VZ Screwing its FiOS Customers

The Tampa Trib has an article about all the billing and customer care issues customers are having with VZ FiOS (their fiber-to-the-home triple play service). It makes no sense to me because the billing and OSS platforms aren't new. It's just VZ's sweet way of welcoming you to the fold. Bright House (and other cable companies) should be laughing.

Where Have I Been Hiding

I've been pretty quiet lately. I spent a week in Vegas at the telecom agent conference at the RIO. Then I came back to find I had landed a consulting gig in Chicago. I attended VoiceCon in Orlando as well as a FISPA event in Orlando before packing up for the weekly commute to Chicago.

Vegas was busy. With telecom being broken (here and here), agents are scrambling to adjust their business model. Carriers want agents to sell more, but the cost of customer acquisition (in my experience) is going up, as commissions decrease. Also, because many carriers are an non-integrated mess, placing orders is a maze of guessing. AT&T (including BellSouth, SBC, and the old IXC, AT&T), VZ (including MCI, UUNET, and VZB), Paetec (USLEC and McLeod), Level3 (and all its subsidiaries), Sprint, Embarq -- it's just too difficult.

On my end, its looking like I quote about 10 circuits to land one, then get one disconnect to go with it. Net nothing.

So along comes a project to migrate a data center and circuits for a Fortune 500 company. Big money. 40 hours a week in Chicago. I had to take it. So where does that leave everything else?

Well, I still get email 2 or 3 times per day. I do not have access to the web during the day. (It is locked down). I just get email access on my laptop. So email away. My response time will be a little slower. (It may take 24 to 30 hours for me to get back to you, but I WILL get back to you). As long as I schedule calls, I can still talk to folks. (But most calls will be returned after 5 PM Central time or at lunch. Thanks for understanding. See you at ISPCON in Chicago on May 13-15. (I am speaking and will be there).

Music Industry Wants ISP Tax

The music industry is looking to make ISP's filter P2P and charge a piracy tax to its users. DSL Reports has the story and here and here. I know ISP owners have their head down (and in some cases in the sand ;), but there are battles going on that need your attention. The Comcast BitTorrent fight is just one of them. This led to a truce but only after the FCC releases an Notice of Comments on Network Management. This is not a good thing. You do NOT want the FCC - with 10 lawyers per Engineer - explaining how to manage a network. Now comes the Music Industry, P2P filters (which sound like a violation of the FCC Network Management plan) and a user tax. WISPA is one org having the discussion about network management, P2P throttling, and the like, because P2MP wi-fi systems can't handle people streaming movies all night well.

What Goes Into the Price of VOIP

This is reprinted with permission from the author, Russ Warner of Alianza. This was a nice piece of writing about VoIP that I wanted to share. It was in response to a WISP asking about $13 consumer VoIP white label service. During the discussion, I responded with the financial numbers for both Vonage and 8x8 (Packet8).

A VoIP provider generally has four costs to consider when establishing a price for its VoIP offering. The ongoing costs are:

1. Use of Technology (to provide services),
2. DID (phone number),
3. Minutes (termination), and
4. E911.

Minutes are the only variable cost in this equation. The other three are typically fixed costs (Technology Platform, DID, and E911).

E911 can generally be charged below-the-line and pass-through (like a tax); that way, E911 doesn't have to be considered in the published price (or toward determining your margin).

If you (WISP) offer unlimited calls to the residential customer, either you (WISP) or your White Label Provider is paying a variable cost each month for call termination that is dependent on the end customers' usage. White Label VoIP providers generally have a cost for outbound calls, while providing inbound and on-net calls for free. That's a question to ask.

When pricing is established, you (or the White Label Provider) have to take into account the usage and costs for your customer base and make an estimate (averaging) on your resulting cost. FCC data for 2003 estimates that Local (Intrastate) vs. Long Distance (Interstate) calls are roughly a 49/48 split (with 3% as toll-free or other).

