Telus and Bell to merge ? Is that possible ? PLEASE NO !

Here’s some news that caught me by surprise. According to prominent RBC Dominion Research reporter Jonathan Allen, he speculates that a merger between Bell and Telus is somewhat likely over the coming year.

“Faced with cyclical and secular pressures on the top-line, we believe that a BCE-Telus merger is increasingly likely in the coming year or two as both companies look to cut costs and sustain margins,” Jonathan Allen, of RBC Dominion Securities Inc., wrote in a research report.

“The arrival of greater competition in the wireless sector through the launch of three to five new firms in the next year should help remove regulatory hurdles for a deal,” he said.

Although a merger between Bell and Telus might be good for profits and stockholders through consolidation, it would be terrible news for Canada’s already oligopolistic, and what would become monopolistic Telecom market.

According to Allen, increased competition in the cellular market would open opportunity for such a merger. Allen seems to be focusing on cellular, but, these businesses provide more then just cellular service to the Canadian marketplace. The Canadian business market is already limited to a small handful of TIER 1 carriers for Telco grade services including PRI, OC-3, SIP, T1, analog lines, and internet services. TIER 1 carriers include Bell, Telus, Rogers, Allstream, and to a lesser extent on a regional basis, Sasktel, and ManitobaTel (which owns Allstream). Bell and Telus also sell business services, hosted solutions, phone systems, and data solutions to the business market – this business makes up a substantial portion of their revenues and profits. Although probably good for Digitcom’s business since it would mean 1 less competitor in the market, it would spell disaster for the Canadian market.

While Allen’s report is entirely speculative, it does make for interesting news.

Internet tethering is now included for all Rogers customers on a minimum 1GB data plan e7dz5sa2v6

e7dz5sa2v6 One of my favorite technologies is internet tethering. When Apple released iPhone version 3 they also introduced the capability of tethering your iPhone via Bluetooth or USB to your Windows laptop or MAC. I’m an avid MAC user (in case you couldn’t already tell from all of my blog posts), and use this new feature religiously. Now, whenever I need wireless access I enable through the Bluetooth settings the “MAC to iPhone connection”, and – MAGIC – I can surf on my laptop through my 3G iPhone. This feature also works for Blackberry users as well.

As long as you are on a data plan that gives you at least 1 GB of throughput per month, you can use iPhone tethering for no additional charge in Canada until at least the end of 2009. It’s unclear what will happen next year, and it seems that Rogers isn’t sure yet either. I suspect Rogers is trying to recover from some of their marketing blunders from last years iPhone intro fiasco – hopefully they have learned from the error of their ways and keep this amazing feature included with the 3G data plan.

MORE: This blog does have a lot of American readers. At this point AT&T is still trying to figure out whether, and how they will provide 3G tethering services to their customers. Seems like a first. It’s usually the Americans that are leading the way with these services, and the Canadians who follow way behind. One thing which is very upsetting is that Rogers is still not allowing the Skype program to be purchased through the Canadian Apple App store. More on this later.

The Gloves Come Off – Nortel / Ericsson VS The Cdn Govt

No, this isn’t about international hockey, but it is about gold – specifically $1.13 billion of Nortel gold.

At first glance, it looks like a typical bankruptcy auction.

Sweden’s Ericsson has swooped in and made the winning bid for what remains of Nortel’s assets. One multinational company buying the carcass of another.

But it’s not really that simple.

Canada’s own telecommunications giant, RIM, is claiming that they were excluded from the auction, which is why they didn’t win. Their justification for not submitting a formal bid was because RIM wanted the long-term evolution (LTE) patents included in the sale of the wireless network. Sure, demanding more in a sale is the Canadian way, but if someone else is willing to take what’s on the table for the price you are asking, you can’t blame the court-approved auctioneers for trying to cash out quickly. Since the offer was almost double what Nokia Siemens Network had offered, this seems like a pretty good deal for Nortel.

