town" is "kinda boring, but profitable." By the end of this year the company will end a decade-long build-out in Hong Kong, which appears ingenious in retrospect, but at the time it commenced, was well wide of industry consensus, and considered a suicidal act by some. The stock is nearly a "ten-bagger" over five years. Yet more proof, if it were needed, that consensus is often wrong.

The best is yet to come

2010-12-31T16:45:00.001Z

Or something like that. Happy New Year from EuroTelcoblog. See you in 2011, and yes, that includes you, persistent comment spammers!

All I want for Christmas is...

2010-12-10T20:16:00.003Z

After two years, I have now left the mCAPITAL project. I wish the team success with their imminent launch.

As for next steps, I have a number of irons in a number of fires, but I am also a big believer in crowd-sourcing, so if you, dear reader, have any suggestions, opportunities or propositions in mind, I am very happy to listen.

Happy Holidays from EuroTelcoblog

2010-12-10T17:24:00.001Z

BT Infinity, to the 'hood and beyond!

2010-12-09T10:50:00.004Z

While walking around my neighborhood in the past couple of days, I've seen signs that the good people of Greater Dulwich are heading for Infinity. The first I noticed is on Townley Road, along the fence surrounding Alleyn's School. No doubt the local kids will find the added bandwidth advantageous in videoconference interviews for those precious places at Oxbridge. Future members of the elite should not suffer undue latency.

The second is on Upland Road, just a few meters up the road from my humble hovel, and only about 500 meters from the local BT exchange. Still, I can practically reach out the window and touch the Virgin Media cabinet I am connected to, so I see no incentive to consider switching, at least until it is real FTTH. By which time, no doubt, I will be in a nursing home.

So the next time you're passing through SE22, you might just catch sight of a mysterious white horse wandering inexplicably through shafts of light cascading from the heavens, as people of all ages, classes and races smile approvingly. Surely this is the biggest buzz since currency decimilization, or the introduction of the banana.

Absence of Persuasive Incentive

2010-11-29T10:29:00.003Z

As I monitored the intermittent tweetstream from the Telco 2.0 event earlier this month in London, one exchange between attendees caught my eye. One tweeter posited, "Are telcos still mainly driven by fear?" to which another responded, "Gone beyond fear - into risk avoidance because of job insecurity." I initially thought about writing this post upon reading this exchange, but got bogged down with other projects. Then a couple of weeks later Benoit Felten suggested he was generally on the same wavelength, and this prompted further reflection.

I, and a great many others, have pilloried or mocked the industry over the years for what seem to be inherent and persistent cultural or structural inhibitors to innovation. At times I have questioned whether it was even worth the effort for telcos to try to innovate on the services front (as I stated in point nine here), given my view that their true source of cash generation is infrastructure, with their retail units merely another end customer (albeit typically the largest) for their genuinely profitable wholesale services.

Contrary to impressions some may have, based on bland conference presentations, telcos are actually populated and managed by human beings, and what I have lamentably failed to consider over the years is the influence of the basic element of human self-interest in defining their behavior. In other words, what incentives do the people inside telcos and their shareholders actually have to promote change? I'm coming to the conclusion that in this question lies the key to the issue - while pretty much everyone I know in the industry would acknowledge a need to promote change and innovation for its long-term health, there stands in the way a problematic "telco API" (Absence of Persuasive Incentive), which leads to inertia. And viewed through the lens of human self-interest, I think this is an entirely reasonable reaction.

Consider, for example, the lack of alignment between radical thinking and investor conservatism. Investors on the whole view incumbent telcos in mature markets as reliable sources of cash, like utility businesses. As an extreme example, France Telecom's dividend yield is currently 8.7%, and having just pledged to maintain the dividend at the current level of EUR1.40 for three years (from which the French government stands to collect EUR1bn per year), it is hard to see the company backing away from this. So as, say, a pension fund portfolio manager, you have a company with a reliable dividend yield higher than some of the yields on offer in the "high yield" bond space at the moment, theoretically with lower risk, so why wouldn't you want to own it? And why would you encourage the management to do something which might put that at risk, particularly if you have limited confidence in them to actually execute it? So you urge them to just keep doing what they do, better, with fewer people, and to hand over any excess cash to you, because you can invest it more efficiently than they can. I think this is a fair representation of the general attitude of institutional investors, like it or not, and I can't find many flaws with this argument on the whole, taking their position into account. They have a fiduciary duty to allocate capital among different sectors, and if they see what they regard as reckless or irrational behavior in one sector, they will put money elsewhere. So from their perspective, "If it ain't broke, don't try to fix it." That doesn't mean they don't acknowledge the longer term risks to the industry, but they are charged with protecting people's pension money in the near term and adapting to change longer term, so when they see an industry capable of pumping out this much cash for now through maintaining the status quo, they will hardly demand change which increases risk.

Even if there were a consensus from shareholders of a need for urgent action, some of the projects involved would no doubt require continuity of management over the long term (e.g., a truly committed FTTH strategy is at least a 10-year project in countries of any significant size). Contrast this with the reality among telcos - data from the US in 2009 shows that C-level IT execs in telecom have the shortest life-span of any industry, at 4.7 years, and my experience with Europe suggests the same is true here. Think about the incumbents you know, and count how many people in senior positions in 2002/3 are still there now (indeed, in 2004 the telco CEO lifespan was four years). Just thinking of the companies I have covered in my career, I would put the average tenure at under five years, and in many cases more like three. So if you're one of these people, under pressure to stabilize cash flows and satisfy your shareholders, just from the standpoint of human self-interest, what incentive do you have to promote radical change, the effects of which you know you will never be around to see or be rewarded for? If you have four years to make an impact, and a choice between investing in an emerging segment with perhaps undefined revenue opportunities (M2M, cloud, smart grid) and an OSS/BSS overhaul which you are fairly confident will lower costs against a flat/declining revenue line, I think I can guess which choice you will make. Play the game, pull down that bonus, and work on your post-exit strategy.

So the executive suite has a revolving door, the organizational chart is written in pencil, corporate governance guidelines ensure short tenures for board members, and investors on the whole don't want to derail the gravy train in the short term as they regularly reassess the long-term prospects. Arguably none of the key stakeholders is truly incentivized to look beyond the five-year time frame, perhaps with the exception of the rank-and-file employees who hope to retire with a pension, and the pension trustees themselves.

I had lunch recently with a very bright friend who has done a lot of work on the publishing industry and its attempts to get to grips with reinvention in a crater-scarred landscape of paywalls, e-readers, iPads, and smartphone apps. His platinum comment was along the lines of, "The discussion about transformation only got serious once managements were confronted with having to sack 70% of the newsroom." By which time, presumably, it is very late in the day. However, for a "beleaguered" telecom industry wherein a company like France Telecom can generate enough cash to commit to a EUR3.7bn dividend for the next three years while still having flexibility to invest in infrastructure and engage in M&A, that day still looks very far off indeed.

I, for one, feel as though my error has been in wanting too much from the telco, expecting it to react to a long-term threat with a quantum leap, when in fact, I now see, it has limited incentive to acknowledge or address anything more than a need for cautious incremental change and adaptation. I will cut it some slack in future. After all, it's only human.

The reports of my death have been greatly exaggerated

2010-11-05T16:37:00.003Z

Turn off your mind, relax, and float downstream to the good old, bad old days. October 4, 2006 - day one of the first-ever Telco 2.0 event. I was honored with the opening presentation, as "analyst in residence" for day one. In the presentations which followed, Abdul Guefor from Intel Capital further piled on the agony, highlighting some of the cultural and structural issues which hamstrung telco transformation, and warning, "If you don't address these issues, Private Equity will." An icy sense of dread enveloped the room, and the already-battered audience shook its collective head in pained recognition of the inevitable. And we were still at least an hour from the first coffee break.

"Private Equity" - two words which could inspire fear in the most self-assured telco management teams in 2006. The elephant in the room, wielding in its well-fed trunk a Sword of Damocles over the head of an industry still in therapy from the near-death experiences of the tech implosion. Anything was possible, nothing was unthinkable, even the unthinkable.

And the unthinkable continued a few months longer, until the credit market began to seize up, and the inevitable populist backlash began. Previously feared and respected, PE was now vilified, pilloried, and dragged before Parliament to explain itself. Schadenfreude gushed forth as access to LBO financing ran dry. The dreaded PE juggernaut found itself neutered, and the angry masses danced in the streets.

Well, not exactly, and not for long. As the quaintly named "credit crunch" (God, I cannot hate this phrase enough) intensified into a bona fide financial crisis, evil, greedy PE was replaced in the stocks by investment banks, financial regulators, hedge funds and politicians, to be taunted by village idiots and the swelling ranks of those who had miraculously become experts on financial markets overnight (and who, of course, had never fudged a self-cert mortgage or exploited equity release to buy a nicer car).

The perceived atrocities of PE were downgraded to misdemeanors, and the world moved on. With no access to finance, they could do no more harm, and anyway, their over-leveraged investments, apparently justified on champagne-and-Ferrari-fume-fuelled delusional assumptions of recurring access to refinancing, were doomed in this new era.

Well, that was the consensus view, but it's interesting to take note of a few recent developments in the telco space which suggest that the consensus was, once again, wrong. To be sure, there have been a few situations where things have gone spectacularly wrong. But there are a number of situations where things appear to have gone much better than anyone would have ever expected, particularly given the macro headwinds.

For example, German cable, an industry strewn with the corpses of investors who previously tried to improve competitiveness, has come of age and produced returns for PE sponsors. BC Partners and Apollo built a great business in Unitymedia, and were well down the road to an IPO when they opted instead to sell to Mr. Malone for 7.7x LQA EBITDA. The other German cable behemoth, Kabel Deutschland (KDG, an early 2006 secondary LBO by Providence Equity, which bought out partners Apax and Goldman Sachs) this year has successfully pushed out maturities on debt, defied market jitters by getting an IPO away, followed with a secondary private placement, and just this week, asked senior lenders to give the company greater flexibility in refinancing debt and paying dividends to shareholders. The last point is crucial - as the company approaches its target leverage levels, the sponsors want the flexibility to refinance more expensive junior tranches of debt and take cash out of the business in dividends, on the basis that the capital structure of the business will be self-sustaining. In summary, the PE sponsors have generated nearly EUR1.2bn in gross proceeds this year from sales of shares, and are now opening the door to a future dividend stream. I don't know what it's like to be a KDG customer or employee, but as an outside observer, this looks to me like pretty much the way LBOs are meant to work out. The sponsors have seen a partial exit, and minority shareholders are pretty well aligned with the sponsors' interests. The stock is up 50% since the March IPO (most of that since August), while Deutsche Telekom has managed only a 3.9% gain. I can think of far worse outcomes.

Or take Dutch cable company Ziggo, an early 2006 LBO by Warburg Pincus and Cinven, which many (yours included) dismissed at the time, given the 7.5x leverage the business was carrying. This year the company has joined the refinancing frenzy, placing EUR1.2bn in senior notes in April, at an 8.125% yield, and then returning in October for a EUR500m offering of senior secured notes, which was upsized to EUR750m due to demand, and priced at a cheeky 6.125% yield. Net leverage was down to 4.7x in the September quarter, so not entirely out of the woods yet, but very close to the level of debt UPC carries today as a matter of policy, with no adverse effects. The business itself continues to perform well, so presumably the next major milestone is an IPO, as the sponsors have now been in the asset for nearly five years.

Or how about TDC, still the largest incumbent telco to ever have been the subject of an LBO, and a flashpoint for criticism as well as various predictions of failure? I will hold up my hand and say that Denmark, one of the toughest markets in Europe, would not have been my first choice of target markets in 2005, and I was one of many who expected the company to have its lunch eaten by the rise of FTTH deployments by local utilities. Well, it's the job of the incumbent to play the long game, and TDC did this by allowing the challenger to fail, picking up assets in the process. The sponsors also commenced the dismantling of TDC's international mini-empire, which developed during the era when Ameritech controlled the company. Proceeds from this process are to be applied to further de-leveraging the company, which is apparently on the runway for IPO, and eventually a return to the ranks of investment-grade companies. I wish there were some Danish proverb I could quote about a vulture giving birth to a phoenix, but I don't expect it exists, and my Danish is very poor in any event.

