Neumann Cut Loose; Rogers Blows Wi-Fi

Can’t say it was terribly surprising Bell Mobility CEO Michael Neumann was fired given the country’s second largest wireless carrier has struggled in the past year relative to rivals Rogers and Telus.

If anything, Bell Mobility seems to lack momentum. Rogers is on a roll with the $1.4-billion acquisition of Microcell and the strong growth of its data business, while Telus continues to sport the highest ARPU in the business and it is chalking up good market share growth.

When you think about the fact Bell Mobility is supposed to be one of BCE Inc.’s growth engines, it makes sense someone has to take the fall if there are problems. That said, you can’t blame Neumann for Bell Mobility’s billing system disaster, which stunted growth last year.

In other wireless news, Rogers blew an amazing opportunity to capture the Wi-Fi market with a silly marketing alliance with the Second Cup coffee chain. Rogers plans to charge latte drinkers $0.15 a minute for wireless access, or $15 for a 24-hour period. That's fine for people on expense accounts but Rogers could have scored a huge strategic victory by giving it away for free or charging a small fee to its 5M+ wireless customers. Instead, it's more than likely only a small handful of people will give Rogers' Wi-Fi service a go. To be honest, I expect better from Rogers but maybe ARPU and the focus on profitable growth has taken away any marketing creativity at Rogers.

RBC Conference

I'll be doing some different things this week on the blog as I'm attending the RBC Capital Markets telecom, tech and media conference in Banff. There should be lots of interesting tidbits given all the COOs, CFOs and CEOs attending. Maybe BCE's Michael Sabia will give us the inside scoop on BellGlobemedia?! The world wants to know if he's wheeling, dealing orwaiting. It's the $1.5 billion question, don't ya know.

The Evolution of UMTS

As wireless carriers look to drive revenue from data, there's a lot of talk about next-generation networks – be they UMTS, EVDO, 1X, etc. During Rogers Communications' fourth-quarter conference call last week, CEO Nadir Mohamed talked a lot about HSDPA, which is the seen as the evolution of UMTS technology.
In a recent report, TD Securities said it was impressed with Nortel's technology during demos at the 3GSM show in Cannes. “Nortel was only vendor actually willing to show off HDSPA in public view using a standard PC card as the consumer terminal,” TD said. “Most other vendors hid their “solution” from inspection by conference-goers. Nortel hooked up a HSDPA-enabled base station to the existing commercial UMTS network in Cannes (built by Nortel last year, owned by Orange).
TD also came away from Cannes with some questions about how carriers are going to drive revenue from wireless broadband technology. Most executives, it discovered, were strong on hyperbole but vague on details. The two big questions are what applications wll be pumped down the pipe (e-mail, music, real Web, etc.) and how much people are willing to spend for mobile speed.

Cogeco's Telephony Partners

For people looking to see how Cisco's doing in the telephony market, Cogeco Cable said todaythat its residential telephony service, which will be launched later this year, will use Cisco's network technology, including IP softswitches and voice gateways. I guess the folks at Nortel can't be too happy about missing out on the business. Cogeco's interconnectivity to the PSTN and long-distance routing will be done by Telus Corp.

Tepid Internet in MVNOs

Last week, Virgin Mobile USA announced it passed the three million subscriber barrier – a eye-catching achievement given the business, which rides on Sprint's wireless network, has been around for only three years. Despite Virgin's success, there does not seem to be enthusiastic interest in MVNOs in North America. One reason is the carriers probably believe there is plenty of grow left in the market without having to use partners to generate growth. In Canada, where penetration is only approaching 50%, it will be interesting to see the Virgin-Bell Canada MVNO partnership, which will launch March 1. It it works, maybe Telus and Rogers will climb onboard. If Virgin makes life miserable for Bell, Rogers and Telus by attracting pre-paid users and people unhappy with paying for minutes they do not use and network access fees, Bell could regret the day it got into bed with Richard Branson.
I would not under-estimate Virgin's appeal. There are plenty of people out there who want a wireless phone but unhappy with what's out there right now. Hopefully, Virgin will show there is an appetite for choice and this will encourage the CRTC to give competition a boost by introducing local-number portability. It may even encourage the fat and happy carriers to offer customers more choice in packages and devices.

George Colony's Take on Google

Forrester Research CEO George Colony appears to be a Google skeptic – a difficult to find animal given Google's dominance of the search engine market and the performance of its stock. For a Google's strength, he points to a weakness. Call me a skeptic but I think Colony, who was interviewed by the New York Times, is under-estimating Google's staying power. He worries about competition but Yahoo and Microsoft have been battling to unseat Google for years with modest success. Colony says another problem is the “cost” to switch from Google to another search engine is zero but that ignores the reality Google's search technology continues to be superior to anything else out there. Finally, Colony believes the Internet is moving beyond being page-oriented, and it will be a challenge for Google to adapt. Frankly, this opinion discounts Google's leadership and army of Phds working behind the scenes.
Colony has a habit of making somewhat outrageous claims about the Web. In 2001, he was promoting something called the X Internet, which would make the Web sites of the day out-of-date dead ducks. Not sure that has transpired but he has a knack for making news, eh!

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