hitting the wire*

The rise of a new breed of Service Provider.

My first job in Storm, back in the late 90's was to add a Cellular LCR (Least Cost Routing) product to the International LCR product offering Storm launched with.  We were finding that we were losing deals to the likes of Orion and Telepassport because we did not offer "savings on calls to cellular".  TimWG's words to me were something of the order of "create a cellular product for us and just make sure you don't lose us any money".

None of us saw just how big the Cellular LCR market would be.  None of us realised just  how many more cellular phones than fixed line phones there would be by now.

Cellular LCR has always been a problem for the Mobile Network Operators.  The GSM networks were traditionally designed quite "thin", with some base stations only being able to handle 8 or 16 simultaneous calls from phones "passing through".  Installations of "SIM farms" or large Cellular Fixed Terminal CPE installations had the ability to "flatten" the networks in places.  An installation at PriceWaterhouseCoopers succeeded in causing dropped calls for anyone traveling past their offices in Sandton for weeks after their LCR installation went live.  The networks ended up spending many millions of capex to cater for LCR. 

Much better money was being made in charging Telkom to terminate calls originating in Telkom's network to cell phones.  But the fear of losing the LCR SIM business (and the traffic) to the other MNO network forced Vodacom and MTN to offer the likes of Storm attractive packages.  Once the LCR market had tapered off however, we saw them beef up "off-net" call charges to try and make more margin.  We had to become smarter about how we managed our base of SIMs.

Deregulation and the legalisation of VoIP has changed all of that.  Anyone who is trying to sell you on the idea that traditional cellular LCR is here for many years and it is worth committing yourself to a long term contract is blowing smoke.  The future is in aggregating traffic using either VoIP or once it is available a mix of CPS (Carrier PreSelect) and VoIP and passing traffic over interconnects.  Renewing LCR SIMs from now on is risky business.

The way forward is with the new breed of Voice&Data Service Provider (the EC Act calls them Communication Service Providers), who are geared to make most use of the changes in technology and regulations.  You just have to take a look at the M&A activity (traditional data guys buying voice guys, vice versa, and the likes of Vodacom starting their own ISP) to realise what Storm did years ago - the future is in IP.  LCR will be around for a while yet, unless either DoC or ICASA force some unwise and rather radical changes to interconnect rates.  The UK has one of the most competitive telecoms markets around, and cellular LCR is still alive with the likes of Westlake and True Communications.

Peter Walsh of DataRoom has written a good article on LCR on MyDigitalLife - worth a read if you're interested in a balanced outlook on this market.

Storm appoints a new CEO.

"The time has come the walrus said..." to appoint a new CEO (to mangle the words of Lewis Carroll somewhat.  It is time.  As difficult a decision as it must have been for both Tims to stand back and allow someone else to take Storm to new heights, it is a wise one.  To be honest, I expected them to have done it before now, but have always known they were having too much fun.  We haven't seen the last of them, but for a while at least they will be leaving the new man to get on with making his mark.

Welcome aboard Willem.  We're looking forward to meeting the challenges of growing this outfit further!

Read more here.

(oh and by the way, if you decide to Google Willem - he's not the one who invented the new condom... ! ;)

Local Loop Unbundling report now available.

Thanks to Dominic from nicci ferguson inc. for alerting me to the fact that the LLU report is finally up on DoC's website!  I've been camping there everyday since Monday.  Not only is the report there, but the while site has undergone an extreme makeover of some sort!  It was only when the page appeared that I understood Dominic's warning:

"I suggest a pair of dark glasses be worn when first viewing the new effort from the DoC"

Would appear to be much more user friendly and easier to find documents although I can hardly say I've explored it much.  It looks a darn site better.

Well done DoC! 

(There. I've done it. I said something positive about the DoC. ;)

Now the web presence of your organisation looks a hell of a lot better, let's use it to open up dialogue with your stakeholders?  Or is that shooting for the moon?

Here comes Neotel.

Actions speak louder than words.  When they blocked off the road past our offices last week for a backactor and what appeared to be a road crew to start digging a ditch, I was as grumpy as anyone else.  Until I noticed a label on the underground pipes they offloaded from a truck and piled next to the road...

I couldn't help noticing the backactor driver trying to jumpstart the backactor from a car when I took this - let's hope that is not an indication of things to come?! ;)

that's me - encouraged.

Who's buying Storm now?!?

Amazing how acquisition rumours ricochet around an industry like pings  on the Net!  I'm almost able to count on the fingers of one hand the entities that have NOT recently been rumoured to be buying Storm.  A MyADSL article on Vodacom's foray into the ISP market, mentioned as an aside almost, that they'd been in discussions with Storm.  The phrasing was interesting:

"Vodacom confirmed that they had a few discussions with large ISP players like Internet Solutions and Storm, but added that they have not progressed much further than that.  According to Vodacom’s COO Pieter Uys, Internet Solutions is not for sale and the discussions with Storm did not lead anywhere."