I mention this because termination rates for Intrastate are generally higher (today) than for Interstate. This could change in the future. For the sake of cost calculation, I'll use a 50/50 weighted average cost for terminating calls.

Other market data suggests that the average residential customer makes approximately 300 minutes of outbound calls per month. Thus, the "variable" cost for minutes (call termination) is as follows:

• 300 - minute average outbound, off-net calls per month
• x $0.02 - sample rate per minute (combined Interstate/Intrastate rate)
• $6.00 - for minutes (call termination) / user / month

When you add $6 average variable cost for minutes to the price of the Technology + DID, you'll have your basic VoIP cost. Remember that minutes will fluctuate every month. Some months will be better than others. Either you (WISP) or your White Label Provider will be paying that cost.

Some VoIP providers offer a "metered" plan. The user essentially pays for their services and DID with a fixed monthly charge, but the user is on a pay-as-you-go pricing model for calls.

RATE CENTERS

When you establish a price for your VoIP offering, you can consider the following. There are many non-U.S. rate centers that are lower or similar to the U.S. in price. You could include calling areas in an "unlimited calling plan" without affecting the rate. Some examples of cities with rate centers with lower/equal rates are: Moscow, London, Singapore, Paris, Madrid, Frankfurt, Rome; countries: Australia, China, Brazil, Ireland, Denmark, and many more.

So you could offer a calling plan to your customer, for example, at $29.99/month, with unlimited calls to the U.S., Canada, plus UK, Italy, Spain, or others, without really affecting the internal cost.

BUSINESS VOIP

Business VoIP customers wanting PBX functionality can be charged a premium for those value-added services. Many providers charge a fixed rate per line per month as well.

On the low-end of the scale, one competitor/VoIP provider that sells direct to the end user has prices starting at $39 for PBX functionality and unlimited calls to US/Canada/similar rate centers. They have an activation fee of $39.99. If you sign a two-year contract and want a free phone, it's $59.99/month and unlimited calls, plus a $39.99 activation fee and $100 early cancellation fee.

Again, the variable cost is minutes (termination).

GOING RATE

I have done some limited research on Comcast, Time Warner Cable, Cox Communications and Vonage. These are the top 4 digital voice providers in the U.S. (Total of 12 million subscribers.)

Of these four, three are double or triple-players (i.e., offer broadband and TV and/or VoIP). Vonage is the only single player (VoIP only). The cable companies have a new customer acquisition cost about 10x less than Vonage, because they sell VoIP to their current cable/broadband subscribers. There are economies of scale for you as WISPs selling a new service to your current customers.

SINGLE PLAY

Many single-play VoIP providers such as Vonage offer a $24.99/month residential package that includes basic services, a phone number and unlimited calling minutes (US/Canada and some other countries). This implies inbound and outbound calls are included. E911 is available.

Many of them have one-time activation fees and cancellation fees (see below). In lieu of a contract, some require a service termination fee (see below). All offer a 30-day money-back guarantee.

Examples:

• Vonage is $24.99 for unlimited and $14.99 for 500 minutes ($29 activation; $39 cancellation)
• Qwest is $29.99/month for residential VoIP.
• AT&T Call Vantage is $24.99/month for unlimited ($29 activation; no cancellation)
• Voip.com is $21.95 for unlimited. ($29 activation; $39 cancellation)
• Verizon $24.95 for unlimited and $19.95 for 500 minutes ($0 activation online; $39 cancellation)
• Packet8 is $24.99 for unlimited ($29 activation; $59 cancellation)

DOUBLE/TRIPLE PLAY

The three double/triple-play providers mentioned (Comcast, Time Warner Cable and Cox). Comcast has a $39.95 residential package that includes basic telephony services, a phone number and unlimited calling minutes (US/Canada); first 6-months, you pay $29.99. Time Warner Cable is $49.99 and Cox Communications is $49.95/month. In all cases, E911 is available. None of them have activation fees. Time Warner and Comcast have a termination fee. All offer a 30-day money-back guarantee.