Or what about beleaguered Spanish cable company ONO? Here is a company which every member of the distressed investing and restructuring community in Europe fully expected to end up in a debt restructuring in late 2009 or sometime in 2010. Of course, however, debt restructurings mean lending banks take write-offs/haircuts and end up owning assets they don't want to have to actively manage, like Spanish cable companies. So ultimately, ONO managed to pull off a forward start agreement with lenders, returning to the market to refinance in October with a EUR500m senior secured offering, which was up-sized to EUR700m (do you see a pattern here?), and priced inside 9%. That's one helluva comeback for a company which in mid-2009 saw its CDS trading in line with that of WIND Hellas - revealing similar expectations at the time for two companies which have subsequently seen very different outcomes. Apparently ONO's chairman was quoted by Expansion last week as saying the company would look to IPO when market conditions permit.

Hell, we've even seen the return of the dividend deal, which gives everyone in the credit market an uneasy sense of deja vu, but apparently not enough to keep them from joining in. Asian undersea cable operator and data center hopeful Pacnet last week closed a $300m senior secured bond offering priced at par with a 9.125% coupon. $100m of the proceeds are earmarked for a dividend to shareholders Ashmore, Spinnaker and Clearwater, typically something which bond investors frown on, but I understand that the deal was 2x covered at mid-week, with demand from Asia alone covering 80% of the announced deal size. Eventually it ended up 5x oversubscribed. And this is for a single-B-rated company (albeit a good one, I think) in a sector where investors have a large store of really terrible memories.

These are but a few examples of how things have gone right so far for PE investments in our beloved telco space, and I am not making any value judgements here about the PE industry, its tactics, or its ethics. It is full of smart people, and intelligence is a large part of survival, but in this case, I think it has also gotten lucky. "Lucky" in the sense that the popularity of the high yield market seems to have attracted a significant participation from non-traditional participants, many of whom will need to put money to work and are more interested in income than they are worried about short-term market risk or the yield compression in new deals which many of the rest of us have found so disturbing this year. In other words, there is a wall of money which seems to chase any deal which comes to market, and if you're a PE sponsor looking to refinance, it's a nice problem to have people queueing up to hand you money, sometimes even more than you asked for in the first place.

While I don't expect a return to the Golden Age of the telco mega-LBO any time soon, if ever, it does seem that finance is available for the right types of assets, and I expect PE to continue to be more visibly active. For one thing, as the examples highlighted above suggest, the 2006/7 era deals are moving into their fourth or fifth year, and the sponsors must surely be feeling pressure to generate liquidity events of some sort, or at least to put the building blocks in place. It's also important to recall that some of the funds raised in 2006 and 2007 are still nowhere near being fully invested, so there must also be mounting pressure to put money to work in new deals. Nor is it the case that inflows to the space have totally stopped since, though the climate is obviously more challenging.

So where should we expect new activity to come from? I think there may be three broad categories:

1) I think it may be of fairly limited impact in the telco space, but the trend towards secondary buy-outs (welcome to the FT paywall) may turn up some deals, as companies increasingly look to deploy older vintage capital;

2) Deals driven by a desire to augment the value of existing portfolio companies, one example being Silverlake's presence in the Skype acquisition, which has given rise to a partnership with legacy investment Avaya. Trying to predict where and why these occur will take careful analysis of existing PE/venture portfolios and a detailed matrix of good matches;

3) New deals, with a focus on strategic enablers, not the "big game" network LBOs of the past. I was intrigued by the two deals Carlyle announced last week, the acquisitions of CommScope and Syniverse. The former is a key infrastructure solutions provider to some interesting subsegments including wireless, fiber, cable, and data centers, while the latter is a key enabler of mobile roaming services and datamining for telcos. Maybe I'm reading too much into these deals, but it looks to me as if, rather than following the playbook of buying up network assets and sweating them, Carlyle seems to be working from an industry matrix which points it towards companies active in defensible strategic choke points. Which is an approach I like.

So welcome back Private Equity, you make life more interesting and keep us common folk on our toes!

And now a word from our sponsor

2010-10-28T10:50:00.002+01:00

As targeted SEO spam goes, this message, received today, ranks pretty poorly. However, it gives me an opportunity to point out that I am in fact available for consulting/analytical engagements and advisory roles. As we say down south, "Hollah at me!"

Proposal for http://eurotelcoblog.blogspot.com

Dear Webmaster,

My name is Sherry, and my company Topspot-Promotions represents online sport sites in various domains. We are looking at reputable sites to offer them profitable opportunities to help promote some of my clients sites.

We would like to know if you are interested in working with us on this. For further details please don't hesitate to contact me.

Cheers,
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Business Development Department

Low Tescosterone

2010-10-26T19:31:00.007+01:00

I've been seeing this ad on TV for the past few days, and I thought I'd share it with mega-uber value readers everywhere. In case you aren't acquainted with it, Tesco is a highly successful UK-based chain of supermarkets/superstores, with operations in many other countries. For some, the company represents a vampire squid on the face of UK retailing, and to others, a textbook example of masterful site acquisition and marketing genius (Tesco's ground-breaking loyalty card/data-mining approach can now be found in many walks of life in the UK, and is almost as prevalent as CCTV!).

Love them or hate them, they are typically very good at what they do, and one thing they have been doing for over five years now is running an MVNO in the UK. The network now has 2.3m subs, and is branching, with some success, into the contract segment from an historical pre-pay focus. So, with that background, here the company takes good-humored aim at the inflated egos on display among telcos when it comes to branding and brand extension. (This is particularly interesting/ironic as Tesco's long-standing CEO, Sir Terry Leahy, succeeded mentor Lord MacLaurin, who was chairman of Vodafone during its period of frenzied international expansion and global re-branding of local subsidiaries.)

Anyway, it's all good fun, but with a relevant and fairly obvious point which must be a source of discomfort for UK telcos. The Tesco customer regularly interacts with physical manifestations of the Tesco brand and its values: its stores, its staff, its carparks. Tesco is literally something the customer can get his teeth into, and while in the carefully-structured cocoon of its stores, Tesco can get under the skin of the customer - guiding, manipulating, gaming, and, yes, rewarding. In contrast, the telco customer experience of an operator's brand is almost an entirely abstract and barren affair, most tangibly measured in the relative indifference/ineptness of call center staff. No wonder there is an almost desperate sense of need evident in the branding/sponsorship activities of telcos.

Not for our beloved Tesco Mobile. No such self-esteem problem or delusions of grandeur in evidence here. Just rewards for customers via the "real world" brand, delivered with appreciation - a virtuous circle reinforced. Masterful. It will be a warm day in December before we see BT Group or Virgin Media rewarding customers with Christmas turkeys, though in this time of austerity, that might be just the strategy which would resonate. Members of the Dumb Pipe Taliban Gospel Choir, chime in, "Leave the retailing to the retailers."

Git your st00pid on

2010-10-15T11:39:00.006+01:00

Catching up on some long overdue blog-reading, I stumbled across David Beckemeyer's interesting post of September 25. I tried using his own redirect link, as well as bit.ly, to post a link to Facebook, but both times I was greeted with the following error message:

"This message contains blocked content that has previously been flagged as abusive or spammy."

I'm hardly surprised that Facebook considers openbook to be abusive, given that openbook is simply using a Facebook API to reveal the portion of its user base which has failed to activate security properly. Then again, given some of the fantastically low I.Q.'s on display (type in the drug reference, racist hate speech, or sexual buzzword of your choice, and watch the st00pid flow), one could also argue that this group of users constitutes a special needs group who should be given assistance (preferably in txt spch, innit) to tweak their settings.

No matter how you slice it, it ain't pretty, and I am most disturbed, though not surprised, to see that Facebook seems to probe and index even shortened URLs embedded in status posts before they are even posted. I'm sure Mr. Z would argue that he's trying to protect us from ourselves, and while I'm pretty good at that on my own, it seems clear that many FB users are incapable of, or uninterested in, really protecting themselves. I assume law enforcement, potential employers, and the intelligence services of a number of less-enlightened countries take a keen interest in the effluent revealed here. The next test comes in a moment, when, after I publish here, I attempt to post this link to my own FB page. Let's see how far the probing extends...

UPDATE: I was able to post a link to this to my wall, so it would seem that there is no sophisticated indexing of the target page going on here, given that the post contains two separate links to openbook. Still, I'm curious to see how the situation evolves over time. I'm probably being paranoid, but, as the old adage states, "Just because you're paranoid, it doesn't mean that Facebook is not out to get you."

Here's one for folk who can't do maths

2010-10-14T10:32:00.001+01:00

Where on earth would you store them all?

All aboard!

2010-10-12T13:51:00.002+01:00

Just a moment ago I tried to view the NetRoadshow presentation in support of ONO's senior secured bond issue using Chrome, my browser of choice, and received this message:

Browser Alert

In order to view NetRoadshow presentations, you must use one of the following browser versions on a Windows operating system:

Microsoft Internet Explorer 5.0 or higher, or
Mozilla Firefox 1.0 or higher
Netscape Navigator 7.1 or higher

Please try logging in again with one of the browsers listed above. If you are in a corporate environment and don't have one of these browsers, please contact your IT support staff for assistance.

There's a cluetrain leaving in 15 minutes, guys, and you ought to get on it...

Down to earth

2010-10-12T11:58:00.002+01:00

You may have seen this on Lindsey Annison's fine blog, but I like the simplicity of this video by rural fiber pioneer Chris Doyle.

What does your smartphone say behind your back?

2010-10-11T09:51:00.002+01:00

I stumbled across this interesting link in the NANOG list traffic, and thought I would share it. The folks behind the pcapr project have developed a tool to analyze which smartphone apps are saying what to whom. The instructions here are not for those of low geek quotient, and sadly it's a Mac-only tool at present, but I expect we might see some interesting analysis coming out of this if enough people take part and share their results.

Resurfacing

2010-10-08T11:03:00.003+01:00

I'll skip my normal apology for not posting recently, but you might want to consult this site for some very fine examples from others. No doubt somewhere therein lie elements true to my own recent experience, though I can confirm that I have definitely not been working on a Queen musical.

Life is complex and challenging, 'nuff said.

So, to return to EuroTelcoblog topics of interest, a friend on the Fiberevolution list points to this blockbuster news out of The Netherlands. Essentially, two large public pension funds in the country are combining to launch a new EUR1bn fund with the purpose of consolidating and expanding existing fiber/FTTH networks over the next ten years, in a project that may ultimately end up as a EUR10bn ticket. The new fund, Communications Infrastructure Fund (CIF), will also invest in wireless towers, which is entirely sensible given that the fiber network will provide the most robust backhaul available in the country.

I've been wondering for some time when we might see this kind of fund emerge, so it is a welcome development, and should put some genuine financial firepower behind the development of open access networks, at least in countries where the financial resources still exist to fund them. In my view, this structure better aligns the financial return profiles of the investors with the durations of the projects. Pension funds by definition have to plan for stable returns over the next 50 years; telcos and MSOs are enslaved to the 3 - 5 year time horizons demanded by shareholders, often coinciding roughly with the lifespan of management teams...

A cry for help

2010-07-27T14:28:00.002+01:00

Well, it's not an actual cry for help (yet), but I thought that might get your attention...

I'm currently involved in a research project, the intention of which is to collect and analyze technical data around fiber deployments (FTTH/B/C/N/letter of your choice), with a view to benchmarking deployment costs against the technology choices and physical constraints of real-world projects. If you're involved, or have been involved, in a real-world fiber project, and are willing and able to share some detailed data on an anonymized basis, please ping me, and I can fill you in on the project in more detail.

Facebook creates orphans

2010-06-08T12:26:00.003+01:00

Now there's a headline The Daily Mail would probably love to run one day, though it would almost certainly be followed by something along the lines of "... and is out to nick jobs from hard-working British families!" I, however, am talking about orphan data.

The other day, my elder daughter was updating her Facebook info, and in her musical likes kindly included an old (and occasionally still active) band of mine, Linda Heck & The Train Wreck. When I noticed she had done this, I was genuinely moved, and thanked her, but the pedantic parent in me felt obliged to point out that she had failed to capitalize "The Train Wreck." She went to the computer and attempted to correct this in her profile, but Facebook would not allow it, which made me suspect that there was some sort of static content being pointed to, somewhere. So we clicked on her link, and sure enough, it led to a page dedicated to "Linda Heck & the train wreck," with my daughter listed as the only person who liked it. In other words, by merely typing the name, a page was created, with no consent on her part.

So we conducted an experiment. I asked her to re-type the band name, but this time with proper capitalization and an exclamation mark at the end, i.e., "Linda Heck & The Train Wreck!" As she was the only person who liked the previous page, the old page was wiped and replaced with this new one. Since then, a number of people have liked it, so presumably it is permanent now, unless we all decide to unlike it, which might be another interesting experiment. Looking at similar pages which have been created around other bands, it appears that Facebook scrapes Wikipedia pages (where available), friends' comments containing key words, and "global posts" (i.e., posts by people you don't know, and who don't know you) in an attempt to auto-generate something like a relevant page.

