» Archive for the 'Telecommunications' Category

Traveler Alert – Data Roaming and the T-Mobile G1

Thursday, June 11th, 2009 by David Goldes

We’ve recently heard from multiple knowledge workers who used their T-Mobile G1 smartphones on overseas trips.   All had a common complaint: they followed T-Mobile’s recommended guidelines to turn data roaming off yet they still received a bill for hundreds of dollars of data usage during the trip.

A report from our client RJ, a road warrior who flies to Europe several times per month, was typical.  After purchasing his new G1 and turning data roaming and data synchronization off, his bill for data roaming was $319.55.  T-Mobile customer service did agree to credit him for the charges without arguing the point – but the customer service representative also said that the G1 will turn data roaming back on regardless of what he does and that “you have to either keep the phone home or keep it off during your trip.”   “It’s sophisticated,” the representative added.  The rep suggested renting a phone from T-Mobile for future trips or unlocking the G1 so RJ could purchase and use a local SIM.

We spoke with T-Mobile to better understand the issue at hand.  A spokesman confirmed that data roaming can be turned off and supplied a written statement issued by the company in December 2008.

It reads:
If a T-Mobile customer would like to use their T-Mobile G1 while outside the country, they should contact Customer Care before they leave to ask that the WorldClass feature be added to their service at no additional charge.  If they choose, customers can also disable data roaming on the G1.  This can be done by going through the following steps: Home Screen > Menu > Settings > Wireless Controls > Mobile Networks > Data Roaming.

There is, however, a caveat:
Some third party applications available for download on Android Market require access to the Internet and have the ability to turn on data roaming when in use. Customers are informed whether an application will use this feature prior to downloading, but should also be aware when traveling outside the country.

As RJ’s customer service rep put it, “It wasn’t your fault.”

David M. Goldes is President and Senior Analyst at Basex.

In-flight Internet Access: The Return Flight

Thursday, May 14th, 2009 by Jonathan Spira

After a pleasant drive from the Bay Area to Los Angeles and a few days of meetings there, I returned to New York via American Airlines Flight 22.  Similar to the outbound flight to San Francisco, once we hit 10,000 feet, I was able to turn on my Lenovo ThinkPad X300 and find several Gogo hotspots.

Gogo became inaccessible 75 minutes prior to landing

Gogo became inaccessible 75 minutes prior to landing

For most of the flight, I was able to surf the Web, watch videos, read news, send and receive e-mail, and even check the flight’s exact position.  I was also able to use my BlackBerry Bold smartphone, including the BlackBerry Instant Messenger (BBM) feature.  Everything worked until 75 minutes prior to landing.  At that moment, the Internet became inaccessible.  The Gogo hotspots were replaced by locked access points labeled “Unknown.”  The purser on the flight said that the service goes down from time to time but it usually comes back on its own.  This time it didn’t.  Aircell, which runs the Gogo network, was unable as of the time of publication to advise what had gone wrong.

American was the first airline to install Aircell’s Gogo in-flight access on its aircraft and it reportedly costs $100,000 per plane to deploy the system.  The airlines clearly see this as an investment in both attracting and maintaining business customers and garnering incremental revenue.  Other airlines offering the service include Alaska Air, Delta, Southwest, and Virgin America. The rollout is in its early stages so, with the exception of cases such as American’s 767-200 fleet, where all of this type aircraft have the service installed and the routes (e.g. JFK-SFO and JFK-LAX) are predictable, it is difficult to predict on which flights the service will be available.

Despite the hiccup, in-flight Net access is useful to business and leisure traveler alike.  If only a tech support plane could have flown over to help us out….

Jonathan B. Spira is CEO and Chief Analyst at Basex.

EBay Hangs Up on Skype… But Who Will Call Next?

Wednesday, April 15th, 2009 by David Goldes

EBay purchased Skype in 2005 because it had the resources to do so.  At the time the deal was announced, Jonathan Spira wrote that “the purchase of Skype serves notice to the telecommunications industry that voice is merely another service delivered in a data setting.”

Since then, Skype has indeed become a telecommunications giant, albeit one that didn’t seem to have any of the promised synergies with its new parent.  This week, after months of speculation on the company’s future, eBay announced that it will sell Skype via an IPO in 2010.

Before that happens, Skype will have to resolve an intellectual property dispute with Skype founds Niklas Zennström and Janus Friis.  Joltid, a company they founded, retained ownership of the peer-to-peer technology Skype uses and this was licensed back to eBay.  Recently, Joltid said that eBay was in breach of their agreement and eBay has asked a U.K. court to intercede.