Comcast and Time Warner Cable offer package of voice, data, and cable TV for $99/month. After the first year, Comcast's regular prices apply.

If you already have Time Warner cable or bb services, VoIP is $29.95. [the end]

It is a great look at the US nationwide pricing in 1Q08.

I still have an agent agreement with MyPhoneCompany.com who sells at about the same rate as Vonage, but do not have the overhead or the advertising expense.

Also, there is a whole chapter in my book, SELLECOM, about VOIP.

Broadband Surveys

On the one hand: New survey finds gaps in U.S. broadband. Also, the GAO doesn't like the way the FCC collects data. Some poeple debate if 200k one-way is truly broadband.

On the other hand, the FCC will now collect more information on its twice per year form (477). Which means more work for the over-taxed ISP.

Exclusive Property Access Regulation

The FCC has released its Report & Order concerning exclusivity in MDU property access. In other words, MDU (apartments and condos) owners and managers cannot make exclusive deals with carriers for access into the dwellings. Previously, cable companies had exclusive deals as the sole provider, but of course rules that exclude the ILEC are unfair. (Rules that give ILEC's exclusive are fair). So they complained to the ILEC loving Commish and got the ruling in October.

BroadbandReports has an article on it.

Promotion of Competitive Networks in Local Telecommunications Markets, First Report and Order and Further Notice of Proposed Rulemaking, WT Docket No. 99-217, 15 FCC Rcd 22983 (2000)

James Moskowitz of Fleischman and Harding, a leading telecommunications lawyer, offers some insight into the ruling at Broadband Properties magazine.

TRS and E-911

The FCC released the report & order for Telecom Relay Services for the Disabled as well as the E-911 Requirements for IP-enabled Sp's. (Dkt # 03-123, 05-196)

The Ostrich Situation

Brock Henderson wrote an article for ISP-Planet titled The Ostrich Situation that sparked some debate on ISP-Marketing.

Brock did preface the article by saying it happens to many business owners, not just ISP's. But I think that the nature of this Industry, built by techies in the days of dial-up and BBS, make the transition hard. Many of my clients just cannot leave the access alone, even when it is losing money.

The money is really in what people do with the access. Like VoIP, back-up, security. If there is one lesson from VoiceCon, it is that the money is in Managed Services. Data and storage are running amuck. Rules demand that all email be archived. That's HUGE! That's opportunity. Partner with a back-up company like DPS and just collect the fees.

The other part of the discussion on the list was about attending trade shows. A few people think there is no value to ISPCON. I take offense to that because I know that get value from it. If you sit in on one of my sessions or attend the CEO Exchange, you WILL get your money's worth.

You can't learn anything new sitting in your office talking to the same 10 people every day. (At least, I can't).

And the discussion brought a response from the long lost DOUG McDONALD!

Cogent Peering Fight

Alex at ISP-Planet and GigaOm are reporting that Cogent is in a peering fight with Telia. It's funny, because Cogent is no longer the cheapest provider. I think that award goes to HE.net now. (Wonder when they start having peering battles).

UPDATE: a full story on WRAL.

No Surprises as 700 Auction Ends

After closing the 700 MHz auction with almost $20B -- 80% coming from VZW and its evil twin. [wsj] It seems that many are surprised that Google didn't win. Of course they did. Google bid enough to get it to the open handset price then laughed all the way to the bank. Google's last bid was probably $1 shy of the $4.6B mark. The one surprise:

"One new entrant, Frontier Wireless LLC, owned by direct broadcast satellite (DBS) television company EchoStar Corp., won nearly enough licenses to create a nationwide footprint. Frontier bid $712 million, according to FCC data. [source and more here]

That's most of the available spectrum, now in the hands of the 2 largest cellcos. Go figure.

VoIP Costs

On an ISP listserv we have been discussing the viability of a $12.99 white label consumer VoIP service.