Just for the sake of mischief, I repeated the process, but this time replacing the exclamation mark with a question mark, which has now created a new page. We could create a huge number of other pages on the same band (or anything else), using various mis-spellings, odd punctuation, l33t, etc., so that the potential for data fragmentation around this single band becomes almost infinite.

I find this simultaneously pointless and insidious. It is clear that Facebook wants to be smarter than its users, in trying to auto-populate pages without anyone consciously constructing them, or more importantly, controlling them. For a major band, this may not be such a huge issue, as the legal department can always be called in and the "official" page invoked, but my friend and collaborator, Linda Heck, is now inadvertently confronted with a page (two, actually) dedicated to an old band of hers over which she has no control or ability to edit.

As it stands, the only way for her (or anyone) to build any meaningful content into this page is to write a Wikipedia entry on the band, which would then be incorporated once Facebook crawled the site. Alternatively, she or someone else could make Facebook posts about the band, but these would have to include the exclamation point to be picked up. This seems an ass-backward way to build a community of interest, if that is the goal.

The other thing which I find disconcerting goes back to the tired old oxymoronic concept of "Facebook privacy." The "global posts" include contributions from people who probably believe that they have kept their data private. As long as they are posting something along the lines of "Wow, this Kinks video is awesome!" that may not be an issue, but what if their post consists of "Dude, remember this song from that Kinks show where we took mushrooms and crashed your dad's car on the way home?" Forget that career in law enforcement.

As with many of the recent revelations about Facebook, this is needlessly annoying and disconcerting. It seems to me that at the very least, creation of a new page should be an opt-in event. The absurdist in me tends to think that the only suitable response is to flood Facebook with fictitious and pointless data, which we can all collude to share and propagate. Some would argue that this goal was accomplished long ago. Otherwise, I guess we all should just keep our likes to ourselves, which isn't very social, is it?

Put the iPhone down, and step away from the Kool Aid dispenser

2010-06-08T10:25:00.005+01:00

I have a tremendous amount of respect for Apple and all it has achieved in design and market creation, as well as the precipitous rise in its market cap, which The Dear Leader recently described as "surreal." I have never encountered a CEO of any company who didn't believe (at least in public) that his/her company was undervalued, so this remark in itself is surreal and has a vague whiff of short-bait about it.

Another thing I find increasingly surreal is how, every time Mr. Jobs speaks, otherwise intelligent people seem to suffer a rapid onset of cerebral paralysis. Last night, as I watched the euphoric Twitsteria flowing from the Jobstown compound, I saw a couple of comments along the lines of "Two deaf people signing to each other over the iPhone - Apple just leapfrogged everyone," and (my favorite), "Future - we are here."

The last time I checked, the future started about eight years ago. Here's a TV spot from the technologically ambitious, but commercially inept, 3 UK, from spring 2003. Video calling. It ain't pretty, and the brain-dead, bloke-ish inanity of it completely deflates the potential magic of the proposition, but there it is.

3 Mobile Video Calli..
Watch the ad...

So, in theory, we've had this capability in Europe for the better part of a decade. I consider myself to be a keen observer of how real people use devices and interact with communications services, and I have *_NEVER_* seen anyone making a video call on a mobile handset out in the real world, ever. The far-from-overwhelming HTC Touch HD handset I got two years ago had a front-facing camera for video calling. I never used it, not even out of curiosity, because a) I knew it would suck and be very expensive over a 3G connection, and b) if I were using WiFi and desired a video chat with someone, I could use Skype on my netbook, which I almost always have with me. It is interesting that the highly impressive HTC Desire I now own has no front-facing camera, so it would appear that this is a feature which the Church of Android considers to be superfluous, at least for now.

However, Apple has an impressive track record when it comes to creating new markets and changing consumer behavior, so just because there is no demonstrable history of use cases for mobile video calling so far, doesn't mean that we can blithely assume this won't change. Perhaps the fact that Apple is limiting the service to WiFi for now, and the characteristic attention that the company gives to usability and elegance of interface, will drive adoption and protect it from the risk of disappointing consumer expectations. Then again, in my experience, the Apple faithful typically own more than one Apple product, so if they are in a place with WiFi coverage, there is a decent chance that they will have a MacBook or iPad in tow as well, either of which would offer a superior experience if video calling were required. As far as I can tell, FaceTime video calling works only between iPhone 4 devices (for now, though I expect that will change over time), so this could also be problematic for adoption depending on contract periods and upgrade cycles among one's iPhone social circle.

Don't get me wrong - the iPhone is an awesome device, and the promise of a (probably) satisfactory video calling experience over it is a nice-to-have feature. It's just that tired old telecom "pundits" like me have heard the George Jetson mobile video calling pitch for so long now, that when I hear people talking about "leap-frogging" and "living in the future," I feel tempted to call out the deprogrammers. I would like nothing more than for FaceTime to prove me wrong, but I just can't see it happening very quickly.

Now, if you'll excuse me, I've got to go wash my flying car.

Note to self

2010-05-05T22:20:00.003+01:00

Make sure that you post the appropriate content to the appropriate blog in future.

The vast majority of you probably don't care about my sporadic musical activities. So, my heartfelt apologies go out to you. The other day I erroneously posted an account of my recent musical adventures to this blog. I realized my gaffe within seconds and removed the post, but RSS is an unforgiving medium, so it was immortalized, despite my best efforts. Onward and upward.

Diverted

2010-04-23T10:27:00.001+01:00

Probably no posts for the next few days, as I'm Memphis-bound. Hopefully I will have some interesting news to report upon my return.

Fiberfete, via coax

2010-04-21T11:25:00.003+01:00

Having had my travel plans b(j)orked by the land of fire and ice, last night I tuned into the webcast of the opening session of Fiberfete. You can do the same today here, from 08:30 CDT (14:30 UK/15:30 CET/00:30 HK).

I have to confess that it was bittersweet when the conference kicked off at precisely the moment that UK airspace was reopened, apparently due to a reassessment of jet engine resilience (UK Transport Chaos Minister Lord Adonis this morning made the curious claim that tolerance levels are now 10x what they were previously, but "previously" was a zero tolerance regime as far as I know - this is obviously some New Labour Math beyond my grasp). Or was it really because of the bold move taken by Wee Willie Walsh, or the spectre of a general election? Alas, I digress.

I was really thrilled to see this event come to fruition, and I was very pleased to see that comrade Benoit Felten actually eventually made it Stateside to represent the largely stranded European contingent, though he sadly missed his speaking slot. I assume he will be tweeting day two of the event, as will I.

I was also pleased to see the attendees being accompanied into the conference room by the sound of a swinging jazz quartet (twin fiddles - this is Southern Louisiana afterall - upright bass and guitar) playing "Honeysuckle Rose." It's good to be grounded in the past as a point of departure in considering the future (and the futuristic), so what better than analogue 20th Century music?

This was a theme which continued in David Isenberg's fascinating panel session with City Mayor Joey Durel, Director of Lafayette Utilities System Terry Huval, and Jim Baller. In a refreshing departure from the usual geek focus of fiber discussions, the panel took as its point of departure the historical and cultural aspects of Lafayette which made the development of its fiber network at least likely, if not inevitable, echoing some of the opening remarks which preceded the panel.

The short version is that Lafayette has always been a community of outsiders and mavericks. Mayor Durel pointed out that the first four ethnic groups to settle in the area were all refugees displaced from their previous homes, and this had created early on a tendency towards self-reliance. When electrification began in the late 1890s, no commercial entity viewed Lafayette as worthy of investment, so the city fathers took it upon themselves to make it happen. The utility they created eventually took the strategic and operational decision in the late 1990s to deploy fiber for internal use, but then realized that the cost differential of expanding their deployment from 12 fiber strands to 96 was only 20%, and that the extra capacity would open up option value to be captured at some future date.

That future date is pretty much now, not only in the retail space, but also in the collateral benefits starting to be delivered to the local university and research community, the creative/interactive community, and other knowledge-based enterprises. The founding fathers of the city, who took the decision to self-provision electricity, could not possibly have envisaged how that decision has subsequently developed, but neither is this an accident of history.

Yes, the groundwork was there to build on, but the city's progress to date has been a product of a recognition of common interest between the city government, commerce, educational institutions, and grass roots activists. As Mayor Durel pointed out, one of his motivations as a newly-elected mayor to back the fiber vision was "to keep our kids here," in other words to stem out-migration by the younger generation to places which might offer more obvious opportunities for economic advancement. Such a phenomenon has been the cause of premature death for more than one community.

As a candidate receiving donations from BellSouth during the campaign, this was a bold move, and the city spent more than $4m in legal, consulting and associated fees in defending itself from legal challenges by both the incumbent and cable. Ironically, the more strident the opposition from the duopoly, the greater community awareness became, and at some point, this tipped over into a popular resentment of "outsiders" trying to dictate to the residents what was in their best interest. Mayor Durel stated, "The legal fees were the greatest marketing dollars we ever spent."

My feeling as the first day ended was that this discussion highlighted something which is almost universally overlooked at fiber events, in favor of discussions of technical and topological discussions: what ultimately may dictate success or failure is the local community, its values, history, political development and institutions. All the connectivity in the world will not bring affluence and entrepreneurial vigor to an environment where the cards are stacked against it, or where institutional fragmentation and apathy are overwhelming. (I am reminded here again of my unsettling discussion over lunch with some Japanese telecom consultants three years ago. I was singing the praises of Japan's "fiber miracle" and found my hosts exchanging embarrassed smiles. "The only driver we can see for fiber adoption is cheap voice." I left the exchange thinking that Japan might not necessarily be culturally or institutionally equipped to see an explosion of innovation and entrepreneurship simply because fiber is everywhere - a sobering realization to a Fiber Taliban member, as I then was.)

Lafayette has had some obvious advantages by virtue of its history, character, and institutions. These won't be replicable everywhere, but that doesn't guarantee failure for others or rule out alternative approaches elsewhere. Nor does it mean that success is automatic for the relatively advantaged. The key, from what I can tell so far, admittedly as an outsider stranded in London, is that the community had the vision and motivation to capitalise on its advantages, to develop a plan and execute it.

And it seems that, having gotten this far, they are still in the learning and exploration phase when it comes to exactly where this goes from here, but having taken the decision to invest, they now at least have the opportunity to define and influence what option value is created in future - which puts them decades ahead of where I currently sit.

I found the first day to be inspiring and thought-provoking, and while it might sound strange, I am genuinely looking forward to the 9.5 hour webcast today. Special thanks and honorary mention to Lane Fournerat, who fulfilled my wish for multiple points of view/value-added extras by live-streaming the tour of the LITE facility on qik. I believe/hope he may be doing the same today, so check him out.

Lastly, and apologies for closing on a downer, but if I have to name and shame anyone, it's telco professionals around the world. On yesterday's webcast, the highest number of viewers I saw was 27. Yes, twenty-seven. Here we have one of the most interesting case studies I have ever come across, and an event full of collective wisdom and experience which is truly stunning (and free for the taking), and fewer than 30 people, of whom I know at least five, can be bothered to tune in. Bizarre.

Summary soundbite: it's not just fiber of the optical kind, but the fiber of the community and its institutions, which will separate the winners and losers.

B(j)orked

2010-04-19T13:47:00.007+01:00

I was hugely looking forward to taking part in Fiberfete, where I was due to do some sponsored coverage of the event, but Eyjafjallajökull had other ideas, and my flight this morning was cancelled. The earliest slot I could re-book for was Friday morning, by which time the whole event will be over. David Isenberg has tried in vain for years to get me to one event or another, and on this one the stars aligned beautifully, before dispersing catastrophically.

I will of course enjoy following the event via webcast, but for me the real promise was to meet (in some cases for the first time) others with whom I have been in virtual contact for many years, and of course, to share ideas and experiences. I'm sure there are a lot of other frustrated attendees (also of eComm) who share my sense of disappointment.

I guess if there's any positive spin to this, it's that you probably couldn't find a better illustration of the potential value of fiber than the unprecedented travel chaos we're experiencing in Europe. A single-angle webcast video feed is one way to experience an event which you are unable to attend, but it's a pretty anaemic representation - passive, one-dimensional and unidirectional. With telepresence, virtual collaboration spaces, augmented reality tools, and the ability to toggle between multiple conference tracks and/or points of view, we would be talking about quite a different prospect altogether. As Blondie sang, "Dreaming is free."

