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Today we emailed our first issue of CommsDay AseanHK to our reader lists. If you'd like to see a sample issue please email Laraine Davis at laraine@commsday.com.au

Broadband saves the US telecom equipment sector, says Business 2.0

2006-02-07T17:40:00.000+11:00

Business 2.0: Broadband boosts Cisco, rivals - Feb. 6, 2006

Wireless cashcow continues...

2006-02-07T16:15:00.000+11:00

Bush administration sees $25 bln in wireless sales: Financial News - Yahoo! Finance

Is AOL7 the ghost at the feast by Richard Chirgwin (Comms Day 6 February)

2006-02-06T15:32:00.000+11:00

When the Telstra share price took a journey over the $4 mark last week, it did so on the back of a rumour that T3 would include a rights issue to existing shareholders. If the rumour was true – we won’t know that for quite some time – then institutions would need to go shopping ahead of the issue or be left out. So the rumour was enough to sucker some of the institutional buyers into placing orders for Telstra shares, and the price went up.

So: a rumour emerges, a share price rises, and the ASX investigates? Not at the time of writing, which merely demonstrates that the stock exchange is suffering one of those fits of narcolepsy which seem to overtake it every half-hour or so. Nor was there any visible scepticism among the press about the story itself or the subsequent share price rise.

But we seem to fall into fits of short-media-memory syndrome with depressing regularity. Another story to get some airtime last week was the launch of Yahoo!7, which is going to be Australia’s great media portal of the future.

Australia’s TV stations have a mixed history in the Internet which runs the gamut from embarrassing failure to utter catastrophe (Ninemsn might carry a TV station’s brand, but its success rests on its Internet content).

Somehow the excitement of the introductory video was too much, and the story was given the same depth of sceptical analysis that you might see offering motoring journalists a test-drive of the next McLaren street sports car. Wasn’t it Channel 7 that spent a few years pumping the notion of an Internet joint venture with someone from America? AOL? Hell, the URL (www.aol7.com.au) still functions, even though it gets an immediate redirect to Primus, which two years back relieved the TV station of a millstone around its neck.

AGAIN: And here we are again: big media and the Internet, marriage made in heaven, portal plus TV content plus advertising equals big dollars, right? Not on your nelly.

The TV industry, as I have remarked in the past, has never accustomed itself to changing consumer behaviour, a general erosion of leisure time, and the long slow death of novelty on the TV.

People don’t watch TV the way they used to – which of course is why ventures like AOL7, sorry, Yahoo!7 look so irresistible to the TV stations casting around for a new business model.

But a portal isn’t so new a business model, and although Yahoo! is a successful portal, the fact is that the main reason to go to a portal is that it lets you end up somewhere else.

Google’s name was made as a search engine, but its money comes not from its status as a portal, but because it serves advertisements to other Websites – the destinations people head for after they’ve been to Google.

In terms of income, Yahoo! is bigger than Google, but not that much bigger; one generated $US5 billion in a year, the other raked in $US2 billion. But Google doesn’t need the eyeballs to rake in the dollars; and Yahoo! does.

For all its faults, Google is one of the first companies to learn how to make money out of the natural behaviour of Internet users: since users are heading somewhere else, we’ll make money out of letting them go, instead of spending money trying to persuade them to stay.

TV stations like the portal model because “persuading users to stay” looks like something they understand. Hence the Yahoo!7 venture; which, I’m afraid, suggests that any lessons available from AOL7 have yet to be learned.

Richard Chirgwin

Shallowness reigns over Trujillo's "shortcomings" - from CommsDay 3 February

2006-02-06T14:57:00.000+11:00

It seems the media knives are out for Telstra CEO Sol Trujillo. The Australian Financial Review dedicated a heavily-promoted 5,500 word article last Saturday to Trujillo, depicting him as some form of corporate charlatan dedicated only to enriching himself and getting out of Telstra ASAP.

Extraordinarily, for an article of such length and lead time, there was little new in the piece and very little space given to a “pro” view of Trujillo, other than to those typecast as cronies such as Phil Burgess. Indeed, much of the material regarding Trujillo’s exits from US West and Orange was covered in Australia back in June 2005, including on 10 June in CommsDay by this writer.