But wait, there’s still more to it.
Had this just been a sale of one business to another, this might not be such a big story. The real concern is about the assets being sold to Ericsson; are Canadian tax-payer dollars being taken out of the country, bypassing a local option that would keep the technology, jobs, and tax dollars here in Canada? Or will this sale to Ericsson save Nortel, as well as some of the jobs and money there was invested in the struggling company?

Here is where the politicians get involved.

Ottawa has called an emergency hearing, to investigate the circumstances of the sale to Ericsson. At a time when Canada is actively trying to increase foreign investment, you can bet that this case will be heavily scrutinized by all parties. The opposition party wants to halt the sale (or at least take a really good look at it) claiming that it is possibly harmful to Canada. Some people feel that Nortel has the technical smarts, but lacks the business skills, to be a contender in the future of LTE; while others feel that selling Canadian technology to foreign investors while bypassing local options is unpatriotic.

Expect a lot of finger pointing and excuse making on Friday in the televised coverage of the investigation. The federal government will be grilling RIM as to why they didn’t bid; while the NDP will be focusing on why the current government wants to give away Canadian secrets. This will be must-see Canadian TV.

How many rounds will this one go ? What do you think?

Spinvox – not as confidential as you might think

When I first heard of Spinvox some time ago I was mesmerized with the technology. Spinvox converts your voice mail message to text and emails the voice message to your email address saving the user from having to call into, or listen to the actual contents of the voice mail message.

On the surface it seems like brilliant technology. Quite a few major manufacturers, Avaya for example, and service providers, Rogers, Telus, Sasktel, Cincinnati Bell and many others, use the Spinvox technology as a pay per use service for their clients.

Spinvox is, in many respects, a very large service bureau offering a subscription service. And, Spinvox is, to a great extent, a technology company. I imagined racks and racks of servers in multiple data centers processing, and providing speech to text of the voice mail messages. That’s why, after reading Techcrunch’s review of Spinvox I was left somewhat disappointed.

Let me explain.

Apparently, according to the article, Spinvox will use a completely automated method of processing the voice mail message and converting the message to text IF the message is easy to decipher. In that case the process is entirely automated. If the message is not easy to decipher and the automated system cannot process the message for whatever reason then the message is sent to a live operator to transcribe the message in its entirety. I often wondered how the system could decipher those heavy accents. Now I know. It’s NOT !

The article continues to explain that the call center staff are background checked, can not bring recording devices into the room … but, the process does have a human interfering with, and listening to someone’s confidential voice mail message. Rogers should advise clients of this. So should Spinvox – there should be a very clear disclaimer on their web site. But, there isn’t. Imagine the liability of CEO of a large publicly traded company using this service who receives a voice mail message from the CFO, SEC … the contents of which are extremely confidential. For example – “Hello Bob. Just to give you a heads up. The division ABC will report a slight increase in sales, but XYZ will disappoint the markets during our morning announcement”. Should this message be heard by anyone other then the sender / recipient?

The natural presumption is that a voice mail, or email message, is confidential. But, it might not be. I think the company using this service should state on their outgoing announcement “You have reached Bob Smith. Please leave a non confidential voice mail message at the tone as this message may be transcribed by a human prior to reaching my inbox”.

My guess is – the wrong voice mail message will end up in the wrong person’s hands someday. The end result will be messy. I think all providers, Spinvox included, MUST disclose this fact in the sales process otherwise it’s somewhat misleading.

Jeff

Will eBay shut down Skype ? e7dz5sa2v6

Here’s an interesting one – eBay announced some time ago that they wanted to spin off Skype into a separate publicly traded company, but now it looks like the initial Skype founders are threatening to take back some of the patents and technology, which ultimately, could force Skype to shut down their service.