Anyway, to all my erstwhile Fiberfete comrades, have a great conference, and have some gumbo for me. Also, if you're attending and have any insights, anecdotes, or other color from the event, please get in touch.

(P.S., I will be giving some coverage to the event via the webcast, both here and on Twitter, where you can follow the backchannel with the hashtag #fiberfete. eComm is also well worth following, if you are capable of multitasking.)

Washed away

2010-04-08T13:09:00.006+01:00

While much of the rest of the world has been preoccupied with the sickening spectacle of tech bloggers publicly making love to their iPads, or alternatively dissecting them in search of a bone of St. Peter or some other indication of divine significance, here in the UK we have been witnessing the humiliating travesty of the Digital Economy Bill being pushed through the soon-to-be-dissolved Parliament in a process called "wash-up," which conceptually is perhaps most similar to a drug dealer hastily flushing his gear down a toilet when the jig is up. However, in this case the effluent is poorly drafted legislation, and it will probably have a much more toxic legacy than a bit of waterlogged skag flushed into the Thames.

The bill can be read here, and I'm not going to go through it (mainly because it makes my blood pressure rise to dangerous levels), but eminent cyber-lawyer Lilian Edwards has given a lot of very good coverage to the "process," all of it well-observed, and some of it very impassioned. Apart from the sheer embarrassment of the process itself, a largely anti-democratic shambles with just over 6% of MPs turning up for a crucial second-reading debate, we also had to endure a lot of poorly-informed rhetoric from those who did show. One commenter on Twitter referred to the debate as being like a group of nursery school children discussing quantum mechanics, though there were also some rare examples of well-informed and rational argument against excessive haste and unforeseen consequences.

Mike Butcher has posted a fairly scathing piece, and the Ars Technica coverage is also a good intro for readers outside the UK, where the issue seems to have attracted surprisingly little attention up to now. The TechCrunch piece raises an issue I have been writing about for a long time, namely the fact that a DPI-led arms race initiated by the content industry might have unintended consequences, which will further muddy the waters of legal due process. As one observer on the NANOG list noted succinctly in the wake of the announcement of the Comcast ruling (coming in the same week - can you hear the slapping of high-fives in content land?), "Looks like a good time to get into VPN services."

There is a lot to be disturbed about in this bill, but I am most unsettled about what is, to my mind, a fairly arbitrary and vague stance on what might constitute evidence to substantiate suspicion of involvement in copyright infringement. (If anyone has a clearer idea, please contact me and let me know what I am missing.) This can only be exacerbated by a widespread adoption of encryption, as I envisaged in my post linked above, and which Mike Butcher cites a real-world example of in Sweden. In such a scenario, will it be enough to observe volumes of encrypted traffic flows to infer potential infringement? From a technical standpoint, maybe, but from a legal standpoint this sounds a lot like the "if you have nothing to hide, there is nothing to fear" mantra so often employed by totalitarian regimes. My guess is that if we do see a spike in adoption of such services in the UK, it may be precisely because people have nothing to hide and thus resent being snooped on, something which has always gone on, but which they may now be more sensitized to as a result of this asinine legislation.

One huge problem in all of this, and one which the blinkered supporters of this bill seem to be blissfully ignorant of, is that many of the same tools which they associate with "piracy" (if, indeed their understanding even extends to the word "tools") are also in "legitimate" use by those in the creative industries, whom the proponents of this bill expressly claim to protect. Twitter prankster @record_industry perhaps nailed the real intent of the phrase "creative industries" with this tweet: "To clarify: when the bill says 'protect artists,' we mean REAL artists. Not you shitty amateur ones." I suspect there is more truth in this than politicians would like to admit. Nevertheless, I fear that there is a huge number of "creatives" who rely on the internet for their livelihood who might find themselves on the wrong end of the enforcement regime suggested by this bill.

Here's a personal case in point. My friend and sometimes band mate, Linda Heck, is working on a recording project in Memphis and Nashville. She very kindly asked me to contribute guitar and vocals to four tracks on the project. My friend and neighbor, Paul, has a studio in his home in South London, which he has previously used only to record his own band, and I decided to record my parts there. As it happens, I am going to the States in two weeks' time, so I will hand-deliver the discs containing my contributions. However, Paul and I could just as easily have ended up uploading the files to a secure FTP site, from which Linda and her producer could have then downloaded across the Atlantic.

Now, these files are WAV audio files, uncompressed, so a single guitar part for a single song can be 15 - 50MB, and there are a lot of them. Just for my contribution to four songs, the total payload came in at over 600MB, so roughly equivalent to 10 albums in mp3 format, or perhaps a feature-length film in standard or sub-standard resolution. Hypothetically, let's say that Paul becomes popular as a producer, and ends up getting involved in several other similar projects, wherein several times a week he is uploading and downloading several gigabytes of media files to a secure FTP site. Well, to those connected with the project, it's just an ordinary part of the production process, but to a telco acting under duress as secret policeman of "content kleptomaniacs," it will probably be flagged as suspicious activity. And to the paranoid, intellectually bereft elements of the content industry which endorse these Orwellian tactics as a diversion from their glaring lack of imagination, it will almost certainly be enough for poor Paul to end up on a blacklist of some sort. After all, what possible reason could someone have for uploading big content files to a secure FTP site besides infringement? It couldn't be independent music, it must be episodes of "Glee."

This is only one example, but one I fear may end up being a textbook case in future if this idiocy is allowed to continue. I also know a lot of other "Pauls" in video production, photography, software and other industries where shipping and receiving large amounts of sensitive, proprietary data, often in encrypted form, from a home broadband connection to secure online storage is a normal and essential part of business. Without highly invasive inspection of the actual files (think strip-search) to show that they are not infringing, the industry may simply assume that volume of this sort, either encrypted or to/from secure sites, or both, is suspicious at least, and deserving of escalation through the "process." (Not to mention users, including me, of services like Jungle Disk.)

Perhaps I'm wrong. Maybe the Crusaders Against Content Kleptomania (CACK) will develop a rational, scientific and defensible approach which won't throw up false positives on spurious evidence, and impose costs and economic damage on innocent individuals - "creatives" even. I hope so, but I don't find history to be encouraging, and I think it's embarrassingly clear that most of the politicians involved with this shit-show don't have a clue of what they might be unleashing. Anytime you wield a sledgehammer to crack a nut, you risk smashing someone's fingers in the process, possibly your own.

Not your average Guy

2010-04-08T12:33:00.002+01:00

I was saddened to hear today of the passing of Guy Kewney. I didn't really know him - we ran into each other at conferences over the years and had brief chats, and he called me occasionally with bits of gossip or to ask for a quote or input on a story. He was, however, a big influence, in the sense that he was one of the first European tech journalists I read online whom I actually found informative and entertaining. I have always had a lot of affection for him because he was among the first to link to this humble bloglet in its early days and raise the possibility that some of what I had to say might have been worthwhile. And, though he was most unhappy with the event, he also inadvertently provided one of the most ludicrously embarrassing moments in the history of the BBC, just by being who he was (or wasn't). Those who knew his work will remember him for so much more. Thanks, Guy, and rest in peace.

Lock the door, innit

2010-03-31T22:33:00.003+01:00

Here's an excerpt from an email I received from Virgin Media today. Just for the record, my new account set-up, installation, and service so far has been nothing short of smooth, painless and splendid, a vast improvement over the way things were five years ago. My only suggestion for improvement comes after the email excerpt.

Hi James Enck,

Welcome to Virgin Media! It's great to have you with us, and we hope you're already enjoying getting stuck in to your new services.

At Virgin Media, we want to make sure we give you the best customer service out there. That's why we'd really like to find out how things went for you when you joined us.

We've put together a few quick questions about joining us, and we'd really appreciate it if you'd take the time to let us know your thoughts. It shouldn't take longer than around two or three minutes to complete.

By finding out exactly how things went for you, we'll be able to understand the things we're getting right, and if there's anything you'd like us to do better. And we promise to use your feedback to make improvements where we can.

Okay, Virgin Media. I haven't been "getting stuck in to" your services, because that's too much commitment for me, and I don't want to answer your questionnaire, because life's too short. As I said earlier, ordering online, installation, and the service itself have all been perfect, and I have absolutely no complaints, apart from the three week lag time, but I guess you can't help it if you're popular, as you alone can offer an incredibly sexy average download speed in excess of 3Mbps. My one, and only, concern is that the street cabinet right outside my house is open, and has apparently been open since time immemorial, judging from the crude stone implements and charcoal drawings I recently discovered inside. The engineer who did my installation one week ago claimed to have locked it, but it is now open again, flapping in the unseasonably cold wind. Luckily, the locals seem to be too stupid or distracted to concern themselves with the obvious opportunity for vandalism/mischief, but the Theory of Evolution suggests that they may turn their sights to it eventually. The clock is ticking.

Swing low

2010-03-29T14:45:00.002+01:00

What can you expect by way of "special treats" when you're an employee in a company which has been LBO'd more times than anyone can remember and suffered a tough couple of years in one of the worst macroeconomic situations in the developed world? Well, if that company is eircom, you should brace yourself for the worst. Evidence suggests that the company was recently "treated" to a performance by the execrable Crystal Swing (check out this charming hit, an affectionate tribute to "funny foreign people"). Here's a short video clip of the kids doing "The Hucklebuck" (a rip off of Charlie Parker's "Now's the Time") in front of the eircom logo, and here's a blurry photo of CEO Paul Donovan getting down with "the yoof." This looks like a good candidate for runner-up as worst corporate entertainment ever, after the obvious hands-down winner, the Bank of America/MBNA merger hoedown.

Fiber mania - let's get ready to rumble

2010-03-29T11:06:00.004+01:00

There's an old saying to the effect that every revolutionary change goes through three phases: universal dismissal, grudging acceptance, and finally adoption as an unquestionable and indispensable fact of daily life. I remember once asking at a conference for a show of hands of Skype users, and seeing only 10% or so raised. Now it is everywhere, established as a verb, alluded to on "The Archers", used by mainstream news media.

Around the same time as that conference, in early 2004, I started writing (dip in around page 60) about the inevitability of fiber, and the politicization of true broadband as a lever of socio-economic development policy, as well as the limited scope for the associated benefits to be captured within the narrow envelope of telco "shareholder value."

As with my earlier work on Skype, I think my sales team thought I was wandering off down some trivial, theoretical blind alley, or worse, just talking science fiction crap. I stuck to my guns. I'm mainly stating this to avoid any possible misinterpretation as a "trend-rider" by those not acquainted with my background.

Given all this background, I must say that it's hugely satisfying, and entirely unsurprising, to see the current mania surrounding fiber, and particularly the lengths some people will go to get a piece of the fiber future. As a former Memphian, I am proud of the relatively more down-to-earth and dignified appeals being made for the Memphis case for inclusion in the Google project. I will be pulling for you, Memphibians.

On the subject, I am looking forward mightily to participating in Fiberfete, in sunny Louisiana in three weeks' time. It should be a good opportunity to reignite my fiber enthusiasm.

Have you ever been experienced?

2010-03-15T17:06:00.002Z

Well, I have. And I'm not even talking life experience here. That would be a much longer post. I'm thinking here of user experience, on which one always overdoses when moving into a new house, which I have just done. Countless calls to customer service centers for thankless exchanges, invariably with people possessing either unintelligible accents or preposterous speech impediments. It's all part of the fun. Today I tried to inform an insurance company of my change of address, only to be told that it had to be done in writing. "How about email?" I optimistically asked. "Sorry sir, it has to be in writing, on paper." I pointed out that if I sent them an email and they printed it out, it would be in writing, on paper. I think you can guess how that little exchange ended. I just got back from posting the letter.

Anyway, on to the telecom-related angle here. I signed up to Virgin Media on the day I moved in, using their online registration site, which I must confess was amazingly smooth and well-designed. Nine out of ten so far. Installation date was estimated at the time at 19th March, i.e., 15 days after placing the order. I then got an email (and courtesy call) a couple of days later to tell me that my installation would take place on the 24th, or 20 days after placing the order. I know that Virgin's "fibre optic" service is blazingly, blindingly, orgasmically fantastic, and I was a satisfied customer previously, but can they really be seeing such astonishing demand that it takes three weeks? And why an estimated average install time of two hours? There is an existing cable drop and phone line in the flat, so it should be a simple case of plugging in the modem and router, job done. My guess is that their databases may not be all that hot, or maybe they're allowing for extra clean-up time after their invariably techno-blaring vans run over some poor cyclist, as nearly happened to me recently. Oh, and while the tech is on site, I might ask him to look at the street cabinet just in front of the house, which is, predictably, open for all the world to see.