From what I have seen using all VoIP and no PRI, you are looking at $8 per user for DID and O/T for a consumer using about 300 total minutes per month. Vonage's numbers back that up: Average monthly direct cost of telephony services per line $7.11. Remember, that is the basic cost of telecom service, which does not include hardware lease, collocation, bandwidth, labor, admin expenses. USF, 911, and TRA fees are extra.

Using TDM for local, that cost increases to about $14 depending on what the PRI costs.(PRI runs $500 divided by 23 lines divided by 4:1).

Vonage's Average monthly telephony services revenue per line is $27.42 --- and they lose money. So how could it white label for $12.99?

Another cost is the "marketing cost of acquiring one new subscriber line was $223, down from $306 a year ago". [source] I think the acquisition cost is closer to $300. In addition, there is an ATA and shipping (about $25 and $8).

The other metric that is costly is churn. Vonage is at 3%.

Packet8's "Average monthly churn for all services for the quarter approximated 3.8%, excluding subscribers that cancelled within the first 30 days of service. This is a reduction from the 3.9% and 4.6% churn we experienced in the September and June quarters." [source]

8x8 does not really break down the consumer numbers. But they do focus on the Business Customer numbers.

8x8 has product margins of 15% -- which is about the same as CLEC resale POTS lines. And those guys are not profitable either.

"Revenues from our Packet8 Virtual Office business services contributed to 48% of our total revenues." Packet8 has many more consumer lines than business lines.

• Business customer ARPU was $239.
• The cost to acquire a new business customer increased to $1,168.
• "Cost of sales, which includes all network expenses, headcount to manage our network, depreciation on our networking equipment and stock compensation for the employees who manage our network, was $40 per business customer per month."
• "In the December quarter, customer service and billing expenses were approximately $46 per company per month.

Business VoIP is profitable, but I do not believe there is any viable way to offer VoIP for $12.99 in my opinion.

Remember that Vonage has 2.5M subs, so their costs are spread out. They had investor money and IPO money to pay for equipment and network build out. And none of the numbers reflect the patent penalties. Does the white label company own any patents? Or will they be subject to litigation like Vonage and the MSO's?

Check carefully any VoIP Provider that you choose. There only so much info you can get - and finding out if they are viable or smoke-n-mirrors is very challenging. Yet, the cheapest provider is likely not the most viable.

Debt Rumors

While the credit crunch tightens companies looking to re-finance debt like Vonage, XO, and L3, will find it difficult and expensive. Here's the rumors:

1. Vonage is looking to re-fi $253M in debt due in Dec. No one wants it. Heck, if Bear Stearns went for $2 per share, can you imagine what else lurks behind the curtains of the other Wizards on Wall Street? Who has the cash to risk on Vonage, who just started up the TV ad machine again?!
2. XO's minority investors want the debt refinanced so their is less interest being paid to Icahn. Also, XO has a build out strategy (just launched Charlotte) that requires cash. Each lateral build off of the fiber run costs between $7,000 and $28,000.
3. The company refinanced $2.5 billion in debt last year and carries a total of $6.9 billion in debt. That's a heavy load considering the company has only $723 million in cash on its books. [cnnmoney]

At least he's holding the book!

Ideas

One thing that you have heard me say is that Ideas by themselves are no big deal. Heck, I write about ideas every day. My book contains over 100 ideas. We spoke about 50 Ideas in 50 Minutes - twice.

It's not the ideas. It's what you DO with the Ideas. It's all about Action. Execution. Implementation.

Ask the telcos who are losing money because their Integrations were poorly executed. Look at your own company. How many new ideas have you Implemented in your business in the last 90 days?

EMC Buying Iomega?

EMC Corp made a $205M offer for Iomega, according to news sources. Iomega was famouse for the Zip drive. Not much since then. Iomega did try to make inroads in the managed security services business with OfficeScreen. Iomega signed up telecom company Masergy [pr].