The initial Skype founders have formed a new company called Joltid Ltd which apparently owns some of the Skype technology. Joltid claims that Skype doesn’t have the right to use all of the back end code that allows Skype to operate. eBay is now suing Joltid for rights to the technology, and is now contemplating a re-write, according to Bloomberg, of those apps within Skype. Problem is, “The new software will be expensive and might not work,” according to the Bloomberg article. “The company said it might have to shut down Skype if the dispute with the founders isn’t resolved.”

eBay paid $2.6Billion for Skype in 2005. My question is – what did they pay $2.6Billion for if ultimately, 4 years later, they are in this dilemma ? How could they put themselves, and their shareholders at such risk. They left the core of some of the Skype technology in the initial founders control who 4 years later form a new company and hold eBay hostage. Hmmm … seems like a major blunder.

Rogers announces HSPA+. Wireless data at 21 Mbps

I was talking with a client yesterday about Rogers and he mentioned that Rogers recently announced a new high speed data network called HSPA+ (High Speed Access Plus) was being introduced to Canada. It’s true !

Starting in August, Rogers will increase its download speed to 21 Mbps in the Toronto area, and will quickly expand to other cities in Canada in the coming months. Rogers is the first carrier in North America to launch HSPA+. These speeds are significantly greater then the speeds offered by both Bell and Telus, and will catapult Rogers in the cell / data race in Canada. 21 Mbps is significantly greater then the speeds I am getting off my DSL connection at home (3 Mbps down), and even faster then we’re getting at Digitcom (8 Mbps). And these are both wired connections.

Bell recently started an ad campaign showing how their services are less then Rogers – and you get more bandwidth and cell time for less $’s.

Not only is Rogers the only carrier in Canada that can sell the Apple iPhone, but, now has wireless speeds that dwarf Telus and Bell’s. Funny how that doesn’t show up in the Bell ad !

Road Warriors Beware – you will never escape your office phone ! Is that good ?

One X Mobile

You will never escape your office phone. Is that good ? I guess that depends on when you ask me !

One of my favorite (and loathed at the same time) telecom features is mobile twinning. At Digitcom we sell and support a few different phone systems, and on my desk I happen to have an Avaya IP Office 5420 digital set. The phone, and phone system support a feature called Mobile Twinning, sometimes known as Extension to Cellular, One X Mobile, or a variation of sorts …

Essentially, when you call my desk set my cell phone rings at the same time. When I answer my cell phone my desk set stops ringing, and when I answer my desk set my cell phone stops ringing. If I answer my cell phone I can go back to my desk, press my “twinning” button, and pick the call back from my cell to my desk. AND, if I answer the call on my cell I can hit “**”, and enter another extension to transfer the caller to another extension in the office. I use this feature all the time – it’s essentially changed the way I work, both from within the office, and especially, out of the office. I bring this up because I’m just getting back from a short vacation and for the first few days I left my office desk set on TWIN mode. Much to my wife’s dismay I answered some work calls on my cell, and needless to say, I had to call into the office after the first few calls to “untwin” my desk / cell (by the boss’ orders).

It wasn’t that long ago that Digitcom sold in building mobile solutions. Although we still do sell in building IP Dect and mobile type solutions, we are selling much less now that twinning is available. Avaya’s in building solution is the IP Dect. This solution, for 5 base stations, 5 sets, could sell for $7,000 or more once you install, cable … Alternatively, you could purchase a license with Avaya (called One X Mobile) at $80 / user, press your mobile button on your desk phone, and MAGIC, they both ring simultaneously. No wiring, no base stations, no installation. The only downside though is that you are now using your cell air time.

Of course there are other ROAD WARRIOR options and these include: soft phones, remote desktop connectivity, IP desk sets, VPN phones … and I will review these in a separate BLOG at a later date. In the mean time, my cell is ringing and I gotta go !

More: Isabelle Guis, who leads the Avaya Product Marketing and Go-To-Market efforts in the Small & Medium Enterprise space, just wrote a really great blog titled: How small businesses can empower their teleworkers.

The Nortel fiasco continues – what took so long for the Cdn. Government to wake up ?