So, in the meantime, I am using a "mobile broadband" (/irony) dongle from Orange. The house sits at the top of a hill, so reception is great throughout the house at all times, though it is a bit flaky with what seems like a lot of latency on the uplink. Anyway, it works fine for what it is, but I got curious about data usage and went on the Orange site to look at my account. I have both a handset and a dongle, so two separate SIM cards, and I was pleased to see that for the handset, I am able to get near-realtime updates on data usage. Stupidly, I expected to be able to do the same with the dongle, but no cigar. For some unknown reason, Orange doesn't log this in any way that anyone can see, not even their own call center staff (believe me, I have asked them). The usage only becomes visible if the dongle goes over its 3GB limit, at which time overage charges (I have been quoted everything from 5p to 15p per MB, all from the same call center, clearly on Tyneside, though the actual charge is 2p, confirmed) kick in.

The first person I spoke to in the call center erroneously told me that the overage charge for data was GBP3 per MB, which alarmed me, which is the only reason I became interested in this issue in the first place. I was also told that, as my first generation dongle doesn't have a built-in data meter, I should download one. So, I downloaded NetMeter, which seems to yield erroneous readings (for example, when I plug my handset into the laptop to charge it, it registers a download of 50MB or thereabouts, which is plainly absurd).

Apart from the obvious training issues in the billing help section, I am baffled as to why Orange meters usage on one product in a granular way which is helpful to the user, while having a complete lack of visibility on the other, despite the fact that both are just SIM cards connected to radios on a common billing system. On a fourth call to the company to clarify what is going on, my agent kindly offered me an additional 2GB free for the next three months, in recognition of the confusion and misinformation I had been fed. It also slipped out that overage charges are capped at GBP30 - 40, depending on the contract, no matter how much overage, and they won't shut the user down, at least not on the first offence. The things you learn when you call the Orange call center four times on the same subject...

So, last stop on my rant is the Facebook IM function. It astounds me that a company which has built itself up so impressively by understanding (and arguably, transforming) the way people connect and communicate, can apparently be so complacently satisfied with this primitive POS. Recently, I have missed a number of attempts by friends and family to chat, because I was either in a different browser tab and didn't notice the pathetic text-flash in the Facebook tab, or I had the sound turned down so that I couldn't hear the single impotent little "pop" that accompanies a new message. The Facebook clan, if they thought about it at all, probably thought they were clever in making the chat notification unobtrusive, but there was a reason that rotary phones had a loud metal bell inside, so why ignore the lessons of history?

Gee, this blogging thing is fun. I may have to try more of it sometime soon. I could even start a disaffected consumer blog. Too bad that Hank Williams has already taken the most appropriate blog title ever for that sort of thing - "Why Does Everything Suck?"

Socially inept social marketing

2010-02-22T12:50:00.002Z

As enablers of communications, I don't think it's too much to expect of communications companies to be able to communicate. However, it seems to be almost an alien concept, and when it goes wrong, their efforts can smack of ineptitude, if not outright desperation. A friend received the following from a PR agency, which shall remain nameless to save them embarrassment, though I don't know why I'm being so charitable:

Hi there,

We work for BT and would like to offer you the opportunity to trial the new BT Infinity Superfast Broadband. The service is being rolled out across the UK over the coming months and as a prominent xxx blogger, we'll like your influence to help tell people about it. Here’s the deal – we’ll give you FREEbroadband in exchange for running a competition about BT Infinity on your blog.

BT Infinity is basically a fibre optic broadband service that allows download speeds up to 40MB and upload speeds of up to 10MB so you'll be able to do so much more at the same time - and in an instant.

Here’s some more info on BT Infinity: http://www.productsandservices.bt.com/consumerProducts/displayTopic.do?topicId=29017

Sound a good deal? Just let us know if it's something you'd be interest taking part and we’ll arrange for full installation and send you a media pack about the competition details right away!

Please let us know.

Best wishes

So it looks like said PR shop is scatter gun spamming bloggers in a cack handed effort to tap some illusory "social buzz" surrounding BT Infinity (interesting name choice, by the way - you can't go beyond infinity, now defined as 40/10Mbps). No personal salutation, so not particularly social, and in line two my friend is described as a "prominent xxx blogger." Triple X? Really? I'm also baffled as to exactly what sort of "competition about BT Infinity" he is meant to "run" on his blog. Perhaps some sort of xxx download speed contest?

Bizarre from start to finish, and it's reminiscent of the kind of anonymous nonsense I occasionally receive from Sani Abacha's widow. Socially inept, and, methinks, highly unlikely to inspire a warm and fuzzy feeling in any "prominent xxx blogger," but fantastic comedic value. So here comes the punchline: the "prominent xxx blogger" recipient mothballed his blog quite some time ago, just so you know.

BT, if you are intent on doing social marketing, I am available to advise you.

Digital Dales Colloquium Number 1

2010-02-20T16:54:00.002Z

In direct contravention of my own new year's resolution, I have not, in fact, posted more frequently, which is a source of ongoing embarrassment to me. Life has brought many changes over the past six months, and most of them have not been great. I've been trying to focus my energy on things which have a more positive direct impact on my life, or on issues I care about, and less on things like pontificating about the iPad (though if I did want to pontificate on it, I would probably take a different tack).

For this reason, I would really love to be at the Digital Dales Colloquium Number 1, next Friday the 26th of February, but unfortunately, I am moving house that day. I had the pleasure of finally meeting Lindsey Annison recently, and her enthusiasm and commitment to getting true connectivity to people who need and will benefit from it is truly inspiring. It probably helps that she has experienced life on the broadband margins personally - as she said to me, try running a business out of your home with a DSL line that delivers 256kbps, on a good day.

Anyway, try to get there if you can, because I'm sure it's going to be a great event. Sorry I have to take a rain check.

Googlebit to the home

2010-02-10T17:10:00.002Z

Here I am in Amsterdam spending the day with people involved in the FTTH open network space, and lo and behold, the big G weighs in with a helpful bit of ammo to throw at the asymmetric services Taliban.

"We want to see what developers and users can do with ultra high-speeds, whether it's creating new bandwidth-intensive "killer apps" and services, or other uses we can't yet imagine."

The emphasis on the last bit is mine, and for obvious reasons. This is something which we were trying to stress here, in drawing a parallel with the decision to extend the power grid to all. That decision wasn't taken with perfect knowledge of what the benefits or ripple effects would be, and I suspect we have no greater insight into where developments like this will lead.

But rest assured that, with Google now wading in, telco paranoia readings will rise to DEFCON 1, which should provide great comedy value for months to come. Just when I thought broadband was getting dull...

A blaze of glory

2010-01-14T09:49:00.004Z

Firstly, I'd like to wish a belated Happy New Year to all mega-uber value readers. I've started the year with a few distractions, and so haven't been as assiduous in my resolution to post more in 2010, but there's still a lot of the year left.

I've previously sung the praises of Virgin Media's top-notch treasury team, and once again they've shown what they're made of. On Monday the company announced a £500m offering of senior secured notes, following on from the senior facilities amendment process of last year, which allowed the company to issue bonds ranking pari passu with existing bank debt, in order to manage maturities. This in itself was not surprising, but demand was such that the company was able to up-size the transaction to raise a jaw-dropping three times what it initially aimed for. The two tranches (7% sterling and 6.5% dollar) priced at 98.5, to yield 7.25% and 6.75%, respectively, and traded up on the break, but appear to be struggling somewhat now.

This development tells us that there is an eye-watering level of liquidity looking for a home, though I am puzzled as to why, in the face of rising interest rates in the future, it chose this issue and this sort of pricing to get excited about. More interesting to me is what this deal says about Virgin Media's expectations for the capital markets in the near term. Most of the new issues we have seen in recent months (including Virgin's own issues) which have been up-sized have typically been increased by 50%, or in extreme cases, to maybe double the initial expectations. But three times? Audacious stuff indeed, though completely understandable if investors are trampling one another to hand you money on favorable terms.

Thinking back to the dark days of Q4 2008, when everyone seemed to think the world was going to end, Virgin Media was among the first in Europe to take a proactive stance towards managing its maturity profile, itself a bold move against a backdrop of widespread scepticism and despair, and it continued to manage the process throughout the following year, tapping the market in May, July and November. In doing so, it would appear that the company correctly read the course that the market would take as the mood lightened and risk appetite returned, and it was opportunistic in taking advantage of the dynamic.

With this latest gargantuan issue, however, I feel an element of "last gasp," and I am wondering if we should take a negative view of what this says about the company's reading of the market in 2010, i.e., the door is closing so take the money and run. If that's what they're saying, I'm prepared to listen.

Now ONO, which has endured far more stress and waited far longer to deal with its own issues, is going to attempt broadly the same solution, albeit in a much more compressed fashion. I will be very interested to see how it fares in comparison.

Happy holidays, farewell noughties, and onward and upward in 2010

2009-12-23T16:48:00.005Z

Well, as Santa packs his sleigh, one thing is painfully clear: I have been a bad blogger and will only be receiving lumps of coal this year. My New Year's resolution is to post and Tweet more frequently in 2010. It promises to be an interesting, if challenging, new decade, and I look forward to being involved in new projects and adventures.

Given that the past two years have brought me little besides serial frustrations and disappointments on both personal and professional fronts, I can't say that I am sad to see the end of this first decade of the millennium. However, that would be to overlook all the wondrous developments in our beloved telecom which make the world in December 2009 look almost unrecognisable to the time traveller from ten years ago: the inexorable global rise of mobile; ubiquitous WiFi; grid computing; Linux in the consumer sphere; the proliferation of consumer broadband; peer-to-peer architectures; social media, user-generated content, and mash-ups; online gaming and immersive worlds; access-independent voice; the iPhone and apps; the iPlayer/Hulu; YouTube; the Cloud phenomenon; Google Earth; search and recommendation engines which actually work...

I could go on, and no doubt I'm missing many and overselling others. However, those of you who remember 2000 will, if you're honest, recognize that this list represents some genuinely huge changes to the world we inhabited when we celebrated the Millennium, and also that many of them were unexpected, or have happened either faster or on a broader scale than many could have anticipated at the time. Yet, what underlies their development is the technical, regulatory, and commercial framework which allowed these developments to take shape. In other words, the investment in development, policy, infrastructure and business models which enabled the fairly humble and primitive platform quaintly called "The Information Superhighway" in 1999 was critical to engendering all of the innovation we have seen in the decade since.

Only the most visionary at the time could have had a genuinely clear idea of how things would look in 2009, but the steps were taken nevertheless, possibly in some cases as a blind stab in the dark at some sort of nebulous opportunity which might develop as a result. We now find ourselves at the threshold of a new decade and a new range of unforeseen possibilities to be facilitated through further investment, and my guess is that the degree of transformation we will acknowledge at this time in 2019 may make the past decade look tame by comparison. If you find this line of thinking interesting, and also find yourself overdosing on family togetherness over the holidays, you might like to sneak away into a quiet corner and have a read of this recently-published paper which I co-wrote with my man Taylor Reynolds of the OECD. I look forward to your feedback, and hopefully to discussing and debating in the new year. Meanwhile, I am off to the States to see family and friends and (gulp) play a live show...

Until then, thanks for reading, and I'd like to wish you all the best during the holidays and a fulfilling and prosperous new year.

Of sausage and budgets

2009-12-10T10:20:00.004Z

There's an old saying to the effect that there are two things you never want to see being made: UK budgets and Vienna sausage. Yesterday, most eyes in the UK were on the renaming of the City of London as Darlingrad, a brave new world wherein the conventional laws of mathematics don't apply, e.g., a 50% tax on an estimated GBP6bn bonus pool raises only GBP500m.

Meanwhile, another debacle was occurring somewhat further east, as Telekom Austria yesterday issued a tersely-worded recalibration of market expectations for 2010, wherein, despite revenue outlook being in line with consensus, EBITDA was forecast to be 11% below consensus, capex 14% higher, and as a result, operating free cash flow 25% lower. No additional color was offered by way of explanation for the variance, and the market understandably did a 14% tap dance on the share price.

Some friends of mine on the sell-side had a few hours before unfortunately published a buy note on the company. It is common practice for analysts to run their forecasts and note past a company prior to publication, just to ensure there are no factual errors or misrepresentations. Whether that occurred in this case or not, I don't know, but I assume it did, and if so, the fact that the company was on the verge of publishing material information and said nothing is not the sort of thing which endears companies to analysts.

