Here is what’s happening in the telecom industry today:
For about a thousand years telecommunications companies have relied on analog wires connected through the land to dominate and capitalize on humans’ desire to speak to each other. The fact that few rarely have anything worth hearing is not the point.
Since 1940, Telcos have enjoyed massive success.
The cloud is about to either radically change that, or radically change the telco.
When the cable guys came out with IP phone services to your house at 1/5th the cost of your standard land line, the Telcos fought it (of course). Now all of your phone service is IP, whether you know it or not, or whether you still use your Telco for it or not.
The Telco survived because it adapted to a new reality (And because humans are lazy).
Since the dawn of the Cloud Era (you know, way back in 2008ish), I’ve been trying to figure out how the monolith organizations such as Telcos were going to play in this transformative era. At first they did what they always do — “Oh, a shiny new business opportunity, we’ll do it too!” — they put up infrastructure as a service (Telcos are the equivalent of the “channel” historically for infrastructure vendors – and got “stuffed” with gear in the exact same way. Now they are trying to find a means – any means – to get someone to use that capacity). Then they started offering some kind of services themselves – backup has been a popular one, though since Telcos don’t speak that language, they tend to languish or focus (rightfully) on consumers.
But what is a Telco? A telco is a communications infrastructure provider – who happens to have the most important thing required in this transformation – a direct customer billing relationship.
Now that all Telcos – and all enterprises – have adopted IP-based telephony, the stage has been set for the next wave — which will be complete cloud-based unified communications (including video) services.
Telcos will have to adapt to providing these services in order to retain their value over the next 10 years, or they will be relegated to being bandwidth brokers alone.
Enterprises will want to outsource ALL of their complex UC/Video needs the exact same way they outsourced their complex CRM needs. As a matter of fact, this is exactly the kind of value added next generation service SalesForce should be providing – since the whole point of “unified” now means “integrated” and SalesForce is the integration platform of choice for most businesses.
SalesForce won the CRM war not because it taught the market to want CRM – it won because the market wanted CRM but no one delivered it in the way buyers wanted to consume it – until SalesForce. Make it simple and give it to me as a service. That’s how people want to consume complex infrastructural/core stuff. Unified communications and video are the exact same thing.
So, there is no SalesForce for UC – yet. This is why Telcos have to get their shit together here, lest they miss out on a massive global movement yet again.
The arms dealers will be interesting to watch evolve. It’s still way early, but Microsoft has a play – and they sure have a cloud initiative. IBM has the cloud, but not a play yet. Dell and HParen’t doing anything that I can see. People like Polycom will be interesting to watch. Ciscomade a big bet here long ago – and is doing quite well (although until they or a partner deliver it as a cloud service, they will have the same problems as Siebel did early on with CRM – way too complex and expensive for a normal company to deal with)
The existing arms supplier to the Telcos for IP Telephony version 1.0 is Broadsoft, but Telcos are mumbling that they don’t have the chops to be there for version 2.0. Thus far, while there are a few contenders, the one I’d bet on is Thinking Phone Networks in Cambridge, MA. Little, but they seem to have all the right parts, people (CEO is a continuous home run hitter), and are built for the cloud. They have very large, very global players cruising in and out of the peoples’ republic of Cambridge as of late, and I know of at least one multinational global conglomerate OEM deal about to happen. I don’t know enough about the others (yet) to be able to tell who has a legit chance or not. This is a new space for me, but one I do find fascinating.
My point isn’t to call the winner, my point is to call the next market in this space. Just like the big banks said “no one will ever buy stock online” or the Telcos said “no one will ever use an internet phone system” (How are Nortel and Avaya doing these days?), both have evolved WAY beyond from what could be – to what should be. We don’t want to own and manage PBXs anymore then we want to run our own power plants. It’s a natural cloud-based service.
My data of record is in the cloud on salesforce – connected/integrated seamlessly with my communications – and none of it sits on my site. I rent what I need when I need it.