No Privacy Anymore

According to this article, the list of folks listening to your VoIP calls, reading your email, tracking your location, tailing your web usage, tapping your cell and landline calls, and other nefarious acts is long. It includes Ma Ball, VZW, law enforcement (LEA), governments around the globe, your boss, and criminals (which covers just about everyone :)

Wikileaks Publishes FBI VoIP Surveillance Docs

from slashdot:

"The folks on wikileaks have published a new interesting and shocking report: FBI Electronic Surveillance Needs for Carrier-Grade Voice over Packet (CGVoP) Service. The 88 paged document, which is part of the CALEA Implementation Plan was published in January 2003 and describes in detail all needs for surveillance of phone calls made via data services like the internet. Wikileaks has not published any analysis yet, so maybe some of the techies hanging around this end of the internet are interested in taking that one on."

A Guide to CALEA

What you need to know about the government's ability to listen to your phone calls. All here.

WISPA will be releasing a CALEA standard at ISPCON.

SAAS

Out in Vegas for the telecom agent show, VOIP and SAAS. For VoIP, it is now about SIP Trunking now. (The PRI replacement).

As always Unified Messaging is also a driving force for VoIP and SAAS. Now that IBM is going to drop $1B on UM, look out. That's all the Big Boys in that sandbox: Microsoft, Cisco, and IBM.

For SAAS, it is about getting started. Now. Hostopia, Salesforce.com, Google Sites, Verizon, Yahoo/Zimbra, HyperOffice, ZOHO, and nGENX are all in the space. Many are looking for partners to sell their services to end users. In fact, SAAS is alot like VOIP -- expensive to market to the end user. Bundling is the answer :)

I've mentioned this before, cable companies are offering Hosted Microsoft Exchange or some other hosted email package.

ISP's used to be ahead of the curve. I see some who still have issues with email who won't just outsource it. I see many that don't want to partner up to add streams of revenue. Don't be hampered by teh control issue or the Analysis Paralysis. Just do it!

March 18 at 3 PM eastern time, find out what SAAS and how to make money at it. Email me to register for the webinar.

SAAS is reaching verticals, like Real Estate. HyperOffice just closed a deal with Weichert Realtors.

Vendors I Have Talked to

Wayport about broadband roaming for your business traveling clients.

TW Cable, Comcast and Charter about reselling their fiber and/or broadband. )I forgot to mention Bright House, too.

Hughes Net for wholesale satellite broadband. Wild Blue depends too much on its distributors (and is happy to have AT&T selling the heck out of it for them). But HughesNet seems simpler to deal with.

If any of these vendors interest you, please contact me about joining the program.

L3 Execs Changes

Level(3)'s COO, Kevin O'Hara resigned (fired?) due to some huge systemic problems at L3. O'Hara was a founder and was with the company for 10 years -- a heck of a long time in telecom. The integration (and what Andy calls Analysis Paralysis internally) has resulted in a slowdown of revenue and frustration from partners and customers alike.

While the company is aware of these problems, it has been unable to fix them in a time frame that would have allowed them to take advantage of the opportunity presented by the Mega-Mergers. (XO and GX weren't able to take much advantage either due to their own bureaucracy.)

L3's CFO Patel resigned in October, but is now staying. I guess he is closer to the crown now. Neil Hobbs, the EVP of sales and network services,is now the new EVP of operations. CEO Crowe will assume the title of president. (Big mistake. Crowe is the "visionary" -- what L3 needs is a B2B Practitioner.

GigaOm is speculating about a massive layoff coming.

Ike Elliott wrote a thank you to O'Hara.

Jaws of Success

The Keynote for the Phone+ Channel Partners Expo in Vegas was Ron Jaworski, an NFL quarterback, Super Bowl winner, TV commentator, and business man. (He owns gold courses, hotels and restaurants -- oh, and the Arena Football team, Philadelphia Soul, with Jon Bon Jovi). Jaws is an energetic speaker, especially when reliving NFL moments. He ended with his 7 Jaw Bites:

1. You must like People
2. Set the Example
3. Create an atmosphere where people will enjoy working together (teamwork)
4. Define, Delegate, then Lead
5. Bring Energy, Enthusiasm, Passion to what you do
6. Build Relationships
7. Be Sincere

XO and the FCC at the Expo

I'm attending the Phone+ Channel Partners Expo (for telecom agents). Yesterday, one keynote was from CEO of XO, Carl Grivner. His main points centered on his belief that things are going to get better in telecom. Demand is up and will increase. (He did not say Exaflood thankfully). Video is the driving force. YouTube spends $1M per month on bandwidth now as people download 100M videos per day. That is 6 Petabytes of data. Then there is Apple also pushing music and video. (And don't forget Netflix)

Grivner thinks that it is possible Google will offer Voice for Free. "They just have a different business model than telecom."

