2003 Top Ten: Services Stories
OK. Who's sick of VOIP already?
Probably quite a few people, seeing as how packetized voice has had nearly as much media coverage recently as Saddam's hole, pardon the expression.
But while VOIP has dominated services news in the past few months, it's not the only service that has commanded attention during the past year. Oh no. So to remind you that the SIP vs MGCP debate isn't the only thing taxing the minds of the communications gurus, here's a rundown of this year's top service stories.
No. 10 BT Gets Aggressive With VOIP December 11
We didn't say there wouldn't be any VOIP stories at all in this list...
BT Group plc (NYSE: BTY; London: BTA) stepped up to the consumer VOIP wicket with typical British irony: Its offer is aimed at the very U.K. consumers who actively chose not to spend their money with BT -- the cable companies' customers.
The move is significant, in that it sends a signal that Europe's major operators are taking VOIP seriously. It also means they have confidence that the technology works, at least to some extent.
All the same, the timing of BT's announcement is suspicious, coming, as it did, just a few months before the arrival in the U.K. of VOIP's chief U.S. champion, Vonage Holdings Corp., due to invade Europe early in 2004 (see Vonage Raises $35M).
And BT itself says its VOIP quality of service might disappoint. In other words, it might frustrate those who sign up for it, and make them swear on oath never to use a BT service again. Ever.
For other stories about POTS carriers talking up consumer VOIP, see: AT&T to Launch Residential VOIP , RBOC VOIP Coming in 2004, and Time Warner Delivers Phone Service.
No. 9 Electrical Access: Dream On? June 25
Here's one to file under "It'll never take off, unless…"
The idea that the power grid might be an alternative access infrastructure to copper and cable for broadband service providers might sound strictly from left field, but as one analyst notes, "It's a very promising idea." It's actually been around for a long time but appears to be gathering momentum (see ETSI Hosts Powerline Event).
This is one to read, remember, and recall, when your electricity company drops off a router that has a standard power socket plug sticking out of its rear.
What next? Can an entire central heating system be turned into one big wireless access point?
No. 8 MCI's 'Creative Routing' July 28
We couldn't have a services Top 10 without mentioning at least one carrier wearing an "I'm proud to be in Chapter 11" t-shirt, so here's a cracker about the company formerly known to the world's nervous accountants as WorldCom Inc.
This story is worth noting simply for a quote from an MCI (Nasdaq: WCOEQ, MCWEQ) engineer: "MCI has turned ‘least-cost routing’ into an art form… With their volumes of traffic, hundreds of its switches would have to be programmed for this kind of routing… You would need the chief engineering officer involved."
Now MCI is due to emerge from bankruptcy before the end of February 2004, so there's some fun to be had before the Easter Bunny nibbles at your slippers, or even your slippery eels (see MCI Europe's Slippery Strategy). Once it is out of financial bondage, it will begin a branding exercise aimed at disassociating itself from dodgy financials and crass mismanagement, something that fellow telecom doghouse resident Global Crossing Holdings Ltd. is already trying to do (see Euro GlobalX Boss: No Price War).
No. 7 P2P Plagues Service Providers April 24
This was the year when peer to peer (P2P) became more than a yacht race course direction, as millions of megafiles snaked their way across the Internet, thanks to the likes of Kazaa, and clogged up the arteries of the ISPs.
But where there's a network ailment, there's also a gaggle of startups [ed. note: Gaggle? Surely a swarm, a horde... a throng perhaps?] ready to offer a cure at a price. Say hello to CacheLogic Ltd., Ellacoya Networks Inc., P-Cube Inc., and Sandvine Inc., among others. These companies say they can help operators deal with the file-sharing nightmare, and more besides.
However, none of them claim (yet) that they can cure baldness or poor dress sense, two other chronic and seemingly intractable illnesses in the carrier sector.
No. 6 VPN Player Collects Cash December 8
This story is worth noting because it highlights a services acorn that could potentially become a towering oak (isn't nature wonderful?). The service in question is an IP VPN with QOS across multiple carrier networks, something that's incredibly tough to do at present, if at all.
Yet here we have a startup in the form of Nexagent that says its technology can make such a service a quick and simple reality for large multinationals. In addition, Nexagent's founder, the ever-youthful Charlie Muirhead, says everyone, including the current international VPN service providers, is invited along to the party.
(To find out how Nexagent proposes to help integrators and carriers deliver such a service, read Nexagent Promises VPN Nirvana).
There are a couple of key things that might stop this nut from developing further. First off, Nexagent's technology might not work. Secondly, a concerted effort by some of the industry's larger players might leave Nexagent's acorn with too little room to grow, and the startup may never become any more than a promising bud.