The 2010 date gives eBay lots of time to continue to shop the company.  Negotiations with Skype founds Niklas Zennström and Janus Friis reportedly fell through but, absent the founders’ involvement, does it still make sense for Skype to operate as an independent company?  After all, how extensible – or profitable -  is Skype’s most-used feature: free calls to other Skype users.  The company has over 400 million of them (the figure was 405 million at the close of 2008) and revenue for the year was up an impressive 44%.   In addition, Skype is first starting to explore the business market – and that market is willing to pay for certain services.

The list of potential buyers most frequently mentioned is noticeable for an absence of telecommunications companies such as Deutsche Telekom, AT&T, Verizon, and BT.  Any one of these could build an instant bridge to the future of telephony by acquiring the company.  We’ll find out which telecoms company has a true vision for the future when we see an announcement of Skype’s sale in the next three to six months.

David M. Goldes is the president of Basex.

In the Briefing Room: Virtual PBX iVPBX

Thursday, April 2nd, 2009 by Jonathan Spira and Cody Burke
1947 Stromberg Carlson PBX

1947 Stromberg Carlson PBX

IP-based telephony for smaller organizations is starting to get interesting again.  Last week, Skype introduced Skype For SIP and now, Virtual PBX is launching the iVPBX, a fully featured hosted PBX offering that supports Voice-over-IP (VoIP) softphones and SIP-compliant desk phones. [SIP is the prevalent open standard for business telephony networks and supports “sessions” in an IP network.] Built on the open systems platform that Virtual PBX introduced in November of last year, the iVPBX routes calls over the Internet to extensions using Gizmo5 VoIP phones as an alternative to using more expensive landline technology for the call.

Hosted PBX systems are the twenty-first century equivalent of Centrex, a PBX-like service developed in the mid-1960s where the switching took place in the telephone company’s central office; this contrasts with a PBX system, where the equipment is on site.  While Centrex was ideal for larger organizations that occupied multiple buildings or a campus, hosted or virtualized PBX services are ideal for small businesses, especially those where employees are found in many different locations.

The new iVPBX separates itself from more traditional hosted PBX systems in several ways, including pricing.  Traditional systems are generally priced based on a monthly allowance of free minutes, with a per-minute charge that kicks in when the free minutes are exhausted.  The iVPBX differs in that it allows unlimited inbound calling and does not have a per-minute fee; instead it relies on a per-seat pricing plan, around ten dollars per extension.

The iVPBX is being launched as a joint offering with Gizmo5, a VoIP provider, although it will work with any solution that is fully SIP compliant and uses North America Numbering Plan (NANP) phone numbering for destination identification.

The offering is good news for existing Gizmo5 users as well as Virtual PBX customers.  For the former, the iVPBX offering adds PBX functionality such as call transfer, ACD queues, and automated attendant.  For the latter, new functionality will include call recording, instant messaging, and file sharing.

Both companies will be cross-marketing and selling the combined services, although, according to Greg Brashier, COO of Virtual PBX, the company will be looking to work with other VoIP providers who are also fully SIP compliant.

For Virtual PBX, similar to the quandary faced by Skype, the challenge will be how to communicate benefits to customers without the requisite flurry of acronyms.  For many, the low price point will suffice, but the enhanced functionality that users get from the iVPBX makes it worthy of consideration even for those who are not terribly budget conscious.

Jonathan B. Spira is CEO and Chief Analyst at Basex. Cody Burke is a senior analyst at Basex.

Test Drive: BlackBerry App World

Thursday, April 2nd, 2009 by Jonathan Spira
BlackBerry App World Categories

BlackBerry App World Categories

BlackBerry App World is now open for business.  The new application store is available from BlackBerry smartphones with a trackball or touchscreen such as the Pearl, Bold, Curve, and Storm; it does not support older BlackBerry devices with side wheels, which means that millions of knowledge workers with these models cannot benefit from what the store has to offer without replacing their hardware.

I only had an hour or so to explore the store; for this I used a BlackBerry Bold and AT&T’s 3G network, later switching to Wi-Fi to see if downloads were significantly faster (they weren’t).  To install, I had to first go to a Web page and initiate the installation process.  That put the App World icon in my download folder (incidentally, if you don’t know to look there, you won’t find it) and I moved it to the top-level menu.  Once in App World, I found hundreds of applications in categories such as News, Weather, Finance, Games, Productivity, Social Networking, and Health.  Many are free but some were relatively pricey ($59.99).