Nevertheless, the AFR piece was followed up by Stuart Corner on ITWire this week in what could be best described as a question-without-answer piece. He opined that perhaps there had been shortcomings in the hiring process and also questioned whether Trujillo had the record to be anything more than a vocal opponent of competition regulation. Corner specifically sought evidence that Trujillo had previously “made over” a telco and revamped its customer service and business systems.

Well, Trujillo is powerful enough, resourced enough and articulate enough to defend himself. But one thing which seems pretty clear to me is that people who have suddenly discovered the ability to read online archives of Denver newspapers are also fairly selective in their inquiries and opinions. Far from being a fast company man, Trujillo spent an impressive 28 years working his way up through the ranks of Mountain Bell and then subsequent parent US West to get to the top job. US West did have a reputation for poor connection times and the like – this much is true. But this is almost entirely due to the fact that its 14 state service area comprised 7 of the most 10 sparsely populated states and 5 of the next 10 most sparsely populated states in the United States.

Indeed, US West (before and during Trujillo) was something of a telco pioneer. It was the first US local telco to introduce digital switching and caller ID, the first to offer residential and business ISDN and under Trujillo, the first to offer DSL. It also pioneered “one-number” home phone/mobile/office phone services. Trujillo’s team does have a track record on making over a telco.

Did US West vigorously resist unbundling? Yes it did, both through limiting its interconnect cooperation and direct lobbying. US West was always destined, under any leader, to act this way. As the most marginal and weak of the Bells it had the most to lose from Washington DC-directed competition policy. Regionalism is an important influence on economic actors in the States, just as it is in Australian telecoms!

COMFORTABLE EXIT: The centerpiece of the AFR article is the claim that Trujillo sold out to Qwest comfortable in the expectation of the money available under “change of control” provisions and then bolted as the whole dotcom bubble burst, leaving pensions (based on stock value) in the lurch.

In reality, Trujillo didn’t want to ultimately sell to Qwest, but was pretty much obliged to because they made a hostile takeover offer at a 30% premium to its prevailing stock price. That’s what happens with public companies! It’s worth remembering that Qwest was so valuable and US West so lowly priced by comparison as a result of the market view that the unregulated long distance firms had a brighter future than heavily regulated incumbent telcos! Trujillo left his 28 year association with US West – and millions of dollars in retention payments – precisely because he didn’t like the fast and loose style of the new owners and its chief, Joseph Nacchio.

US West stockholders were burned after the 2000 crash, this is true. As were many with any exposure to IT or telecom stocks at all.

Similar question marks were raised over his short stint at Orange. But as I reported in June, he was specifically brought in as an outsider to broker a peace between a the UK and French factions of that firm. He did so, raised sales, and presided over the absorption of Orange as a business unit of France Telecom. Mission as set was accomplished and although Trujillo’s departure was hasty and opaque, it was by no means an ejection prompted by failure.

PROFIT AND RUN: So will Trujillo and his American associates take the money and run, leaving Telstra in worse shape? Trujillo seems absolutely dedicated to doing things that improve profits – rationalising network platforms to save costs, deepening the capability of CRM systems to boost ARPUs, and, yes, fighting against regulations that are designed to facilitate the firm’s market enemies. It’s this last point that seems to confound his critics. How dare an American criticise Australian majority shareholder-imposed policy settings (unless they are the US Trade Representative)!

But it’s worth remembering that the current Australian regime is pretty much an American import itself, from the 1996 Telecommunications Act. Much of the thinking behind that Act has now been junked, not just because Bells spend lots of money on lobbying Congressional types, but because many of its legal and economic assumptions simply didn’t hold up when exposed to harsh light. This is where Trujillo, admittedly rather patronisingly, makes the claim that he has seen this movie before.

