Categories
broadband Business UC

USA market for VoIP 3 years ahead of the UK #8×8

Availability of high speed broadband has driven the market for hosted VoIP telephony in the USA which is 3 years ahead of the UK.

Had dinner last week with Huw Rees, VP Business Development of 8×8. If you don’t know them, 8×8 are the largest provider of Over The Top VoIP services in the USA with over half a million subscribers. That’s almost as big as the whole UK market.

What’s more 8×8 are putting on subscribers at a terrific rate – over a thousand new businesses a quarter at approximately 18 seats per business. This is all public domain stuff. 8×8 is a publicly quoted company that turns over around $120m and with a Market Cap of $800m. Overall gross margin is 71% with GM on services up at 80% which is how they can achieve the market valuation.

This business performance is achieved in two ways. Firstly all 8×8’s technology was developed in house. They don’t have large licenses and royalties to fork out. In fact 8×8 owns a  lot of patents. Secondly everything is low touch, automated and web based including the marketing. They do have an inbound sales team because business customers like to talk to a real person before committing to this kind of technology.

The final interesting point to make is that 8×8 saw a trigger point that stimulated business growth and this was the availability of  high speed broadband – better quality and more reliable broadband connectivity. The USA went through this milestone around 3 or maybe four years ago. We are only now seeing it happen with the BT rollout of FTTC.

Since we started to sell FTTC at Timico we have seen it become a lot easier to sell VoIP seats. Reliability of the serviced is much better. VoIP even becomes a lever to sell people FTTC – they call in for one and we sell ’em both.

Our model as a one stop shop is different to that of 8×8 who pass on the connectivity and hosting revenues. The 8×8 success in the USA does bode well for the rest of us over in Blighty.

Categories
Engineer internet ofcom

Ofcom slow news – 98% of tablet owners use them to connect to the internet

August is normally a deadly quiet month. Almost to the extent that it would be very easy to say I might as well take the whole month off. This year seems to be different. We are rushed off our feet. It’s all good stuff. I’m not complaining. Just saying that we are very busy.

August is also normally a very quiet news month. The media resorts to headlines such as “Boy’s ice cream melts before he could finish it” and other riveting slow news day reports. The one bit of news that you could set your watch by every year in August is the Ofcom Communications Market Report. This year it came out when I was on holiday in North Wales and observing radio silence so I’ve only just noticed it. On that basis whatever I might say on the subject has possibly already been said.

Notwithstanding that the Ofcom CMR usually has some nuggets worth looking at. The first that stands out is the headline saying:

Total UK revenues from telecoms, TV, radio, and post fell for the fourth successive year in 2012.  These services generated £59.5bn in revenues during the year, a £0.1bn (0.2%) fall compared to 2011 as a £0.7bn fall in telecoms revenues was offset by increasing TV, radio and post revenues.”

This is interesting because our use of the internet is growing massively. This might lead you to naturally conclude that the revenues for businesses operating in that market are growing. Certainly this is true for Timico.

It is clear though that for the industry as a whole the model is changing. Old fashioned lines of business are changing. ISDN is being replaced by SIP trunks – telephony by VoIP. The cost of minutes has plummeted largely to a fixed monthly fee per subscriber. Broadband prices are also at rock bottom, particularly for consumers. The government is right when it says we have one of the most competitive markets in the world.

This is also true for mobile and whilst people might whinge about mobile prices the mobile operators are struggling with their gross margins. These large telcos are still seen as fat organisations paying fat salaries and there is probably some way to go on the cost cutting side before mobile markets reach the bottom.

Everyone in the game is trying to modernise their business model. The money must still be there. It is just going elsewhere. One clue is in the growth in TV, radio and post revenues. People must be using their internet connection to spend money. In our house we probably watch more TV over the internet that on the actual TV itself. Including the advertising. We also buy a lot more stuff over the internet than we used to, hence the rise in postal revenues. It’s mostly not downloaded. It comes in a van.

As the world moves more “onto the internet” the one thing that is becoming more and more important is the integrity and the quality of the internet connection. This is particularly true for businesses who are increasingly growing to depend on revenues that rely in one way or another on connectivity to make them happen. For example if you own an ecommerce site then every minute of downtime means lost revenues. Similarly in the physical retail world, most payments are processed using broadband connections. Lose the connection and lose the lolly.