In fact, in this case, the analysts in question, rather than trying to explain things away and goose their numbers to fit their recommendation, have done the right thing, and terminated coverage. They write:

"We spoke with TA after its profit warning yesterday. In sum we understand the following: A few months ago it was quite clear that the four year budget drawn in late 2008 would have to be revised down. But TA goes through the detailed process of drawing up a four year budget only once every 12 months (at the end of each calendar year) - yesterday's announcement follows the conclusion of this process for 2009.

From this we deduce that until this detailed process is completed, TA is largely unable to correct/reset consensus expectations even if trading conditions look set to be very different from the assumptions behind the last communicated business plan (in this case, the one drawn up in late 2008).

We apologise unreservedly for not thinking that this was at all possible. Because clearly it is possible, we believe that we cannot research TA's investment case with any reasonable degree of confidence. We therefore terminate coverage."

This is hard stuff to have to write when you're in their position, and if anything, I think they're being overly polite. I am of the humble opinion that if companies become aware of a material change to outlook over the coming 12 months (I consider EBITDA variation of 11% to be material), there is every incentive (and indeed, in some markets, a regulatory requirement) to issue a formal statement and get the pain over with in a way which preserves some degree of trust and respect from the analyst and investor base. Such a move would also avoid having to surface revelations such as the fact that the four year budget is reviewed once a year, three weeks before Christmas. Investors don't want nasty short-term shocks, but they also don't want persistent nagging suspicions that there is a culture of complacency in such a rapidly changing industry landscape, or more frankly, that visibility is too poor to make credible four-year budgets.

Walk like an Egyptian

2009-12-08T13:44:00.007Z

A little over a month ago, I had an interesting discussion with someone involved in the subordinated debt of WIND Hellas. This is a situation I have followed very closely all year, though I was only interested in the senior parts of the capital structure, for reasons which are now obvious, principally because I have always expected the outcome we have recently seen.

As I explained to them, my thesis was pretty straightforward. The company's capital structure was over-leveraged, and the EBITDA multiple of the company through the senior debt alone was in some cases at a premium to European incumbents, despite having a critical liquidity crisis, compromised competitive position, and Greek macro risk. The implication was that the subordinated debt had little if any value, and Mr. Sawiris' original EUR500m equity check was lying at the bottom of the Aegean. The only way to salvage any equity value would be to align interests with the senior lenders and push out the guys in the middle - the subordinated debt holders. No room for concessions or niceties.

Their response was that they couldn't understand why Mr. Sawiris would risk his reputation and access to capital markets through a UK pre-pack insolvency which would wipe out EUR960m and $275m of subordinated debt. Surely he wouldn't be able to come back to the markets any time soon. I told them I wasn't convinced that he need be too worried about either reputation or access - a lot of cash is waiting on the sidelines, and the market has a chronically short memory.

Sure enough, less than a month since the filing, a sister entity from the Weather complex, Wind Acquisition Holdings Finance SA, comes to market with a EUR500m bond offering. Not only is it serious money, it is also reportedly structured as a PIK note for the first four years. We haven't seen any PIK issues since things started to go south in 2007, and many of the outstanding PIK deals from the Good Old Days have been treated like red-headed stepchildren over the past year. So, having just crushed a boatload of subordinated debt in November, we're now looking at a large, deeply subordinated debt issue which is effectively free money for the first four years. Far from being locked out of the markets, Mr. Sawiris will defiantly get this one away, and I am now prepared to officially elevate him to rock legend status. You may not agree with his tactics, but he certainly gets an A+ for audacity.

Surely investors angered by the WIND Hellas outcome would be inclined to boycott, but I hear price talk of a 12% coupon, and the market is so relentlessly thirsty for yield that I'm pretty confident that when the books close it will either be significantly up-sized or very oversubscribed. I don't know the Egyptian gesture equating to the two-fingered salute, but this will probably do nicely.

Happy Thanksgiving

2009-11-26T15:38:00.002Z

A very happy holiday to all the turkey gobblers across the pond. Here in Britain we are thankful for our universal right to untrammelled internet access, er, d'oh!

A little more conversation...

2009-11-20T13:23:00.002Z

I find it equally amusing and depressing when I hear telcos speak, as they frequently do, about the secret to value creation being in their content strategy. For shareholders, perhaps that's true (I'm deeply skeptical), but for customers and society at large, clearly the greatest value created in communications is in enabling interactions and transactions, or as my friends at Telco 2.0 frame it, "removing friction."

So here's some friction. This morning I took my daughters to school, to find the headmaster and several other members of staff standing at the school gates holding hastily printed signs which read, "Unfortunately, we have to cancel school for all of year 1 and class 9 due to health and safety reasons." From what we could gather, there was a flood overnight, affecting classrooms in one section of the building.

Luckily, (or unluckily, they might say) neither of my daughters was in the affected groups. However, there are around 100 kids who were, and the first notice their parents received of this less-than-minor inconvenience was when they arrived at the school shortly before 9:00. Some of these kids don't live all that close to the school, so their families will have made unnecessary car or bike journeys, while others will have had contend with no childcare backup and unsympathetic employers. The employers, sympathetic or not, will have lost productivity. Overall, this one incident affecting nominally 100 children also affected at least 100 adults and probably nearly as many businesses.

Now, I'm guessing that the school caretaker or some other members of staff were aware of the problem at least an hour or two before the parents and children arrived, but it would have been impossible to phone every affected household to let them know they needed to make alternative arrangements - or so I'm sure the defensive administration would respond. However, phoning every household is a very 1980s sort of solution, and totally unnecessary in 2009.

It's safe to assume that every parent in the school has a mobile phone, so either the local education authority should have an SMS alerting service for this sort of situation, or the school, which seems to pride itself on its level of IT literacy, should set up a Twitter account and encourage parents to follow and/or activate SMS tweets. Some effort would be required, and inevitably this strategy won't cover everyone, but it's a start, and surely it's better than disrupting something like 300 lives and imposing a cost on people/businesses who are just trying to get on with earning a living. And for those delivering the bad news, surely it's a more pleasant alternative to having to stand in the rain with a limp sign encountering withering looks from outraged parents. We have the tools, so why don't we use them?

Tweeting selectively from the Citi credit conference

2009-11-19T09:47:00.002Z

www.twitter.com/jimiinc #Citi

The best scam email of all time

2009-11-18T12:18:00.002Z

That's a bold statement to make, but you have to admire the genius of a scam "cleverly" disguised as a compensation program for scam victims. What was the old saying about "Fool me once..."? I particularly like the professional-sounding "We shall feed with you more modalities..." phrase, as well as the fact that the email address for correspondence is in, of course, the yahoo.com.hk domain. Keep trying guys, at least the entertainment value is continually rising.

<><><><><><><><><><><><><><><><><><><><><><>

ECOBANK NIGERIA PLC
SCAM COMPENSATION OFFICE DEPARTMENT
ECOWAS NATIONS STATE/UNITED NATIONS
2009 SCAM VICTIMS COMPENSATIONS PAYMENTS.

YOUR REF/PAYMENTS CODE: ECB/06654 FOR $500,000 USD ONLY.

This is to bring to your notice that our bank (ECOBANK INTL. PLC) is
delegated by the ECOWAS/UNITED NATIONS in Central Bank to pay victims of scam
$500,000 (Five Hundred Thousand Dollars Only). You are listed/approved for
this payment as one of the scammed victims to be paid this amount.

On this faithful recommendations, want you to alert you that during the last
U.N. meetings held at ABUJA (WEST AFRICA), it was accessed/accumulated of
reported cases of fraud that the money lost by variousindividuals to Africans
scam artists operating in syndicates all over the world today is over $239
Million United States Dollars in year 2007 to fraud in USA alone.

http://www.techspot.com/news/29644-US-Citizens-lost-239-million-from-Internet-
fraud-in-2007.html

In other to compensate victims, the ECOWAS/UNITED NATIONS is now paying
victims of such scam $500,000 (Five Hundred Thousand Dollars Only Each ).in
accordance with the UNITED NATIONS recommendations.

The payments are to be remitted by ECOBANK PLC NIGERIA as corresponding
paying bank under funding assistance by CENTRAL BANK OF NIGERIA. Benefactor
of this compensation award will have to be first cleared by ECOBANK and
confirmed as a victim from Africa Scam before scam payment can be effected.

We shall feed you with further modalities as soon as we get response from you
on how you can receive your compensation payment award.

Send a copy of your response via email or call your remittance officer
quoting your PAYMENT CODE NUMBER(ECB/06654).

NAME: MR.KEN OSAZUWA
SCAMMED VICTIM/REF/PAYMENTS CODE:
ECB/06654 $500,000 USD.
TEL : +234 7025669085

Email: scamvictimstransfer@yahoo.com.hk

Yours Faithfully,
Mrs. FRANCA OSARO
PUBLIC RELATIONS OFFICER

Another incumbent buys open access fiber

2009-11-17T11:55:00.003Z

Private-equity owned companies are frequently the subject of ridicule, due to a perception that they're purely run for cash, by shareholders who are always looking for the exit, and who, in some cases are clueless. That point of view is often justified, and there are other situations where very bright and talented people who are genuinely committed to the business end up in untenable situations, but there are also some comparatively rare situations where the PE sponsors genuinely seem to understand how to build value and innovate in ways which public companies struggle to match.

Take TDC, whose shareholders were not only bold enough to basically pay the record industry to shut up, but are now following KPN into open access fiber, purchasing c.60% of the network assets (apart from those involved in monitoring the grid) of the unfortunately named DONG Energy, for DKK325m cash plus an additional DKK100m in earn-out structured as a revenue share. The key difference here is that DONG has built out much more extensively than Reggefiber has. Two summers ago, when on vacation in North Zealand, I remember driving through small villages, remote by Danish standards, where fiber was being rolled.

By allowing DONG to take the capex and commercial risk in deploying the network, TDC avoided having to listen to lenders complaining and fretting, until the asset was mature enough to buy in. (It always fascinates me that investors prefer M&A to capex.) From DONG's perspective, it seems as though the company struggled to build a customer base in the absence of third party carrier relationships, which of course TDC has in abundance, so it probably was an inescapable outcome that DONG would sell out and leave the telco-ing to the telco.

Britain's Embarrassing Travesty?

2009-11-11T13:25:00.004Z

If you're planning to make an inspirational video about fiber which makes the viewer contemplate suicide within the first three minutes, I think I have a template for you to follow. "Patience is a virtue of the past." Indeed. In fact, it looks like patience in some quarters was exhausted some considerable time ago. Note the call to action towards the end:

If Ofcom will not lay down the law on this one, or at least issue some guidelines or a Code of Practice about NGA marketing to stop this in its tracks, I will personally pay a bunch of very cheap workers to spend as long as it takes out on the Internet making sure that as many websites as possible have either a forum post, blog comment, banner ad or similar on it saying something along the lines of "BT's BET is NOT next generation broadband. Complain now. Boycott BT."

Funny how these things can spread virally and unpredictably, which is something I thought marketing departments were supposed to understand by now. I notice that there currently seems to be no Facebook group with a title such as "BET = Britain's Embarrassing Travesty." Not that I'm advocating that someone start one. But if they did, I would join it.

My big fat Greek restructuring

2009-11-06T10:12:00.002Z

Well, looks like the third party interlopers in the WIND Hellas situation waited a bit too long to show their hand. However, the investment from Weather only delivers EUR50m in additional liquidity to the company, with the remaining EUR75m going to consent fees and transaction costs. Once the subordinated debt holders have been crushed (the FRNs are quoted 3 - 5, and the PIK notes are looking extremely hot at 1/16 - 9/16), the company should save c.EUR95m in interest costs before taking into account the margin increases for the senior lenders. In short, the company should be stabilized by this deal, but things are going to be tight for a long time, and the market still needs to consolidate, so let's call it Chapter One.

A question for European equipment vendors

2009-11-05T11:33:00.004Z

Q: How do you compete with a privately held national champion with a $30bn credit line?

A: Maybe you don't.

(P.S., Starent is in the process of being acquired by Cisco, so you'll probably be seeing them around a bit more too.)

Tuesday morning drive-by

2009-11-03T11:21:00.002Z

Still trying to recover from eComm last week in Amsterdam, and get caught up on other things. I would love to do a lengthy post on eComm, but I don't have the time, unfortunately. Stated simply, I think it is the finest event of its type on the planet. Lots of short and punchy presentations, many of them challenging and provocative, covering a wide range of aspects around communications (note my omission of the prefix "tele"), with a low tolerance level for bullshit, and good representation from people who are actually doing innovative things. Not many carriers were present (I counted four), but then why would carriers be interested in new developments in communications? And no IMS, HADOPI, or any other toxic and delusional acronym-based strategies were to be found - heaven! I gave a 15-minute talk on day one, and moderated a panel on day two. Wish I could have stayed for day three, which sounds like it was very interesting indeed. Take my advice - bookmark the next event and just go. You won't regret it.