Installing a free app was simple and easy.  I downloaded multiple apps, including Viigo and Slacker Radio, and was soon listening to the Leningrad Philharmonic Orchestra playing the Sabre Dance. I was able to also check the weather and news reports in Viigo while the radio continued to play.  I then added the Nobex Radio Companion and was able to choose from thousands of radio stations in the U.S.  Nobex will also e-mail you song details with links that support Apple iTunes and Amazon.com, although you can’t purchase music directly from the BlackBerry at this time (but you can forward the e-mail to your computer to make the purchase).  I didn’t download the App World’s Facebook app; it’s the same one that’s been available for the BlackBerry for quite a while.  I couldn’t find a Twitter client although CellSpin and Viigo promise to support Twitter.

Purchasing applications was far clumsier than what Apple offers in its App Store: the first time I selected an application I wanted to purchase, AP News for $2.99, instead of offering to charge it to my mobile phone number, it offered me one payment choice: PayPal.  For those users who either don’t have PayPal or don’t wish to open a PayPal account, this seems a bit limiting.  Even when I tried to make the purchase through PayPal, it didn’t go through: “There was a problem connecting to the payment system. Your transaction may not have been processed…”  The best it could then offer me was an “attempt to retrieve the application purchase.”  It turned out that the charge had gone through and I was later able to install the AP app.  After testing it, I liked the free Viigo app better for news and information.

A few naming conventions were a bit odd (of what benefit is a “Boston News Web Shortcut” or “Fox News Bookmark”?) but in general, it was easy to find and learn about new applications.  Most have screen shots and product summaries and many have reviews.  I found that e-mailing a link from App World (so I could read more about the application on my laptop) did little good as the link was only accessible from the device.

Features include keyword search, reviews, recommendations, and a folder called My World, which keeps track of downloaded applications and facilitates reinstallation and transfer of applications to a device.

Jonathan B. Spira is CEO and Chief Analyst at Basex.

Test Drive: Skype for iPhone

Wednesday, April 1st, 2009 by Jonathan Spira
Skype for iPhone Account Screen

Skype for iPhone Account Screen

Skype is a popular communications tool for many knowledge workers, especially those on the go.  Released on Tuesday, Skype for iPhone, which also works on the second generation iPod touch, adds Skype calling and instant messaging to both devices and is available from Apple’s App Store, free of charge.

I installed it on the iPod touch as soon as it was available and, while there have been a few glitches, my experience has been pretty much stellar.  The application opens up myriad communications possibilities for the business traveler, including the ability to assign multiple “local” numbers to an iPhone or iPod touch at very low cost.

Skype for iPhone allows users to place free Skype-to-Skype calls when connected to Wi-Fi anywhere in the world.  To reach non-Skype users at rates that are typically a few cents per minute is just as easy.  The sound quality of the call was crystal clear for me but those I was speaking to reported that I sounded a bit distant.

Skype instant messaging is available on all supported connections (Wi-Fi, 3G, GPRS, or EDGE) to both individuals and groups. Users can also edit contacts and set their presence status.

Try it from any supported device from the Apple App Store.

Jonathan B. Spira is the CEO and Chief Analyst at Basex.

In The Briefing Room: Skype for Business

Thursday, March 26th, 2009 by Jonathan Spira and Cody Burke

Skype is perceived as a consumer service that lets computer users make inexpensive and/or free calls to friends and family near and far.  It isn’t necessarily a service one would associate with business users; however for the past few years Skype has been moving more and more into that territory.

Josh Silverman, Skype’s president, recently estimated that 35% of its customers use Skype for business purposes in addition to personal use.  Especially in a world where distance is shrinking (along with the economy), having a service that provides local numbers in multiple countries around the world, as well as the ability to call them for pennies if not free, has become a necessity for many knowledge workers.  Business travelers, especially those who travel internationally, are also demanding more sophisticated and less expensive communications alternatives.

This week, Skype launched the beta version of Skype For SIP, a new offering that connects to corporate phone systems that support Session Initiation Protocol (SIP).  SIP is the prevalent open standard for business telephony networks and supports “sessions” in an IP network.  A session could be as simple as a standard phone call between two people or it could be a multimedia, multi-party conference call.

Skype For SIP will allow users of SIP-enabled phone systems to use Skype to make calls from a standard office telephone, instead of requiring the user to plug a headset into a personal computer.  The service supports calls placed to any phone number, be it landline or mobile, and also supports  inbound calling and the establishment of local numbers, available in many regions around the world, that then connect into the corporate telephone system.