It’s the reason I now run Apple everywhere in my life. It just works. And that’s how all this stuff is supposed to be.
by Steve Duplessie
From the Wall Street Journal
As of today, Verizon Wireless’ (VZ) LTE network cover more than half of the U.S. population. The carrier lit up 15 new markets today and now blankets a population of 160 million in 117 cities around the country.
The carrier launched and expanded its 4G service today in Tulsa, Okla..; Fort Collins, Colo.; Lansing, Mich.; Omaha, Neb.; Council Bluffs, Iowa; Northwest Arkansas, Johnstown and Altoona, Penn.; Memphis, Tenn.; Ithaca, N.Y.; Syracuse, N.Y.; Provo and Orem, Utah; greater Worcester, Mass.; Cincinnati and Columbus, Ohio; the metrowest area of Massachusetts; and the capital region of New York.
The carrier appears well on track to meet its goal of reaching 185 million potential customers with its LTE network by the end of the year.
New movement in mergers and acquisitions in the telecom space has emerged as Global Crossing, a provider of telecom services to enterprises, government and telecom carriers, has announced an agreement to be acquired by Level 3 Communications Inc.
Level 3 will take ownership of Global Crossing for stock shares valued at $23.04 per share. The terms of the agreement dictate that Level 3 will issue 16 of its shares for each share of Global Crossing. The deal price is a 56 percent premium to GLBC’s closing price on Friday of $14.80.
The two companies said in a joint statement on Monday that the deal value is $3 billion, which includes Level 3’s assumption of $1.1 billion of Global Crossing’s net debt.
According to Level 3 Chief Executive Jim Crowe in a statement, the fit between the two companies’ networks, services portfolios and customers has proven to be compelling. Level 3 is a provider of fiber-based communications services.
The companies also said that ST Telemedia, which holds 60 percent of Global Crossing, has agreed to vote for the offer, subject to certain conditions.
A report in the Wall Street Journal shows the companies’ combined network will serve a customer set with owned networks in more than 50 countries and connections to more than 70 countries. The deal is expected to generate synergies from network expense savings, operating expense savings and reductions in overall capital spending.
The deal gives all Global Crossing equity holders 16 Level 3 shares for each of their common or preferred shares. With Global Crossing valued at $23.04 per share that makes for a 56 percent premium based on Level 3’s close Friday at $1.44.
According to Level 3 officials, the company adopted a shareholder rights plan designed to protect its federal net operating losses. The plan is expected to deter trading that would cause an ownership change that could hurt the company’s ability to use the tax assets. The deal brings the company significantly closer to such an ownership change.
For the past two years, Level 3 has posted straight quarterly losses as many businesses put their Internet- networking services spending plans on hold. Some analysts predict that business spending on tech is picking up again.
Susan J. Campbell is a contributing editor for TMCnet and has also written for eastbiz.com.
- Written by Susan J. Campbell
- Edited by Janice McDuffee
Thinking Phone Networks (TPN), a leading supplier of SIP trunks and hosted VoIP and Unified Communications services, continues to receive accolades from those who monitor the telecommunications industry. This week, TPN’s “ThinkingSuite” unified communications platform received the 2010 Product of the Year Award from Internet Telephony, a major industry trade publication. Additional information is provided in the attached press release.
ValuLink Technology Solutions has a proud and long standing relationship with Thinking Phone Networks. Because of its vision, its operational excellence, and service quality levels so high it is able to provide a 99.999% service uptime SLA, TPN holds premier provider status with ValuLink where a number of IP services and larger customers converge.
This week’s Internet Telephony announcement follows a string of many honors Thinking Phones has recently received, including their inclusion in both the Gartner Inc. “Unified Communications as a Service” Magic Quadrant, and ABI Research’s Hosted VoIP and Unified Communications Top 10 Matrix.
Double-digit growth over the next five years in terms of total spending has been predicted for the US telecommunications industry. Insight Research’s new market research report titled “Telecom Services in Vertical Markets, 2010-2015″ reports this speculation. The sluggish economy with little or hiring in many industries will however not impact this expected growth.
At the end of 2010, $146 billion for telecommunications services were estimated to be spent by all US businesses. According to the Insight report, by the close of 2015, spending on wired and cellular calling will grow to $269 billion. A compound annual growth rate or CAGR of 13 percent is therefore represented over the forecast period.