If you are a market combatant against Trujillo, you have every reason not to like his recent actions and perhaps to even scorn his personal history. But despite the best efforts of the commentariat, he is no charlatan – he is the real deal when it comes to international-class telco experience. To infer that he is someone of the ilk of a Bernie Ebbers, a Gary Winnick or a Scott Sullivan is unfair.

It’s worth remembering that some other sullied names from the bubble era – Nortel, Lucent and so on have been rehabilitated. Even the venerable BT have put Matt Bross in charge of their network – Bross is infamous for when, as Williams CTO across the Atlantic, he accepted free stock in tech startups such as Corvis and Sycamore when buying their product. BT no doubt saw the other side of Bross—an early IP visionary who had rare experience in creating cutting-edge next generation nets.

Grahame Lynch was the group editorial director of America’s Network magazine, based in California, between 1999 and 2001 and is author of “Bandwidth Bubble Burst” (2001).

Vote now in our poll on Australian telecom regulation

2006-01-03T17:48:00.000+11:00

Is the Australian telecom sector over-regulated? Click here to record your vote

Predicting the recent past

2005-12-09T21:36:00.000+11:00

By Geoff Long (this appeared in CommsDay on 8 December)

It seems the annual analyst prediction season is getting earlier and earlier: there was a time when they’d all leave it until the New Year, but Gartner’s predictions already appeared in late November, while IDC just pulled its out of the oven with the first batch of fruit mince pies last week.
And like all good predictions, they contain few surprises – growth in traditional wired voice connections will slow in North America, says Gartner. Really. As Ad Nederlof, the former CEO of call centre specialist Genesys, once told me, analysts are very good at predicting what has happened, and if they really did know the future they wouldn’t be working as analysts.
IDC contains more of the same, predicting that the “Google effect” will encourage more companies to adopt disruptive business models faster. These disruptive business models, it says, are IT services and applications delivered online – things like Google, naturally, and the other poster child, Salesforce.com. It’s funny, but I thought we were smack bang in the middle of the web services revolution? Meanwhile, hosted applications was a prediction popular about five years ago but didn’t come, and now it looks like it possibly, maybe will come next year. Or the year after.
To be fair to the analysts (it’s the season of goodwill, after all), they do flesh their predictions out a bit further than the simplified examples I’ve given. That said, those in the industry will be familiar with most of the trends simply because they’re dealing with them daily.
NEW WORDS IN LEXICON: The fact that these things are happening can be evidenced by the new words and brands that have entered the lexicon in the last couple of years – you might want to look some of them up in the wikipedia, the ultimate in “wikis”, if you’re not up-to-date. Of course you know that a wiki is a type of web site that allows any user to add or edit content collaboratively.
Even the word blog just a couple of years ago would have had some people scratching their heads. Or what about Flickr, the web site for sharing digital photos, which incidentally started out as a tool that was created for a massively multiplayer online game – that’s another term that might have been relatively unknown outside of South Korea just a few short years ago.
And chances are you’re one of the 205,618,231 people that had downloaded Skype last time I looked, and you probably get news through an RSS feed or podcast.
The really interesting trend, one which both IDC and Gartner have spoken about in the last couple of months, is the way these consumer technologies are making their way into the corporate network. One example I like is that of Bob Lutz, the septuagenarian vice chairman of General Motors, who was one of the early corporate bloggers. GM is a big fan of blogs and uses this medium to enhance its public relations. It’s since been joined by a long line of “CEO bloggers” and there’s even a blog to keep track of all of the high-profile corporate bloggers (the “BlogWrite for CEOs”).
Another technology making its way into the corporate network is the peer-to-peer (P2P) technology normally associated with illegal music sharing. One of the most popular of the P2P platforms, BitTorrent, is already in use for distributing Linux software and in Groove Networks’ Virtual Office application. Groove has since been acquired by Microsoft and there’s word that its P2P technology will make it into future versions of Windows.
Meanwhile Gartner used its recent annual Symposium/ITxpo to warn businesses that these sorts of technologies will enter the business world whether the IT department likes it or not. Steve Prentice, vice president and chief of research at Gartner, said that the dynamics have changed and enterprises will struggle to dictate how employees and customer use technology.
“As home and office environments continue to merge, the knowledge worker of the future will demand the same level of functionality and flexibility in the workplace that they have got used to at home,” said Prentice. “When those demands are not met by the enterprise, history shows us that they will find the technologies and tools needed themselves in the consumer market.”
Which is as good a reason as any for checking out some of these new technologies now that the year-end slowdown is almost upon us. Stay tuned next week.