Speaking of interesting events - tomorrow I'll be moderating a panel at Telco 2.0 in London, which has apparently seen a huge level of interest and registrations. I'm looking forward to the event and the Thames River cruise which follows. Hope to see you there!

I've come to the conclusion that my "social media brand" strategy is inevitably doomed to be one of fragmentation. Sometimes I have something to say or point to which is suitable for this blog, but which I just don't have time to write a proper blog post on. If you're interested in capturing any of that stuff, you may wish to follow me on Twitter. I know it is probably over-hyped as a medium, but it is imminently suitable to certain types of expression, such as "31bn? That's 3x BT's market cap, or one national FTTH network. What's that burning smell?" Alternatively, you may just wish to friend me - I already consider my mega-uber value readers to be friends I haven't met, so why don't we formalize things?

So, on to the industry/market:

Data centers - You have to love data centers, well I do anyway. The unsung heroes of the web services revolution, they work away in quiet anonymity and throw off disgusting amounts of cash if run properly - and we don't have nearly enough of them. We tried like hell to get a Greater London project funded while at Merrill Lynch, but timing and the parlous state of the firm's balance sheet thwarted us, sadly. Judging from Telecity's statement from yesterday, our investment case still stands.

Ride that high yield bubble - Virgin Media, which is a company I have a lot of time for, despite my frequent mocking posts about open street cabinets, continues to demonstrate that continuity issues in the CFO's office need not be an impediment to sound financial management. Following last week's acceptance of its senior facilities amendment, the company is wasting no time in lining up refinancing options for the lower parts of the capital structure, which is exactly what it should be doing given the opportunity which the market's thirst for yield has created. What looked to be a very steep mountain to climb at the start of the year, has been handled masterfully in my view, and the second lien debt, which is something we loved at the beginning of the year at 50, is now quoted 93.5. I don't often think of congratulating company treasurers, but here's to a job well done.

Greek consolidation - This is a topic we did an awful lot of work on at Merrill Lynch, and the ongoing WIND Hellas saga has been very much on our mind since the beginning of the year. Now a "wild card" bid has reportedly emerged from what most would regard as an unlikely source. However, I have previously worked closely with some of the people involved behind the scenes here, so I, for one, am not surprised, and I think things are going to get very interesting from here.

Waving from afar

2009-11-02T17:33:00.002Z

Folks, a very altruistic Palladium Class mega-uber value reader has commented on my previous post to let us know that he has a surfeit of Google Wave invites, and that if you ping him and ask nicely, he'll pass them on to you. Thanks Peter!

Calling all Bulgarians!

2009-11-02T16:08:00.002Z

If you're Bulgarian and have any views on broadband, my friend and fibrous co-conspirator Benoit Felten needs your help in completing a survey for the good of the country, so get yourself over to the site and take part, faster than you can say Ivo Papazov.

Waving goodbye

2009-11-02T13:22:00.002Z

Okay good people, I have two major problems. Firstly, a number of people have posted requests with no email address. Google Wave makes you more productive, apparently, but not psychic. Secondly, and more importantly, something seems to have gone terribly wrong. Wave crashed earlier and prompted me to refresh, and when I did my remaining invites were gone. I had dished out five and still had three left. I've retained the details of those requests I wasn't able to honor, and if I get more invites, or my remaining ones are restored, your requests will be honored. For those I was able to fulfill, be advised that it may take some time, as it seems there are some scaling issues.

Waving, not drowning

2009-11-02T10:35:00.003Z

Still trying to recover from the eComm experience and catch up on other things, so drowning is not far from the truth, but meanwhile, I have eight [8] Googlewave invitations for first-comers.

My slides from eComm

2009-10-28T10:27:00.002Z

Scribd doesn't maintain the animations, so you may prefer to download it here.

Like I said a few hours ago...

2009-10-21T21:55:00.002+01:00

Data centers are the new steel mills, and every bit as hot. Just a few minutes ago, Equinix announced the acquisition of Switch & Data, at what I work out to be around 10x LTM EBITDA (10.5x if you use numbers up to Q2, and 9.5x using my Q3 guesstimate). I'm sure this is dramatic news for S&D shareholders, but it's really pretty unsurprising if you've been watching what's been happening in the space over the past three years or so, as I have. This is just the opening salvo in what I expect will be a new phase of consolidation, and I would expect European assets to be pretty high on the agenda.

I'm too sexy for my picks and shovels

2009-10-21T13:09:00.002+01:00

An adviser to Goldilocks has apparently been channeling the spirit of Horatio Alger, Jr., and unsurprisingly receiving some unsympathetic coverage in the process. Still, for good or evil, inequality is an inescapable fact of life, particularly in business. So setting aside investment banks, which other brazen, rapacious industry is shamelessly enjoying demand for its product outstripping supply three-to-one, with pricing up 15% this year, in the midst of the deepest recession in living memory? All hail the humble data center.

Don't shrug at ATLAS 2009

2009-10-21T11:16:00.003+01:00

Thanks to @kerryritz for the pointer on this very interesting presentation on the ATLAS Internet Observatory 2009 findings from the NANOG conference. The most interesting findings from my point of view are: 1) the rapid concentration of content sources (only 150 ASNs account for 50% of internet traffic, with CDNs accounting for 10% and Google alone for 6%); and, 2) the apparent decline of P2P in favor of streaming and direct download, although I find it notable that the authors point out that data is distorted by random port selection and the fact that 40% of P2P is encrypted.

Call for input

2009-10-20T13:55:00.002+01:00

I'm in the process of putting together my slides for eComm next week in Amsterdam, and I wanted to ask for your input, gentle reader. If you would be so kind as to send me the three most critical issues which the communications (notice I did not say telecom) industry faces in future, I would be very interested to see them. By critical issues, I mean opportunities and/or challenges, both endogenous and exogenous. I'm just curious to see how your ideas line up against my own.

Cognitive Dissonance

2009-10-15T12:00:00.001+01:00

Is it just me, or are the terms "2016 maturity" and "terrestrial broadcaster" not mutually exclusive?

Christmas come early

2009-10-12T17:05:00.003+01:00

I have two tickets to eComm Amsterdam, 28 - 30 October, up for grabs. One is *F*R*E*E* and the other entitles you to a 50% discount. First come, first served, but please only ask if you are absolutely sure you are actually going to go. Holler at me.

UPDATE: Well, that didn't take long. The free ticket is now gone, which leaves the 50% discount ticket. Don't be shy.

That was the week that was

2009-10-11T13:03:00.002+01:00

I think I may have confused or annoyed a number of mega-uber value readers with my post on the arrival of the Memphibian blog. Make no mistake, it is not supplanting this humble bloglet, but during the first couple of weeks I had to ensure I had seeded enough content there to give it a life of its own. As in everything, I will strive for balance going forward.

So, among the things I noted but failed to comment on last week, here are the ones I found most interesting:

The Skype and European Directories (a MacQuarie LBO) tie-up looks interesting, and I would expect some of the other directories players to follow suit, if they know what's good for them (the jury is out on that one). However, for me the bigger message in this deal is of how the previous owners of both assets squandered their potential. In the case of Skype, it's ironic that only as the business is sold by eBay does it begin to fulfill some of the potential used as rationale for doing the transaction four years ago. And on the directories side, this deal shows the obvious potential of tying together customer data, advertising, and sponsored telephony - something the telcos didn't seem to contemplate when they owned these directory assets. Now whatever value might be generated with this formula once again accrues to someone else...

A couple of big validations for fiber in the week, with BT capitulating on brownfield FTTP, probably in recognition of the threat posed by Virgin's DOCSIS 3.0 marketing, and Telefonica trumping Vivendi's one-month old bid for Global Village Telecom at a 14% premium, with in-market synergies that Vivendi can't get anywhere near.

The profound and ridiculous ends of the iPhone App spectrum were on display on Friday, with Herman pointing us towards the ludicrous (but entertaining) Gym Babes app, while the HealthMap project's iPhone app has generated 1,000 reports since launch a month ago. As the project team says, "This form of participatory epidemiology may alert the public to valuable disease information before it is reported by the media or public health officials," which is bound to have an inestimable value. All this is fascinating, though if Gartner is right in predicting that Android will eclipse the iPhone juggernaut by 2012 due to its open-source framework and multi-vendor backing, then presumably app developers are going to have to start hedging by developing for both platforms. This despite the fact that I am told repeatedly that investors currently have no time or appetite for anything non-iPhone in nature, and Kleiner Perkins Caulfield have taken a highly directional bet on iPhone hegemony.

From the "Yeah, whatever" department

2009-10-10T16:51:00.002+01:00

I think one of the first rules of marketing is that merely repeating an assertion ad nauseum doesn't make it true, particularly if the direct experience of your existing users shows it to be false. Yahoo! seems to be doing its best to pull the outdoor advertising marketing out of its deep recession with this campaign splashed all over London. Meanwhile, I have a colleague who uses Yahoo! mail, and for the past two months, he would say that the internet has been under the control of a Diabolical Denial of Service attack. I don't know if this is an isolated problem, or relates to his being a Mac user (as if that should really make any difference), but seeing his suffering, I am now programmed to ignore or laugh at billboards like this. Also, in case no one at Yahoo! corporate had clocked it, hooded figures like this in the UK are associated with muggings and other pointless acts of antisocial behavior, so my guess is that drivers passing this billboard will immediately assume it is yet another government fear appeal message and pay no attention.

Your lucky day

2009-10-09T14:59:00.000+01:00

One of my colleagues received this message today, which, apart from being risibly written and fundamentally ludicrous, points out just how mainstream Skype has become, if 419 scammers are invoking its name, particularly alongside that of Microsoft.

Date: Fri, 9 Oct 2009 19:03:24 +0800
> Subject: Congratulations!! *You Have Won 850,000.00 GBP
> From: dzplum@yahoo.com
>
>
>
>
>
> World Annual Skype/ Microsoft Internet Users Award
> 102, Denton Manchester Lancashire M34 3GE
> Annual Random Charity International
> United Kingdom
>
> Dear, Lucky Winners
>
> We happily announce to you the draw of 2009 World Annual Skype/ Microsoft
> Internet Users Award International Program held annually, in United
> Kingdom. Your e-mail address attached to ticket number: 500-744-3465-A42
> with serial number: 652-112 and draw lucky number: 7202013-05 which
> subsequently won you lottery in the 1st category of files number:
> FA1345U-ID.
>
> Batch Number.0152k Reference Number.02-QH-05 you have therefore been
> approved to claim a total sum of 850,000.00GBP (Eight Hundred and Fifty
> Thousand, Great Britain Pound Sterlings) in Cheque,
>
> All participants in this lottery program were selected annual randomly
> through a computer ballot system, drawn from 100.000.000 individuals email
> addresses from all search engines. Your e-mail address was picked by the
> automated computer ballot system, which has been programmed for this
> random selection. This has eventually qualified you to won our lottery
> prize.
>
> This promotional program held annually, and was promoted and sponsored by,
> Microsoft Inc, and Skype Internet Companies to encourage the use of
> Internet globally together with enhancing improves the lives of citizenry.
> Please note that your lucky winning number falls within our Europe
> representative's booklet in United Kingdom , as indicated in your file
> number: FA1345U-ID. In view of this, your 850,000.00GBP Cheque have be
> released and forwarded to our United Kingdom regional headquarter in
> Manchester, you are hereby informed to contact Manchester on this
> information, for the immediate commence of your Cheque
>
> Mobile Number: +447024064610
> +447024087960
> E-Mail: worldannualskype@yahoo.com.hk
>
> Fill the following details below to enable the speedy evaluation and
> processing of your won prize. 1 Name, 2 Home address, 3 Telephone number,
> 4 Age and occupation, 5 Ticket number, 6 Serial numbers, 7 File number, 8
> Draw number
>
> For security purposes and clarity we advice that you keep your winning
> information confidential, and not to be disclosed to anyone until your
> claim have been fully processed and your winning Cheque delivered to you.
> BE WARNED!
>
> National Coordinator
> Skype/ Microsoft
> Mr Amoosa Amoosa
>

Benign neglect

2009-10-07T16:32:00.002+01:00

It's quite probable that this will be of absolutely no interest to the vast majority of my mega-uber value readers out there, but on the off-chance that you are curious as to where I've been recently, I've been working on a purely personal side project, partly because it makes me happy, and partly because I feel I need to. It doesn't help that the past couple of weeks in telecom have left me feeling distinctly uninspired - is it just me?