All the growth in the telecommunications industry is being created by business spending for cellular and other wireless services. Over the five year forecast horizon, all US business spending for wireline services will be essentially flat. Over the period of 2010-2015, wireless expenditure is however expected to grow at a CAGR of 23.5 percent.
The market segments of construction; financial, insurance, and real estate; professional business services; and transportation will be the biggest spenders on cellular services. 14 vertical industries categorized by the NAICS have been analyzed by the study. Corporate spending for wireline and wireless telecommunications services in each of the 14 industries has been the focus of the study.
In a release, Robert Rosenberg, president of Insight said, “The year 2010 – like 2009 – was all about a shaky economy, unemployment hovering at 10 percent, and retrenchment in every industry sector we examined.”
According to Rosenberg, there are no new businesses being formed. Existing businesses are also retaining fewer employees. Existing employees, however are made more productive with wireless services. New ways to reach potential customers are also provideded to business with wireless services. Wireless is therefore responsible for the growth in demand for telecom services.
By Calvin Azuri, TMCnet Contributor
Calvin Azuri is a contributing editor for TMCnet.
Edited by Jennifer Russell
FOR IMMEDIATE RELEASE
January 20, 2011
Barbara Boshoven, VP of Corporate Affairs, email@example.com, 616-988-7000
Christine Hoek, firstname.lastname@example.org, 616.662.9241
Expansion responds to customer demand.
US Signal Announces Completion of Major Illinois Expansion
GRAND RAPIDS, MICH. — US Signal today announced that the expansion of its long-haul fiber network into Southern and Central, Ill., St. Louis, Mo. and Southern Indiana is complete. A leading data service provider in the Midwest, US Signal has been a pioneer of connectivity for more than a decade.
“We are pleased to announce the completion of our Southern Illinois expansion,” said Stephen Oyer, US Signal’s co-chief operations officer. “Expanding our fiber routes throughout our footprint is critical to US Signal’s strategy of responding to customer demand.”
This expansion will add approximately 1,000 miles of long-haul fiber to the US Signal network. The expansion is part of US Signal’s commitment to being the most dependable, flexible, and reliable provider of data bandwidth in the Midwest. As the nature of the work environment evolves to embrace mobility, US Signal’s expanded presence allows its customers to remain connected and have access to the information they need when they need it, using the stable network provided by US Signal.
The expansion includes central offices in the cities listed below:
· Bloomington, Ill. (BLTNILXD)
· Peoria, Ill. (PEORILPJ)
· Springfield, Ill. (SPFDILES)
· Mattoon, Ill. (MTONILXC)
· Centralia, Ill. (CENLILCE)
· St. Louis, Mo. (STLSMO01 and STLSMOZC)
· Terre Haute, Ind. (TRRHINXA)
“This expansion is a key component to US Signal’s philosophy of connecting key markets with advanced data transport services,” says Kirk Dombek, director of business development. “The newly completed long haul routes enable US Signal to deliver advanced products like Virtual Ethernet Service, which provides access to a fully meshed, scalable and reliable network to support any data bandwidth providing a multitude of options for our customers.”
According to Dombek, “The value of Ethernet for businesses is the ability to mix and match any of the available Ethernet access types not only in metro areas, but also across the entire US Signal footprint. Virtual Ethernet Service reduces the complexity of a customer’s network configuration and, therefore, interface costs are greatly reduced and multiple access types are offered.”
US Signal’s network now includes more than 9000 route miles of long-haul fiber and more than 1100 miles of fiber optic metro rings in 23 markets connecting regions in Michigan, Ohio, Indiana, Illinois, Wisconsin and Missouri. The US Signal network provides on-off ramps comprised of major carrier hotel locations, incumbent telephone company central offices and other lit buildings.
About US Signal
The US Signal network, one of the largest in the Midwest, includes more than 1100 route miles of fiber optic metro rings in 23 markets and over 9,000 route miles of long-haul fiber connecting more than 150 on-off ramps, comprising major carrier hotel locations, incumbent telephone company central offices and other lit buildings.