His 2 keys to success were Customer Service and Passion & Energy. I think it is difficult to offer great customer care without having enthusiasm (energy and passion). It has to be top down, too.

Grivner thinks that consolidation will slow down now (lack of available credit).

Grivner also thinks that the FCC will be "stable" the rest of the year. He does note that the issues of copper replacement and forbearance do not bode well for CLEC's. And CLEC's should plan for that inevitability. (In other words, he sees UNE's going away in the next 2 years).

Next, Nancy Lubamersky of TelePacific spooke about the Regulatory landscape. Any talk about Regulation empties a room whether it is ISPCON or Channel Partners. I don't understand it. Regulations affect telecom more than competition. Nancy did note that the FCC has 10 times more lawyers than Engineers. She also notes that Uncertainty is Not Good for the market - it's too hard to raise capital to build out network.

New Edge Finds its Voice

From Phone+ and the Channel Partner Expo:

Hosted IP communications provider Intelliverse and New Edge Networks have partnered to provide an integrated voice and data product that runs exclusively over a secure, private MPLS network.
The partnership establishes a direct connection between Intelliverse and New Edge, allowing users to bypass the public Internet and access secured VoIP directly though Intelliverse.
Now, the security and reliability that New Edge has built in its private networks for data extends to all voice traffic to and from Intelliverse, guaranteeing quality or private ultimate security of transmissions, according to the companies.
The product is available through Intelliverse’s callEverywhere Business voice service and New Edge’s national MPLS network.

I expect to see one or two more VoIP providers look to New Edge for transport. In addition, with all the cable companies at this show - Charter, Comcast and TW Cable - there may be opportunity there for Hosted PBX companies to get some transport. Need an introduction? Give me a shout at 813.963.5884.

Sales is Persuasion

Sales is Persuasion. At its core. On the ISP-DSL.com listserv, everyone jumped on Billy White for using the list to market his refurbished DSL modems. Now while his approach may be not everyone's favorite, he was doing what salespeople should do: approach qualified prospects.

On every ISP list, salespeople are labeled and treated like a quote machine. Turn that around: is that how you want your sales team treated? Oh, wait, you probably don't have a sales team or you have such a sales superstar that she would never make a blunder when approaching a prospect.

Seth Godin has a post called How do I Persuade you? I took it as an examination of how much even the sales process has changed recently. Everyone is so busy. No one wants to talk to salespeople. How do you sell stuff then? Take a look and let me know your thoughts.

WiMax Hype

Gary Kim has a post about the limitations of WiMax. As I am fond of saying: Physics is still physics. You can only get so much MB per MHz. Period.

For all those who think Wireless is going to be transport for IPTV, I say HA! Aloha Networks sold off its 700 MHz spectrum after its TV over 700 trials failed. WISPs are already seeing that streaming video can clog a network - fast. Now there's some proof.

For those of you convinced that WiMAX is going to be a great platform to compete with cable modem and Digital Subscriber Line services, you might want to take another look. ABI Research Senior analyst Ken Hyers says recent conversations with major wireless carriers confirmed that "the presence of as few as five users simultaneously receiving unicast content from a single cellular base station carrier band can seriously degrade data access for those subscribers."

While everyone says WiMax will have more bandwidth (how?), it now has been shown to have interference issues within the C-band with satellite. [see SUIRG report]

More Trouble for Sprint

Telecomweb is reporting that Embarq made note in its FCC filing that it is experiencing a dilution via its MVNO arrangement.