Three new speakers at our Summit

2005-11-30T22:22:00.000+11:00

We're adding exciting speakers to our March 22/23 CommsDay/Media Summit each day.

Today we announce:

DR RAY OWEN: Director Networks Asia Pacific Group Motorola, Inc.

PETER WILLIAMS: CEO, Eclipse Group (Deloitte’s digital media division)

DR PAUL BROOKS: Technology Director, Consultel

Download a brochure here

CDMA spat is wholly war, partly truth

2005-11-26T03:36:00.000+11:00

Last week an anonymous caller to our Sydney office, describing herself as a lawyer, protested our use of the term “holy war” to describe the war of words going back and forth between the GSM/WCDMA, CDMA/EVDO and WiMAX camps. Apparently, it’s insensitive given what’s going on in the Middle East. It’s one of many anonymous missives we have received on the subject from senior wireless executives and engineers in the seven days since Telstra announced its globally momentous decision to dump its CDMA network and replace it with a GSM/UMTS network in the 850 MHz band.

Most of those missives haven’t dealt with our apparent lack of sensitivity but more our alleged ignorance of all matters wireless. What’s taken us aback is their own apparent ignorance of their wireless competition.

One correspondent attacked us with an email stating “you guys do not seriously understand about the wireless stuff” – then in follow-up emails, got his megahertz confused with his megachips and denied that there was an official 3GPP standard for TD-CDMA (highly untrue). Another told us there was no such thing as TDD WCDMA – then when offered evidence that there was, told us that it wasn’t a “full mobile broadband” solution – clearly not quite the same thing. And on and on and on. Now I understand why this is called the “holy war”. It has all the characteristics of a conflict fought on blinkers.

None of this would be so important if it wasn’t about a critical $1 billion infrastructure investment that will affect a fair number of people. But it is. So let’s try and get some facts straight.

PRIMER: First a technical primer. What do GSM, GPRS, EDGE, WCDMA and HSDPA have in common? They all use the core GSM mobile application protocol (MAP) which specifies a common network and signaling platform.

The only real differences are in the use of radio interfaces. GSM, GPRS and EDGE use a time division-based radio interface, WCDMA and HSDPA use a code-division based radio interface which is considered superior for capacity.

Complicating matters is the fact that the latter two use some elements of time division in their radios, although a HSUPA upgrade to HSDPA is supposed to eliminate any semblance of circuit-switching in the platform and make it a pure packet interface instead.

Right. How does that make them different to CDMA and EVDO? Well, CDMA/EVDO uses the code-division radio interface, which gives them similar propagation and coverage characteristics to WCDMA and HSDPA.

Thus, Telstra can reasonably make the argument that replacing a CDMA card with a WCDMA card should result in the same coverage – less so when it comes to the HSDPA upgrade as the specifics of that radio interface may cause cell shrinkage.

NO MAP: But the main difference for CDMA is in the absence of a GSM MAP – the underlying IS41 network platform for CDMA is similar to that used for early AMPS and D-AMPS deployments and hence it doesn’t so easily enable roaming and the like. So by operating both a CDMA/EVDO and a GSM/WCDMA platform, Telstra totes up inefficiencies and misses out on the extra revenues that come from use of the one standardised and feature-rich platform. And presumably it can standardise and maximise its handset purchasing as well – on a GSM platform that supports about five times the market heft of CDMA.

Now this is where the technical primer ends and the crystal ball is switched on. Ignore for a moment the noise being generated by Tim Fischer and the other antagonists in this debate. Let’s make the assumption that on the network infrastructure side there is no reason why a WCDMA 850 network can’t at least match or exceed the performance of the CDMA network (which incidentally is currently only configured for high-speed EVDO capabilities in the cities, anyhow).