Skype clearly recognizes that corporate voice traffic is a serious business where it will compete with traditional carriers as well as newer Voice-over-IP providers.  Along with some strategic rebranding on the Skype for Business Web site (a very serious darker blue and grey color scheme has replaced the bright blue and cloud theme of the consumer site), the SIP integration will open up myriad potential applications for the deployment of Skype in the enterprise.

Skype is already integrated with Digium’s open source Asterisk telephony platform, which allows Asterisk users to make, receive, and transfer Skype calls from within their phone system.  Skype For SIP for business makes it possible for any SIP-based PBX system to integrate with Skype features.

Skype sees SIP for business as a major component of its strategy to attract corporate customers in addition to individual business users.  In order to fully develop this channel, however, Skype will have to form partnerships with telephone system providers in the SMB market.  It plans to certify partners to sell and support Skype business offerings although details on this front have yet to be released.  For the large enterprise space, should Skype choose to solicit business there, the company will need to develop a corporate sales force as well.

Regardless of how it is achieved, support for business users will be crucial and Ian Robin, head of sales and marketing for Skype For SIP for business, told us that, insofar as individual user support is concerned, he is aiming towards being able to support business users in their native languages anywhere in the world quickly and efficiently.  It was only 19 months ago that Skype went dark for two days for almost all of its users  and the company clearly wants to avoid such a repeat performance when it is offering services in the enterprise space.

Jonathan B. Spira is the CEO and Chief Analyst at Basex. Cody Burke is a Senior Analyst at Basex.

Whither Nortel? To the competition…

Thursday, March 12th, 2009 by Jonathan Spira

Back in January, in writing about Nortel’s trip to bankruptcy court, I commented that one possible outcome might be that the company break itself up into pieces and that a likely acquirer for the enterprise unit might be Siemens Enterprise Communications.

According to an article in the Wall Street Journal, Nortel may be in talks right now to do just that – and possible acquirers of the enterprise unit include not only Siemens but Avaya.  Nortel has several strong businesses, including its wireless unit, which has continued to see strong sales from U.S. mobile operators, and the enterprise unit, which despite the company’s travails, has a strong customer base and equally strong sales.

The company’s fate may not be determined yet for months but the bankruptcy process in the U.S., as well as in Canada, requires the company to seek the most value for its creditors, so ultimately this scenario may play out.  The Journal article reported that one possible purchaser of the wireless unit might be Nokia Siemens, a joint venture of Nokia and Siemens.  If Nortel’s assets were swallowed whole by the two units Siemens AG spun off, the irony would not be subtle.

Jonathan B. Spira is CEO and Chief Analyst at Basex.

FiOS Follies

Wednesday, February 18th, 2009 by Jonathan Spira

First announced in July 2004, Verizon FiOS couldn’t come to my neighborhood in New York City soon enough. Using fiber-optic connections instead of copper wire to bring telephone service, Internet, and television into the home, FiOS (which stands for Fiber Optic Service) was certainly worth the wait. So was the pain of the installation process and problem solving that followed.

After five hours plus, and a call for a more experienced installer, my FiOS service was up and running – more or less.

The installation consists of bringing the fiber-optic connection into the home and terminating it in an optical network terminal (ONT), which serves as an interface to inside wiring for telephone, television, and Internet access.

The TV service itself is superb, with better picture quality than our cable company (Time-Warner) had ever provided. The multi-room DVR (digital video recorder) system allows streaming of recorded programs (HD and standard) to other TVs in the home. Widgets provide local traffic and weather and local and national news on the top of the screen while programs continue in a slightly smaller size below.

The FiOS Interactive Media Guide has an easy-to-use tabbed interface and allows searching for words that appear anywhere in the description. One can remotely program the DVR via the Web (or using a Verizon mobile phone). The service features over 100 HD channels, 500 all-digital channels, and 14,000 video-on-demand titles (8,500 are free).

The Internet service is lightning fast. It consistently measures close to 20 Mbps, about seven times faster than my DSL service ever was. It’s so fast that my partner and I can each watch a different streaming TV show on our respective computers without any problem (with DSL, one show was frequently more than the service could handle).