""Our wireless service has been and continues to be dilutive to our results of operations," Embarq wrote, regarding its money-losing MVNO deal with Sprint. Just how much it is losing was not made clear, but Embarq doesn't plan to let the situation continue."

So what does Sprint do if both Embarq (its former wireline division) and Qwest both jump ship?? On the other hand, do you think that VZW will be any better a Partner for Qwest or Embarq? Ha! Ha! ROTFL.

Sprint now has to leverage its networks: iDEN, fiber optic, and internet backbone. It can't rely just on the MSO business. And with Clearwire's finances, who will build out WiMax / XOHM?

UPDATE: Gary Kim says Sprint may spin off Nextel.

MS Hosting Its Own

I know I tackled some of this earlier here (and at TMCnet), but it needed more treatment.

Microsoft has announced that it will be offering Hosted Office, Exchange and Sharepoint (called Live Office Workspace). Obviously, this is a move to counter Google, which just released Google Sites, a collaboration app to complement Google Apps. How will Microsoft Partners react to MS selling Hosted Exchange, something of a revenue generator for a few like Intermedia.net, GroupSpark, and Azaleos.

Microsoft also will be rolling out hosted Office Communications Server itself. I guess, they think its too big of a deal to leave to partners. Or maybe it will be a big roll-out integrated with Nortel.

Does MS just want partners selling licenses? It may seem so. VARs are now competing against a hosted suite of services from their Vendor, while also being challenged from communications providers like MSO's (see post here). Now Microsoft has officially become an ILEC - a monopoly that treats its channel as a "partner".

Want a good comparison of MS Workspace versus Google Sites? Read Sarah's post.

BarCamp Orlando

What is a BarCamp? It isn't an UN-conference. It's a place to be a participant. Present, Attend, Inquire, Question.

Here's a video to describe what BarCamp Orlando on April 5 & 6 will be like:

View Video on Vimeo.

I missed the BarCamp Miami and BarCamp New Orleans. But there are more happening (and NOLA is having another one soon, backed by Chris Schultz of Voodoo Ventures.

ISPCON in Chicago on May 13-15 is not an UN-conference, it is THE conference for service providers. Join the Crowdvine network of attendees.

Clearwire's Numbers

Clearwire is still talking to Sprint on rolling out WiMax. But it isn't looking pretty from where I sit as both companies are hitting a wall. Sprint is about to announce another abysmal quarter with subscriber losses. And here are Clearwire's numbers:

• annual revenue is $45.4 million
• net subscriber add of 47,000 for 4Q, total subscriber base is 394,000
• ARPU is $36.09!!!
• churn rate increased to 2.4 percent!!!
• the carrier is in "cash conservation mode." [fierce]

The churn and th e$36 ARPU are the painful points. Supposedly, Clearwire pays $180 spiff to resellers. I don't know if $180 is their total cost of customer acquisition, but even at $200 per user that's 6 months of revenue to just pay for adding the customer. (CPE, install, tower rent, AP lease, and bandwidth would be extra of course).

The numbers don't add up for me: $36 x 12 x 394,000 = $170M Not $45M. Even if you take away the 47k new subs: $36 x 12 x 347,000 = $149M. I'm not seeing that revenue any where. $45.4M divided by 12 months divided by $36 is 105,000 paying subs. The numbers don't add up.

To compound the problem, it seems like the Broadband adoption engine is slowing down (having peaked in 2006 with 10.4M adds). There are about 121 million households and about half have broadband. (About 25-30% do not have a computer). When this happens sales costs increase, because advertising and customer acquisition costs increase.

MS Chasing Google

Microsoft has Office. Google has Apps.

Microsoft has Hotmail. Google has Gmail.

Microsoft has an OS. Google has the web and Android and OpenSocial.

MS has MSDN. Google has Gears, Analytics, and Labs.

MS has Search (kinda). So it bid on Yahoo. Google has all kinda search - mobile, special, specific, and best of all: great results.