However people might be spending their cash this represents a huge opportunity for the telco that can respond to change. They just have to look up and look forward and not dwell on what was.

One final note. Ofcom bless em do have a way of stating the bleedin obvious. They tell us that nearly all (98%) tablet owners say they use their tablets to connect to the internet. One wonders what the other 2% use their tablets for?!

Gotta go. Busy busy busy.

Categories
Business media

The changing entry level job market

My oldest offspring Tom yesterday joined the ranks of the employed. He is working as a traffic announcer on BBC Radio Oxford. It’s what he has wanted to do since he was 15. Not announce the traffic on BBC Oxford. Work in the radio business.

The trigger point came when he went on a school trip to the Lincolnshire Show. The BBC tent had a competition for kids to do a sports commentary. He won. He was hooked. I was in London at the time. He rang me up and told me he was no longer interested in becoming a vet but instead was going to do a degree in media studies and go to work for the BBC. The idea of having a media luvvie as a son took a bit of getting used to although it did have the side benefit in that he lost interest in keeping hamsters, gerbils and rabbits that were a pain to look after.

So since the age of 15 Tom has spent all his waking hours working in radio. He had various shows on Lincoln local community radio station Siren FM and helped out at BBC Radio Lincolnshire where at the age of 18 he broadcast his own 1 hour show on yoof matters in which he interviewed Feargal Sharkey about music piracy.  At Warwick University  all his free time, and there was a lot of it (History & Politics), was spent working on media projects.  Working with uni radio station RaW FM  he won a number of National Student Radio Awards.

Tom has lived and breathed radio for six years and his hard work has now earned him the reward of a first step on the ladder in the real world. I am a proud dad.

Next up. I am on the Industrial Panel of Bangor University School of Engineering.

Categories
Business ofcom Regs

Ofcom International Communications Market Report 2011 – the unscientific analysis

It’s always exciting when Ofcom brings out a new report. No, no I really mean that:) There is so much going on in the communications world and fair play to it Ofcom has the resources to produce some really interesting stats.

This time it’s the International Communications Market Report 2011. I’ve only just noticed that its out so haven’t had time to distill its 363 tightly packed pages into five paragraphs as is my usual wont. Don’t worry – that’ll be something to do another day.

In the interest of taking a break from work before going home I do, however, herewith provide you with a few choice morsels to keep you going until those five paragraphs are crafted.

Categories
Business phones

Nokia knocked off top spot in WE smartphone sales – ducks not lined up – IDC

look out for that cliff edge

In June 2008 I wrote that the writing was on the wall for Nokia. However in August of that year I got myself an E71 and saw that it was good. I note that by June of 2010 I was using a Nokia N97 which at the time I thought was the best phone I had ever had. Although it was targeted at consumers I couldn’t see why business users would not want it.

By November 2010 I had ditched the N97 for a HTC Desire HD. Symbian for Android. Old world for brave new world. Now the HTC is the best phone I ever had – this is a continuing saga.

According to IDC whilst Nokia remains #1 globally for smartphones in Western Europe the Finnish company has slipped into second place behind Samsung.

In a quarter that showed a 76% year on year growth for smartphone shipments Nokia suffered a 10% decline. Samsung grew only 5% and HTC a whopping 271%, admittedly from a much smaller base.

This isn’t really an “I told you so” post and of course it is about operating systems these days not handsets. It is however interesting to be able to read the historical blog posts and be both a spectator and participant in this game.

You would think there have been enough case studies on companies disappearing off the map having been left behind in technological revolutions for modern day participants to see problems coming a long way off. For Nokia the cliff edge is perilously close with only a fence built by Microsoft between them and oblivion (breaking up on the rocks/watery grave etc). Would you bet on the Microsoft fence?

PS the imagination is running riot here with a severe risk of winning an award for most clichés used in a blog post. I could also have used “one last window of opportunity” when describing the Nokia/Microsoft relationship.

Any further appropriate clichés left as comments will be appreciated. No prizes – just points 🙂

PPS header photo is something to do with having your ducks lined up (ok I know they are probably geese but it isn’t Christmas yet)