It was the plain, old telephone service (known in the industry as “POTS”) that turned out to be the big problem. The day after installation, I noticed that many of my calls were not going through; instead, after dialing, I would hear an ACB recording (“We’re sorry, all circuits are busy…”). After weeks of investigation, this turned out to be a software error; my phone line was coded as an account disconnected for non-payment. I also found that I couldn’t place a call a few times a day; pressing the number pad would simply not break the dial tone. Then a reorder tone (sounds like a fast busy signal) would follow, then a message stating “if you’d like to make a call, please hang up and try again.” I told the repair bureau it was a bad line card but they didn’t seem to believe me. This problem took over two months to resolve and involved dozens of phone calls and the implementation of odd fixes at the phone company’s suggestion (twice they had me unplug all of my phones and they replaced the ONT and also sent a technician to check the inside wiring). Two months later, the problem was determined to be a bad line card in the Nortel softswitch.

A few small glitches remain to date. The remote set-top box loses the connection to the main DVR several times a day and it also has trouble playing recorded programs longer than 30 minutes. In such cases, it loses track of where it is. (Verizon promises a fix for the first problem shortly and advises that the second problem is being worked on.) In addition, the problem in placing a call mysteriously returned for two days recently and then disappeared again.

By this time, you are probably wondering if getting FiOS is worth it – and my answer is a resounding “yes.”

The clear sharp television picture and the lightning fast Internet connectivity are simply head-and-shoulders above any other service I have seen and I saved the best for last. Even with faster speed and sharper picture, I’m saving money. A bundle including TV, Internet plus telephone service is $99.99 per month plus taxes and fees (previously I was paying 60% more for inferior service).

Jonathan B. Spira is the CEO and Chief Analyst at Basex.

Whither Skype?

Thursday, January 29th, 2009 by Jonathan Spira

Recently, there has been some degree of speculation in the blogosphere as well as the mainstream press about the future of Skype, given eBay’s disappointing profits in 2008.  The Industry Standard went so far as to predict that Google will acquire Skype by August 31, 2009.

Whether or not there is any truth to the rumor – and this Skype for sale rumor has come and gone several times before -  it does present us with a good opportunity to focus on Skype as a company.

The 2005 acquisition of Skype, founded in 2003 by Niklas Zennström and Janus Friis, by eBay for $2.6 billion was somewhat of a mismatch, yet it allowed Skype to flourish and innovate largely unimpeded. Today, Skype needs to continue to build its business and grow on the successes of last year but eBay may not be in a position to support that model going forward.  Indeed, eBay needs to get its own house in order and improve its financial picture.

As I wrote in my 2005 analysis of eBay’s acquisition of Skype, the purchase of Skype served notice to the telecommunications industry that voice was merely another service to be delivered in a data setting, and that the market for voice calling, as we know it today, was simply fading away.

EBay’s acquisition of Skype made little sense at the time (the company attempted to justify the acquisition by promising to use the service to connect buyers and sellers and it did indeed add Skype functionality to auction pages).  Today it makes even less sense for eBay to continue to hold onto the company and management might as well cash in if they find a willing buyer.

Meanwhile, Skype has become a global telecommunications giant, with 405 million users worldwide (a 47% increase from 2007).  In 2008, Skype accounted for 8% of the world’s international calling minutes.  Surprisingly, or perhaps not, 30% of Skype usage is for business purposes.  25% of Skype-to-Skype calls use video.  And in Q4 2008, Skype experienced a 61% increase in SkypeOut calls (a total of 2.6 billion minutes).

A new parent might be able to find new synergy with the company, which could be used to expand Skype’s current largely consumer base into the small- and medium-sized business market and beyond.

The fact that Skype has continued to grow as an entity despite the mismatch with eBay is a testament to the potential this market has.

EBay purchased Skype in 2005 because it could.  Google, the News Corporation, Microsoft, and Yahoo were all said to have had an interest in acquiring the company but eBay was willing to put up the most cash and, because of the differences in business models, was also willing to leave the company alone to continue to innovate (unlike the course of action that Google or Microsoft may have followed).

In theory, potential acquirers could include Verizon or AT&T, a move that would give one of these traditional telephony companies a gigantic push into 21st century consumer communications.  Microsoft or IBM might also be interested, the latter less so given the consumer nature of the business.  Cisco is yet another contender: they certainly have the cash and Skype’s core functionality aligns nicely with what Cisco is doing in multiple areas but Cisco may simply not be that interested in what is perceived largely as a consumer offering.  We can surely rule out Yahoo, which continues to be on Microsoft’s acquisition radar, and while Google has progressed with its own technology a land grab still might work for them and they have the cash to make the purchase.

Regardless of what transpires, I suspect that we will be hearing a lot more from Skype in the not-to-distant future.

Jonathan B. Spira is CEO and Chief Analyst at Basex.


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