All of a sudden, people are under the impression Storm have got a "For Sale" sign hanging on the door and have ads out the classifieds column!  The funniest was an incident yesterday.  TimWG, one of our Joint-CEO's, wryly commented before the Marketing meeting "Oh, I believe that XYZ (another significant player in the ISP industry) have bought us."  Not an hour later I get a call from an ex-colleague (we'll call him Ted) from XYZ to say "Can you confirm a rumour for me?  Are Vodacom buying you?"  To which of course my reply was "No, but I believe you are!"  Honestly!?

It would be irresponsible of any management team of any company not to consider and explore strategic alliances, partnerships, JV's, acquisitions even.  It would be even more irresponsible not to entertain approaches by entities with interesting offers to discuss.  But 9 times out of 10, discussions of this nature are not fruitful.  They sure seem to get to the "have your heard...?" stage reasonably often.

It is a time where South African ICT companies are waking up to the changes in the regulatory environment, in technology, and the way that margins on basic services are dropping.  It is natural for some mergers & acquisitions to be forming.  Telkom are wanting to buy BCX.  It's hard to keep track of who DataPro have acquired or are about to buy (I trust shareholders are going to see some organic growth there at some stage... mmm?).  Neotel are buying Transtel (good move that, I believe - Transtel have a very good network, quite apart from that appropriated by the DPE, but they lack sales and marketing clout). 

So, do you have any juicy rumours of who is meant to be buying Storm next? 

Drop me a mail. ;)

Some days are diamonds, some days are stone...

First I spotted a mail from Bretton Vine on the IOZ.legal list which mentions speculation on ITWeb that the left have knives out for a number of ANC MP's (the Minister of Communications included) and are angling to oust them from the ANC's national executive committee (NEC).  Purely speculative to think this will lead to her losing her cabinet position though.  A ghastly thought struck me that while it is way overdue, her successor may be the proverbial "devil we don't know" . Ugh.

Then I bought the Cape Argus from the friendly and tireless newspaper seller at the bottom of Station rd in Obs.  Front and centre, the slaughter of 33 students and staff on the campus of Virginia University in the USA.  What is about the US that spawns these campus killers?  There is a move to observe a days blog silence on 30 April 2007 in memory of those who died.  Is it callous to immediately wonder about how many more are dying in Zimababwe while SADEC leaders pussy-foot around Mugabe?

It was while avoiding homocidal minibus taxi drivers on the R300 that I tuned in to the cricket commentary to find the Proteas had neutralised Kevin Pieterson and Andrew Hall was skittling England out. 

I doubt the Aussies will be quite as easy a task.  IF we get the final.

VoIPTopia - when VoIP gets funky.

When it comes to VoIP, we've all got a bit fixated on the means to the end instead of the end itself, which is to make communications not just cheaper (a definite fixation here in SA), but easier and more productive. VoIP is a technology.  Actually it is a protocol, which in turn is only a predetermined method of communications between devices. 

This post is long overdue and I apologise to those who had given up hope of me ever providing a version of the animation we used at the SA Broadband Summit in Feb this year.  Truth is, I've been busy and I couldn't get the HTML right first go.  I've finally hacked it (helps to follow the programmer's instructions to the letter!)

Here it is, a maybe not so futuristic view of what (Vo)IP can enable for the knowledge worker.  There is much it can do for the consumer, but that is another story.  If it seems the narrative is a bit rushed, it is; MeshSmith, the animator, begged me to cut it as short as possible - after all I did give him an impossible deadline - which he made.  Hit the play button below and adjust the sound for optimal listening pleasure! ;)

that's me.  and no one yelled "fore!" dammit!

Is this war? Broadband(ish) style

 

Few things ruin your evening relaxing at a 5–star guest house in a lush Westville suburb (if you travel to Durban on business… there is no place like Ntengu Lodge – service as it should be defined at prices you pay at City Lodge!) like getting a call from SAfm’s AMLive to ask if you’ll comment at 06h35 next morning on Vodacom’s recent broadband price reductions (eh?  I thought it was MTN dropping prices?!).  Shove a microphone or camera at me and my palms wet themselves!  Not quite sure where they got the idea that Storm is a telecoms analysis outfit… need to work on our branding more! :/

So, armed with my HSDPA card and my coal-powered laptop, I started to catch up on recent events, but not before I’d asked Sentient to do some research.  Amazing how quickly one can assimilate info with an pseudo-broadband IP connection!  (please… you cannot call sub 2Mbps true broadband)

Is it a price war or not?  Opinions seem to be divided.  Roger from Sentient:

It may or may not be a price war... but if it walks like a duck, quacks like a duck and looks like a duck, there is a reasonable chance it's a waterfowl of species anatidae

I tend to agree, but then what is the difference between a brief skirmish and a full out war?  The determination to hold one’s position?  What difference will this make to consumers?  With all the recent jockeying, there is a lot of confusion over the various offerings.  MyADSL is always a good source of info on local broadband as Rudolf and his merry mates are fixated on it.  Yes, yes, I know… that why it is actually called MyADSL!