Now MS has launched hosted SharePoint and Exchange. In 2H08, any size business can rent these apps as SAAS from Microsoft. [yahoo news] Here's where they start biting the VAR Channel's hand. VAR's are the reason MS has so much penetration in the business space. VAR's keep the licensing flowing. Now with that moving to Hosted, how with VAR's react?

Microsoft "will also begin to offer a free download of a software called Search Server 2008 Express that allows companies to search files and documents inside their network. The product will rival Google Inc's Search Appliance." Yeah, but it will still be MSN Search which sucks. Even when you add in Yahoo (2 cluttered home pages), you don't get the results you do from Google searches. (Or at least I don't).

XO Finances

This article on seeking alpha describes the shareholder feud taking place at XO Holdings as interest on debt mounts; shares dilute; and cash burns.

"With $1.41 billion annual revenue and Carl Icahn – the billionaire investor and self-claimed crusader for shareholder activism and good corporate governance - as its majority shareholder (60% common and 90% of debts) and the Chairman of Board, this company and its stock has been operating obscurely in the bulletin board for years." "According to its 10-K, XO Communications, the business before bankruptcy, accumulated $2.89 billion in Net Operating Losses since its establishment eight years ago."

Wired.com tests VoIP

Wired.com tested VoIP services from 8x8, Gizmo, VZ VoiceWing, Lingo, AT&T CallVantage, Skype, Vonage, and Comcast. Lingo won.

T-Mobile VoIP

T-Mobile is looking at getting into the VoIP business. I guess they want to hasten the telco demise.

T-Mobile this morning started a VoIP service test trial in Dallas and Seattle, promising its cellular subscribers VoIP landline service for only $10 per month. T-Mobile's pricing for what it has dubbed "Talk Forever Home Phone," to which users need add only $50 for a VoIP router is, in a word: Disruptive. The $10 covers unlimited local and long distance within the United States. .... The HotSpot@Home service requires use of a dual-mode WiFi/GSM phone, whereas the new service uses existing home phones. [telecomweb]

Fierce VoIP has a review.

Helio lost $500M

Helio has 180,000 subscribers now. Here's what Alley Insider has to say about Helio numbers:

Last year, Helio booked $171M in revenue: $115M came from selling cellphone service and another $56 million from selling phones and accessories. Cost of sales: $168 million, including $71 million on wholesale airtime and $97 million on equipment. This leaves them $3 million -- a 2% margin. But then there's another $332 million (!) of operating expenses -- including $160 million spent on sales and marketing, $99 million spent on operations and member service, and $66 million spent on general and administrative costs. Net loss: $327 million.

ELN, in its SEC filing, had a couple of interesting things to say:

1. EarthLink admits in the SEC filing it "may not realize the benefits we sought from our investment in the Helio joint venture."
2. The filing goes on to note that ELN dumped in $210M, which it will probably not recoup;
3. Helio will continue to lose money;
4. "There can be no assurance that these initiatives will be commercially successful." [fierce]

Weekly round up

I was at FOWA, so I missed some stuff. (You can read my thoughts on FOWA at TMC). Here's the tidbits that have been going on:

• Embarq names Gerke as permanent CEO
• Houston looking for a provider to replace EarthLink.
• Level3 gets access to IBM's "42,000 pending and issued patents which cover a broad range of telecommunications services and technologies". [whir]
• We keep all of our options open even though it costs us productivity, because of the pain of watching a door close. [nytimes]
• Sprint writes off most of Nextel. When will XOHM launch??? Or has Sprint given up on WiMax?

WISPA ISPCON Crowdvine

WISPA will have a session track at ISPCON in Chicago on May 13-15, 2008. I am experimenting with Crowdvine, a social networking platform. It was used for FOWA in Miami last week - and it was great. You were able to see who was attending and ping them to meet up. Plus you could recognize faces and know they were at the conference. It seemed to cool to me. So I am doing a limited test now. Ping me if you want an invite.