Reports that teenage (well, 28 actually) telecom sensation Muirhead has green fingers have not been confirmed.
For more on the development of VPNs, see: VPN Customers Spoilt by Choices, Verizon Expands MPLS Plans, VPNs à la Carte, and Demand Grows for MPLS VPNs.
No. 5 Sprint Doubles Down on MPLS October 14
Here's something you don't see every day -- a carrier changing its mind and then denying it has done a U-turn. (You might see it happen a lot, but not every day.)
The carrier in question was Sprint Corp. (NYSE: FON), and the change of heart/consistent strategy (delete as appropriate) concerned the provision of MPLS-based IP VPNs, a service previously spurned by the carrier.
The story was also noteworthy for the money-back guarantees incorporated into its service-level agreement.
By the way, Sprint's new CEO Gary Forsee had an unusual introduction to his new company's financial conference calls, when technical difficulties cut him off while he prepared to unveil some lackluster results (see Sprint CEO: Can You Hear Me Now?).
No. 4 Net Up, Phones Busy in Blackout August 15
Remember when the lights went out in New York and surrounding states this summer, and the U.S. and Canada had a "handbags at 10 paces" squabble about whose fault it was?
Well, the Internet trumped the circuit-switched telephone network for reliability, according to this story. And that got the message boards buzzing about just what the Internet really is. Check it out.
No. 3 FastWeb Piles On the Users October 8
In theory, the convergence of voice and data networks has been around for some years now, but here's a European service provider that has put it into practice from Day One, and which had increased its customer base by more than 100 percent in a year to nearly 300,000.
The operator, using fiber-to-the-home and DSL over unbundled copper, is Italy's FastWeb SpA, which is providing incumbent operator Telecom Italia SpA (NYSE: TI) with some stimulating competition in some of Italy's biggest cities. FastWeb's combination of voice, data, and entertainment services (including more than 100 TV channels) across the same connection has helped to spur Telecom Italia, already quite progressive among European PTTs in terms of its use of IP infrastructure, to match the startup's services.
Of course, the real test is whether FastWeb can turn its achievements in the field into a profitable business, and it looks as if we'll find out whether FastWeb can turn a euro or two, or not, in 2004.
The coming year should also prove telling for fellow European services startup Bredbandsbolaget AB (B2), which is setting the pace for alternative operations in Scandinavia (see B2 Readies VOIP Over DSL). [Ed. note: We predict that in 2004 carrier customers will all be asking the question, "Is it bigger than a Bredbandsbolaget?" Really.]
No. 2 FCC's Powell: Let VOIP Be December 1
While not being quite as exciting as we'd hoped (the bellheads didn't ambush the netheads with baseball bats outside the rest rooms, as far as we know), the Federal Communications Commission (FCC)'s initial meeting to chew over whether VOIP should be regulated or not was a pivotal moment in this year's services calendar.
It was worth going along just to see FCC chairman Michael "I'm not resigning, OK?!" Powell decide he'd had enough for one year and was more interested in recalling his previous night's viewing of the Discovery Channel: "Does VOIP look like a duck and quack like a duck because you chose to create it that way -- or can it be made to look like a fish?"
Proof, as if it were needed, that at least one of the key telecom decision-makers in the U.S. thinks that VOIP is a Latin American lizard related to the chameleon. ["Beryl, I think I just spotted a VOIP in the rockery!!"]
The meeting took place just as the telecom world was starting to get sick of being reminded that VOIP is "pronounced voyp, to rhyme with... well, whatever..."; and the word "overkill" sprang to mind far too often. Not that we weren't in the thick of the coverage, of course! Here are some choice VOIP stories that we haven't already mentioned: Europe's VOIP Scene Is Hot, Carriers Say VOIP & SIP Are Hot, SIP Is Hip, Say VOIP Promoters, Global Crossing Vets VOIP.
No. 1 Skype Spooks Operators October 31
Any story that includes the words "sucker" and "bender" in the first sentence, and then doesn't elicit any legal proceedings, deserves to be in the No. 1 spot.
More importantly, this was the year's most radical service, and one that will likely have ramifications throughout at least 2004 and 2005. We're talking about VOIP again, but this one's a bit different, as it comes from Skype, the Internet phone service set up by Kazaa founder KaZaA Founder, Niklas Zennstrom.
Check out this story for carrier reaction to the service that could be a prickly thorn in their side, and for the sheer gumption of Zennstrom, who brazenly predicts the slow death of POTS. “I see a clear parallel to the shift from fax to email,” he says, predicting the replacement of traditional telephony by the use of his service. "Skype is the email, POTS is the fax.”
Services visionary, or marketing medicine man? You decide.
— Ray Le Maistre, International Editor, Boardwatch