What on earth took so long for the Canadian Federal Government and RIM to wake up and realize that Canada’s prized telecom assets were up for grabs ? The Nortel bankruptcy fiasco has been going on for 7 months. Nokia Siemens offer for the CDMA business was made 2 months ago, and RIM and the Government decide at the last minute, almost after the point where it is too late, to make an issue of these assets.

I’m figuring that both Tony Clement, and Jim Balsille are both smart business minded individuals and savvy negotiators; Both well aware of the deadline, both well aware of the consequences of selling these assets to a foreign firm, yet, both decided to leave this discussion to after Friday’s deadline. Assuming that both are smart, and knew what they were doing, I suspect that these discussions were purposely left until the deal was closed, and winning firm decided.

Now that Ericsson has won the auction: What is RIM looking for ? What is the Federal Government looking for ? I suspect they are both trying to wring some concessions from Ericsson.

RIM could be looking for some of the tax losses, R&D tax credits, or, most likely, patents.

The Government – they want to guarantee jobs of course, but, they probably don’t want to provide the $300 Million EDC loan to Ericsson – the same loan guarantee they offered to Nokia Siemens. Ericsson is asking for it. Now, how can the Government get out of it ? And in the mean time, Ericsson is asking for Canadian money to finance Canada’s assets. You don’t think part of Nortel belongs to Canadians ? Think again. We should add up how many $’s Nortel has received over the last century – R&D tax credits, EDC loans, payments; This isn’t just a Canadian company – it’s partially a company belonging to Canadians.

These last minute poker tactics might work, but, at what expense ? Change the rules enough and Ericsson might walk. Where does that leave us ? What other Canadian company can come to the table when / if Ericsson walks ?

On a completely unrelated topic, I’m typing this email on a airplane on my way back from Denver. The lady in the seat sitting next to my 11 year old son is watching a very inappropriate movie. My son keeps looking over (I’ve now switched seats with him), but, my question is: shouldn’t the airlines better screen this public content ?

The dismantling of a Telecom Giant – Poof – Ericsson takes a slice out of Nortel

One more candle down. And Canada won’t be celebrating. A shame really. Nortel has been Canada’s Telecom’s gem for decades, and not that long ago, Canada’s business gem. Now they are almost gone; Quite the fall from glory. They had a market cap of $350 billion just 10 years ago, and now, POOF.

Well, business is business, and I don’t want to lament on the outcome. Nortel has unfortunately been a victim of their own demise, and now it looks like Ericsson will end up with Nortel’s crown jewel – the CDMA business, which they acquired through a court monitored auction on Friday for $1.13 Billion. There were 3 bidding firms: Nokia Siemens, Matlin Patterson, and Ericsson. $1.13 Billion was almost double the initial offer made by Nokia Siemens, which demonstrates that there is value in Nortel’s assets. It seems like Ericsson came out of left field – they weren’t even mentioned until very late in the auction process. Ericsson and Nortel were aggressive competitors with Nortel the predominant North American CDMA player. This will certainly help Ericsson solidify their position in the market.

The next candle to fall will be the Enterprise business. Avaya submitted their initial bid last Monday for $475 Million, and there will no doubt be more bids.

Avaya IOC Council meeting in Denver – definately headed in the right direction

I just finished 2 days of meetings at the Avaya office in Denver. I sit on the Avaya IOC advisory council which is comprised of approx. 15 dealer principals that get together approx. every 6 months to review Avaya product, direction, thoughts, and general best practices. I left the meeting very encouraged and motivated.

avaya_logoAlthough I am sworn to secrecy and certainly can’t share product or company direction, what I can say is that Avaya is definitely headed down the right path. The Avaya folks were extremely passionate, knowledgeable, and had an excellent sense of the product, their position in the market, and the where they needed to go to keep both the company, and their products at the top. One of the other by-product benefits is that you get to share ideas with other like-minded dealer principals. Looking forward to the next meeting – it certainly helps that it will probably be in Florida in January.

I now get to relax for the next few days and take in some of the Colorado outdoors; horseback riding, white water rafting, and mountain climbing.