For additional information on US Signal please view our Vendors page and click on US Signal.
ABI Research, a provider of in-depth analysis and quantitative forecasting of trends in global connectivity and other emerging technologies, recently published the results of the latest study, the “North American Hosted VoIP and Unified Communications Service Providers Matrix.”
The study has ranked Thinking Phone Networks among the Top 10 North American Hosted VoIP and Unified Communications Service Providers based on its recent designation by Gartner, Inc., as a unified communications Magic Quadrant Visionary.
ABI Research has developed the Top 10 Matrix as an analytical tool, which has been designed to provide a clear understanding of vendors’ positions in specific markets and based on several unique criteria such as innovation and implementation among others. The ABI Research report states that the North American hosted VoIP and Unified Communications market continues to display strong growth, driven by the need enterprises’ have to cut capital expenditure through outsourcing their communications.
In a release, the president and CEO of Thinking Phone Networks, Steve Kokinos, said, “Thinking Phone Networks is honoured to be ranked by ABI Research among the Top 10 hosted unified communications service providers. We view our inclusion in the Top 10 as recognition not only of rapid growth, but also of the real value our cloud-based unified communications services are providing to enterprises seeking to streamline business processes.”
Thinking Phone Networks, is focused on unified communications-enabling enterprise organizations and the company’s innovative ThinkingSuite cloud ecosystem is a powerful combination of core unified communications capabilities with a powerful analytics engine and application integration on a single hosted platform. The Unified Communication services have significantly changed the way distributed enterprises collaborate, streamline business processes, and respond to customers. The cloud-based ThinkingSuite unified communications services are available in the market for immediate enterprise deployment.
By Carolyn J Dawson, TMCnet Contributor
To learn more about Thinking Phone Networks please view the Vendor page and click on Thinking Phone Networks.
Panting for a Verizon iPhone? Read this first. We weigh the pros and cons of the two network providers
For more than three years, iPhone owners have grumbled about dropped calls and slow service on AT&T (T), the exclusive cellular network for Apple’s (AAPL) transformative device. Now they’ll have the chance to see if Verizon (VZ) can do any better. The company recently announced it will start selling iPhones on Feb. 10. (Existing customers can pre order the phone on Feb. 3.) For those who still haven’t chosen sides in the AT&T vs. Verizon showdown, consider these points before signing a contract:
Price: Verizon customers will pay the same as AT&T’s—at least for the device itself. A 16-gigabyte iPhone costs $200, while the 32-gigabyte model is $100 more. The more important retail factor, however, is the monthly service charge, and Verizon hasn’t released any details yet. The industry scuttlebutt is that the company will offer an all-you-can-eat data plan, which AT&T stopped doing last year to keep data hogs from straining its network. Verizon currently charges $30 a month for the unlimited plans on other smartphones, with voice and text messages costing extra. That’s $5 more than what AT&T charges its heaviest data users, who can download up to 2 gigabytes of data per month. For those who like to stream The Daily Show with Jon Stewart while in line at Costco (COST), $5 may be a small price to pay.
Quality: It’s hard to know whether AT&T deserves the battering it has received for poor network quality. Each carrier’s coverage differs from area to area. AT&T increased its investment in wireless infrastructure by over $2 billion in 2010, and says it’s improving. As of last August, however, the percentage of dropped calls on AT&T’s network had risen to 5.8 percent, compared with 2 percent for Verizon, according to a survey by Changewave Research. Infonetics Research co-founder Michael Howard says AT&T is more conservative with its network investments and took longer to upgrade from copper wires to fiber-optic cables and other cutting-edge gear. “Verizon planned its network with greater foresight than anyone else,” says Recon Analytics analyst Roger Entner. “They have a very well-built network, and they don’t cut corners.”
Features: The carriers’ iPhones are nearly identical, but where they differ, AT&T has the advantage. Verizon’s network is based on a technology called CDMA, which runs voice and Internet over different tracks. That means Verizon’s iPhone owners won’t be able to surf the Web or use apps while on a call. AT&T users can, and the company says that more of its customers use the simultaneous talk-and-surf capability every day than watch videos or use GPS navigation.