Questions to ponder over lunch

2009-09-24T12:59:00.002+01:00

Is Huawei the Countrywide of vendor finance?

How can a perfect digital copy be considered a "forgery"?

Doesn't "360" also mean turning around to find yourself exactly where you started?

Pimp my panel

2009-09-23T16:13:00.003+01:00

Folks, eComm Europe is coming up fast, October 28 - 30 in Amsterdam, and you'll hate yourself if you miss it. I honestly think the speaker list is unparalleled anywhere, and the format ensures a rich flow of sharp and challenging talks on a wide range of topics of critical interest to those of us linked in the communications value chain. So look into my eyes, look deep into my eyes, and now go and register. I will be giving a talk on day one, and also moderating a panel on day two. The panel format is still being tweaked, but I have submitted the following summary, and I'd be interested to hear your feedback and input in the interest of making it as representative as possible:

Investing in the Telecom Value Chain for a Post-Meltdown World

The world has been through huge financial stress in the past two years, and despite the repeated sightings of "green shoots" by the more optimistic factions on Wall Street, many respected forecasters predict even more dire developments to come: the death of the dollar as a reserve currency, persistent high unemployment and social displacement, drastic cuts in public sector spending, runaway inflation, social unrest, the death of capitalism. While many of these outcomes represent worst case scenarios, we must accept that the "recovery," whenever it arrives, is not going to be a "reversion to business as usual," as the term is commonly defined. Consumers will behave differently and have different definitions of value, businesses will transact differently, entire industries will emerge smaller if indeed they survive at all. Add to this the increasing pressures of urbanization, migration, aging society, and climate change, and the picture becomes even more challenging. What influence will the telecom value chain exert in this new world? What opportunities do the challenges of The New Normal offer investors, and how should they position themselves?

Supersize my toast

2009-09-16T18:21:00.004+01:00

I've seen a lot of stuff recently that I don't understand, but if we needed any evidence that this credit market rally may be getting a bit silly, I think I may have found a compelling shred. A couple of days ago, Blockbuster announced an offering of "up to" $340m in senior secured notes, but LCDNews has just reported that this offering has been up-sized to an unfathomable $675m. Most of the deals I've come across recently have been up-sized, but not doubled. The coupon may be huge, I don't know yet, but what else could make this so compelling that demand could lead to a supersizing like this, especially with incineration such a strong possibility?

Lunchtime drive-by, 16 September

2009-09-16T11:48:00.002+01:00

Europe is grindingly dull today compared with events elsewhere:

Australia - Life gets more interesting with each passing day for Telstra and its shareholders, as it deals with both the implications of structural separation and yet another catastrophic network outage.

New Zealand - The government tells Telecom and Vodafone to take a flying leap with their proposals, in favor of a highly-localized procurement process for open-access fiber.

Taiwan - Taiwan Mobile buys MSO Kbro for 10.0x LTM EBITDA, a great exit for Carlyle into a much more interesting asset. Surely a company with ubiquitous mobile coverage will also desire a more extensive fixed footprint, particularly if it is only 1.2x levered and can afford to do more - i.e., further consolidation seems inevitable.

Adobe/Omniture - I think I understand what is happening here, or at least I understand the rhetoric around it, but Hank Williams' recent post highlights failings which make me wonder just how well the company will engage with the more demanding customer base it will carry as a result of this deal.

Head-scratching time

2009-09-15T13:39:00.003+01:00

Whatever its shortcomings as an industry, one can always count on telecom to deliver unusual and inexplicable M&A activity. Down in Greece, ON Telecoms and Vivodi, two companies I studied in great detail once upon a time in a previous incarnation, have decided to get together, in a somewhat unusual deal. Having presumably already burned a lot of cash on their own company, I'm puzzled as to why the vendors would pony-up for the entire capital increase required to get the deal done, especially when the Greek regulator seems to be giving incumbent OTE more room for maneuver on marketing of bundles. Perhaps there's some trade-off in terms of footprint complementarity, but I would be amazed if that could account for the valuation implied by the deal, EUR250m, i.e., the same as Forthnet's market cap, though Forthnet has more subscribers and also a monopoly position in satellite pay-TV.

UPDATE: Okay, I think I was probably a bit too kind here. I think this is about saving face on both sides. Greece is a pretty unique market, in that one can capture c.85% of ITC spend in just two conurbations - Attica (Athens and environs), and Thessaloniki. There's not much scope for regional niche market approaches, it's pretty much head-to-head in the big two urban centers, and there are already four big players (OTE, Forthnet, Hellas Online, and Wind Hellas) present, which history suggests is typically about the number a single market can viably support. Yes, I know that ON has Fastweb's "secret sauce" to a certain extent, but I'm not convinced that makes much difference against a more nimble OTE, Hellas Online in league with Vodafone, Forthnet, and (eventually) a restructured Wind Hellas. The latter two I do think would make an interesting asset combined, but I don't think this particular deal really moves the needle for anyone.

Battling latency and packet loss

2009-09-11T12:39:00.002+01:00

Many years ago, I worked with a German fellow, whose name happened to be Herman, which unfortunately led to him frequently being referred to as "Herman the German," of course mainly when he was out of earshot. Anyway, Herman was a very bright guy, and possessed very good English, though he seemed to be somewhat lacking when it came to colloquial language, so he had a tendency to substitute business language in everyday situations. For example, instead of saying that someone was chatting up a woman in a bar, he would say something along the lines of, "He's performing due diligence on a possible joint venture." Maybe it was just his peculiar sense of humor.

Anyway, it can't have escaped your attention, dear reader, that I have been remiss in posting of late, and I will borrow from Herman's argot to explain that several critical functional areas of my life have been undergoing fundamental restructuring in recent weeks, inflicting high levels of packet loss and latency on my neural network. My NOC has now resolved the problem, and normal service should resume shortly. In the meantime, please enjoy this, perhaps the funniest telco story in recent history, unless of course you are a Telkom S.A. employee...

I'm too sexy for my product

2009-08-19T13:20:00.004+01:00

Yesterday I was emailed out of the blue by someone from an agency working with Virgin Media on its "Powerful Stuff" campaign, and asking for feedback on the commercial embedded below. I personally think that with reviews it always pays to be careful what you wish for. As a piece of creative it's fine - nicely shot, etc., but it's an elaborately staged yet unimaginative pun (50 Megs, get it? Get it?). Cute, but pointless, and it does nothing to convey the sort of message this company should be telling regarding its competitive strengths.

Despite telcos' repeated attempts to make it something other than an enabling utility, ultimately broadband should be as sexy and thrilling as electricity, water or a tin of Ronseal. The benchmark of success is that it is available and reliable when people need it, and hopefully reasonably priced yet profitable as a business. You turn it on, and it works. And that's certainly something customers should be thankful for, but not excited about. It's a pretty sad comment on broadband development to date that, much like the British rail transport system, people express excitement on the rare occasion when it actually works as intended.

Null points!

Back on the block

2009-08-17T09:41:00.001+01:00

Yet another Virgin cabinet - is this what we mean by open network?
Originally uploaded by jimiinc

I was away in the country last week and spent as little time online as possible. Back now, and with a lot of catching up to do. It's comforting to see that some things back in South London never change. This is Forest Hill Road near Mundania Road, in SE22.

The tracks of my tears

2009-08-07T12:38:00.003+01:00

Azeem has an awesome post on VC fund returns, which I highly recommend, and hats off to CalPERS for keeping everyone honest. Our merry band is generally interested in more mature businesses which are under stress, usually due to inappropriate capital structures dating from the most aggressive vintage of the LBO contagion.

When looking at opportunities in this space, it's always helpful to try to get some insight into the states of mind and motivations of the relevant private equity sponsors, though this is often difficult given the veil of secrecy surrounding the industry. So after reading Azeem's post, I was interested to also discover in CalPERS' site a similar table of private equity fund performance, which like the VC table, is not all-encompassing, but is pretty damned comprehensive, especially when one considers that typically these numbers would not be seen outside the relatively small group of insiders/investors.

There are some stunningly bad IRR numbers to be found here, and I only count 34 funds from the 2005 - 2008 time frame in positive territory, and among those who are down, they are often waaaaay down. Conversely, there is only a handful of funds from the pre-2004 vintages in negative territory. It would be nice to think that the critical issue for the 2005 - 2008 vintage funds is time and a turn in the economic cycle (to break out of the trough in the J-curve), but I'm far from convinced. I would be interested to see a comparison of leverage in pre- and post-2004 deals (no doubt a good academic research project for someone with the time and resources), because my suspicion is that the use of leverage in the '05 - '07 period was, as in the broader economy, freakishly supersized - a last gasp of excess before the lights went out - and that this will preclude many of these deals from ever generating a return. And God only knows what happens to some of these deals if LIBOR/EURIBOR are markedly higher in two to three years' time, which I suspect may be the case.

Looking for a datacenter?

2009-08-06T15:05:00.003+01:00

Just got a notification that these guys are following my Twitter feed, so I went to their site, Data Center Map, which is very cool, so check it out.

More depressing data points for old media

2009-08-06T12:03:00.002+01:00

At the risk of piling on the agony, Le Monde has a nice piece today on the decline of print media within household budgets in France (Google translation here), including this chart showing huge declines for newspapers and books - but keep in mind the last data point is 2005, arguably when the real pain was just beginning. Elsewhere, a colleague noticed a good example of a relatively "uncool" industry seemingly getting the structural shift - UK housebuilder TaylorWimpey's results presentation yesterday (see slide 15) contained a pledge to cut classified ad spending in half (to slightly less than 1/3 of total marketing spend, in favor of online.

Virtual coffee break - 6th August 2009

2009-08-06T09:47:00.005+01:00

OFCOM's latest update on the UK market is out, and no doubt it will prove an interesting read, when I get a moment. Among the headline points, it seems clear that survey respondents would rather lose a limb than cut back on telecom spending, a somewhat unsurprising conclusion, and one which I tried to stress repeatedly during my Telco 2.0 series last year/early this year. A couple of other headline-grabbers are that 21% of internet users have had some experience with VoIP (a 50% increase YoY), and that apparently half of UK internet users (that's 19m people) are on Facebook.

This latter point contains an interesting sub-plot, which is that the proportion of respondents 15 - 24 who claimed to have a profile on a social networking site actually fell from 55% to 50%. Maybe they're shifting to anti-social networking, from Bebo to ASBO, as it were. Or maybe they see the herd of more mature users invading their space and fear being bombarded by ads for laser corrective surgery or invitations to become fans of hip replacement surgery. Churn, baby, churn.

The release of these findings today is ironic to me, coming on the same day as I received a Facebook friend request from a relative in Texas in her mid-60's, and also as ITV, the embarrassing uncle in mid-life crisis desperately in search of a way to remain relevant, gave up the ghost on Friends Reunited. But only after paying a £55m earn-out earlier this year - ouch.

So, who's the online video daddy?

2009-08-05T13:13:00.001+01:00

Yep, you got it. Nice timing to boot.

Into Africa

2009-08-05T11:36:00.002+01:00

This post to the NANOG list struck a chord, as it seems to demonstrate, in near real-time, the dramatic effects that better and cheaper connectivity can have on a market, in this case Kenya. I will look forward to following the responses from the list.

Things I thought I'd never live to see, part 1

2009-08-05T10:20:00.002+01:00

An IPO, in the US of all places, for The Pirate Bay? What next, a strategic investment by Universal Music, Time Warner and NewsCorp?

Ferrari, Ford, or Trabant?

2009-07-28T09:16:00.002+01:00

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.

Mega rebUKe

2009-07-27T10:38:00.002+01:00

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.

Misadventures

2009-07-23T16:20:00.002+01:00

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.

Fiber a la casa

2009-07-21T11:39:00.002+01:00

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.

My small contribution towards VMED shareholder value

2009-07-17T23:00:00.003+01:00

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

2009-07-17T10:51:00.002+01:00

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

2009-07-17T10:29:00.000+01:00

More retro telco oddities

2009-07-15T23:27:00.002+01:00

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

2009-07-15T10:31:00.002+01:00

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.

How not to create a market, 1976-style

2009-07-14T23:50:00.002+01:00

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?

Shock horror newsflash: the consumer is changing!

2009-07-13T13:07:00.002+01:00

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.