RARE BEAST: There is still one big problem with WCDMA 850 – it is a rare beast. Telstra has made big play of the fact that the only other network in the world to deploy WCDMA 850 has a whopping 52m customers. That’s right Cingular Wireless, bolstered by its recent buy of AT&T Wireless, is indeed that big. But to suggest that this provides a comfort level for Telstra, as suggested by Ericsson’s CEO to CommsDay yesterday and Telstra in a subsequent statement, may be a touch optimistic.

For a start, Cingular is a good five years behind Telstra in terms of its wireless evolution.

Its primary and highly preliminary WCDMA build out is currently in the 1900 MHz band, with 850 MHz positioned as the potential regional and rural WCDMA network. And Cingular still has nearly 10m customers using the old analogue and TDMA platforms – which it still hasn’t managed to migrate to even basic GSM.

Getting 52m customers onto WCDMA will not be as easy for Cingular as Ericsson and Telstra might think, especially when it needs reserve spectrum for the four separate platforms it currently uses. For example, Cingular is required by the US regulator to offer AMPS services for another two years. But where this is of most concern for Telstra is in handsets and data cards – or lack thereof. Yes, it is true that many GSM and WCDMA chips now have an 850 MHz option. SonyEricsson rather adroitly announced Australian availability of one such handset just the other day.

ONE HANDSET: But there appears to be only one handset on offer in the US according to regional lobby group 3G Americas–the Motorola A845- which supports both an WCDMA 850 and a GSM 1800 option and would be usable in Australia during the 2G phase-out and 3G phase-in.

Telstra’s ideal handset – which would support GSM 900/1800 and WCDMA 850/2100 MHz multi-mode – does not appear to be available anywhere in the world for the moment. Now, of course, this could change very quickly. We promise, say the always reliable and consistent vendors! Trust as you will, but the current situation suggests that Telstra will need a different style of handset to that required by Cingular – and that there is currently very little announced product in the pipeline. Cingular currently offers WCDMA 1900 in six largish US city markets such as Atlanta and Dallas, and has previously announced plans to launch in 15 to 20 more as yet unannounced cities this year – although with just six weeks left it is running out of time.

A report carried by Wireless Week some six months ago suggested that Cingular had signed about 350,000 users to those six city WCDMA nets. Not too bad, although this does constitute just 0.7% of its total base. But a quick look at the hundreds of network expansion press releases this year issued by Cingular suggests that its primary focus is on building out its GSM and EDGE networks.

Which all leads me to conclude one thing. We haven’t heard the final word on Telstra’s cellular network plans. It’s not Cingular that provides Telstra with any kind of comfort level – it will be rumoured but as yet unannounced operators with CDMA850, GSM900/1800 and WCDMA 2100 MHz spectrum that make the same jump as Telstra. I’ve been told by industry insiders to just wait and see – and the announcements will come. I’m waiting and looking!

RATIONALISE? The Telstra strategic launch last week talked of rationalising three network platforms – CDMA, GSM and WCDMA – down to one based on WCDMA. That’s everyone’s aim eventually – just not in two years! There was also a bit of talk about HSDPA – which raised the hackles of the WiMAX mob, who claim it is much over-rated and untested as a broadband platform, particularly in large cell sites. True, as a technology, it’s barely out of trial phase.

But the announcement also talked fleetingly of the more basic GSM upgrade – EDGE – as well. EDGE has the benefit of actually existing in a genuine commercial sense. It supports lots and lots of handsets and cards. I suspect we will be hearing more about EDGE for data and basic WCDMA deployed primarily for its coverage – not its capacity - in the next couple of years than HSDPA.

Don’t be surprised if in practice, Telstra’s cellular revolution is a little less extreme and a little less sudden that the Powerpoint slides suggested. And it may well have more to do with migrating normal urban and regional customers – as opposed to the bushies – on to a platform or platform(s) that will be harder to churn for competitors.

(This article appeared in the November 23 edition of Communications Day Australia - to subscribe contact laraine@commsday.com.au)