Verizon users can, however, pay extra to transform their iPhone into a Wi-Fi hotspot, and share its cellular signal with up to five other gadgets. AT&T’s iPhones currently link up with only one other gadget, and connect with them via a more limited Blue tooth signal.
Speed: A big part of AT&T’s promotional pushback against Verizon is that its network is faster. Thanks to recent upgrades, AT&T boasts speeds of 6 megabits per second—fast enough to download a song in four or five seconds, and roughly three times what most Verizon subscribers see. Yet that speedy connection is available only in regions where AT&T has finished upgrading the wires that connect cell towers to the Internet, a process that won’t be finished until at least 2013.
Future Proofing: The Verizon iPhone will likely have a short stint in the spotlight. Every year since 2008, Apple has announced a new, upgraded iPhone in early summer. Buying a Verizon iPhone in February likely means missing out on a sleeker version in a few months’ time—although that’s always a worry when buying gadgets.
Both AT&T and Verizon are building next-generation 4G networks with turbo charged speeds. Neither existing iPhone works on them, but analysts expect Apple to introduce a 4G iPhone within a year or so. Verizon is much further along—its 4G service is already available in 38 cities—so its service is a better bet for those hoping to upgrade to 4G speeds as early as possible.
Of course, the iPhone matters not just to Verizon’s customers but also to its investors. No one doubts that winning Apple’s “Jesus phone” will increase Verizon’s subscriber base. UBS Securities (UBS) expects the company to win 3.5 million new customers in 2011, while AT&T, Sprint (S), and T-Mobile will lose around 1 million between them.
Managing that growth won’t be simple. Verizon is expected to pay $5 billion or so to subsidize new iPhone owners this year, which could drag down profit margins. Walter Piecyk, an analyst at brokerage firm BTIG, expects the opposite. He says the iPhone bonanza will allow Verizon to spread fixed costs like stores and TV ads across more units, boosting margins from 46.4 percent last year to 48.1 percent in 2012. If Verizon’s network can handle the new subscribers, he says, it will further damage AT&T’s brand. “They’ve had the iPhone for four years, and they’re still trying to catch up with demand.”
The bottom line: AT&T must now compete with Verizon for iPhone customers. The latter offers a more reliable but slower network.
Burrows is a senior writer for Bloomberg Businessweek, based in San Francisco.
January 5, 2011
For immediate release:
LOUISVILLE — ValuLink Technology Solutions, a broker of voice and data telecommunications services for businesses worldwide and the parent of industry leading website www.t1town.com, has reached agreement to represent regional data services provider US Signal.
Headquartered in Grand Rapids, MI, US Signal’s network includes more than 7,000 route miles of long-haul fiber and more than 900 miles of fiber optic metro rings in 22 markets connecting regions in Michigan, Ohio, Indiana, Illinois, Wisconsin and Missouri. The US Signal network provides on-off ramps comprised of major carrier hotel locations, incumbent telephone company central offices and other lit buildings.
“US Signal is a nice fit,” says ValuLink CEO Clem Wyman. “We do a lot of business with customers who have locations in the Dayton, Columbus, and greater Chicagoland markets, all of which are sweet spots for US Signal. Their peering arrangements are such that with the right mix of in-footprint locations, US Signal can provide totally secure MPLS networks to customers with locations in their region and pretty much anywhere in the country, as well.” Wyman said US Signal has “a quality network, excellent customer service and, is priced to win. They also have a deep commitment to their agent channel.”
Wyman is a widely recognized telecommunications expert who is often asked to speak to customer and industry groups on topics such as VoIP, SIP trunks, and Unified Communications.
With the addition of US Signal, ValuLink, which has offices in Louisville, KY, and Greenville, SC, now has over 50 service providers it can quote for customers, depending on where they are located. Via T1 Town, ValuLink also is able to deliver other business value-add services ranging from Merchant Services accounts, to full, variable-expense cost containment evaluation services, to mobile marketing services such as Short Codes, among others.