I have no idea if Telkom are going to fire a retaliatory broadside and turn this into a real firefight.  History leads me to doubt it.  But if they don’t, they will lose business to HSDPA, iBurst and MyWireless.  Even with self-install as an option, it is easier (and cheaper) to sign up for wireless.  Cheaper despite the fact that wireless networks are more expensive to deploy.  And don’t forget that the most of the copper has been in the ground way past its ROI period.  I certainly hope Telkom retaliates.

But price is only one aspect.  I want DSL that doesn’t fall asleep on the job, like some Cabinet Ministers we know.  Let’s see some differentiation on contention ratios for a start.  And I still have to hear when we’re going to get access to some of the fibre that is supposedly being force fed down cable ducts… <sigh>

Anyway, all this got me wondering how one can compare the various offerings so I took a stab at creating a graphic to make it a bit easier (click on the thumb-nail below).  I’m not convinced I shouldn’t have opted for bars of some sort, but after giving up on the bubble representation on the data in Excel, I resorted to creating a balloon farm of my own.  Let me know if you spot some errors. And lets have some bright spark track down a Web2.0 app we can hook up to MyADSL and make some sense of it all.

That’s me.

ps.  Joe has just chastised me (and rightly so) that I’ve left out Amobia and Uninet.  An oversight I will address after I’ve had some sleep!

Madam Minister, what were you thinking?!

There are times when politicians say the damnedest things.  Sometimes they are actually intelligent things.  Most of the time (as was observed by one wit in the chamber the other day) one could make use of the resulting hot air to help Eskom out of their energy crisis.  And then there are times when comments are made that are breathtakingly and gob-smackingly straight from the other side of Lewis Carrol’s looking glass!

If the report in ICT World which came out on Friday is correct, our Minister of Telecommunications is either highly disingenious, badly informed or ignorant of her own affairs (and as I have yet to renew my subscription to the Parliamentary Monitoring Group, I cannot verify her words). In a parliamentary briefing last week she allegedly excused the poor progress that the country is making toward market reform in Telecoms, and the desired drop in the price of telecommunications on the private sector.  Apparently we are “not coming to the party” on Self-Provisioning and VoIP among others.

This after ICASA, the industry and a good few telecoms lawyers interpreted her September 2004 statement as allowing VANS to self provide, which she then changed her mind on one day before the 1 February 2005 effective date.

ISPA have quite rightly called for clarification, and if the Vodacom fellow I was sitting next to on the plane to Joburg tonight is correct, she may have meant the Mobile Network Operators when she talked about Self Provisioning… but then, why didn’t she say so?  And aren’t they still waiting for spectrum?

And VoIP?  I thought things were rolling along very nicely thank you!  At least they are in our neck of the woods.  But VoIP and Broadband are tied at the hip in many respects and broadband is… well, not very broad and then when it looks that way, it suddenly shrinks again without notice.  And the ADSL regulations that came out last year from ICASA were not very helpful and have no implementation schedule attached…

You could start with a Broadband Policy?  Oh, you’re too busy working with the DPE to build the broadband network to solve all our problems? 

And if you don’t mind me asking, what exactly were you expecting Ma’am? We’ve yet to see some real leadership, clear policy and directives coming out of DoC.  If you keep making ambiguous statements and then retracting/correcting them with equally ambiguous statements… we’ll just have to “kyk noord en f** voort” neh?

aluta continua.

Putting meat on the bones of the Electronic Communications Act

ICASA have published for comment a document which seeks to define the wholesale termination market. This is the first of a good few of these that are due to come out of ICASA as they start building the regulations that put meat on the bones of the EC Act.  Be a good citizen, read the docs, debate them with your colleagues and give some constructive comment on them.

It is vital that we define the markets (after all, it determines just how level the playing field is) as best we can in order to then agree on the rules that we will play by. Genesis Analytics have done a fair amount of work here and I recall Robbie Lipshitz being quite vociferous and asking some interesting questions at an EC Act conference last year. But it is not possible for one entity to see all the angles. Take up your chisel and do your bit in shaping the rough work into a passable form.

The terms and conditions for the Network Provider and Service Provider licenses are due shortly. Rumour has it that the conversion process is such that it will make any entity that had numbers issued to it by ICASA before 19 July 2006 (the date the EC Act came into force) a Network Service Provider. This will not require an invite from the Minister. A boon for some? A bugbear for others? (the licenses will not come without conditions and obligations!) An unexpected outcome for the Minister?

Some interesting months ahead.

(using BlogJet for the first time to draft this post as TypePad’s editor does weird things which drive me nuts and copy and paste from MS Word causes Feedburner indigestion… so please excuse any teething problems)