Mark Evans

BT Jumps on Microsoft IP-TV Bandwagon

The folks in Redmond must be happy and relieved after BT decided to enter into a commercial agreement to use Microsoft's IP-TV Edition software. The deal comes on the heels of Telstra deciding not to proceed with an IP-TV trial using Microsoft's software, while Swisscom and SBC have delayed the launch of their commercial services. BT said it will conduct IP-TV trials early next year before launching a full-blown commercial offer in the summer. It is hard not to get the idea the buzz surrounding IP-TV is running ahead of the technology. While Microsoft is working on a key part of the IP-TV equation, it is just one piece of the puzzle that also includes software, hardware, network upgrades, programming and back-office billing and provisioning systems. Until all the pieces come together and carriers can provide a fully-baked service to 100s of thousands of customers, IP-TV will not be ready for prime-time. The problem is the longer carriers wait to get into the TV business, the bigger advantage the cablecos enjoy.
Addendum: It was rightly pointed out to me that many carriers are already offering “Telco TV”, including Manitoba Telecom Services, Aliant and Sasktel. None of these carriers use Microsoft software.

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Nortel's PEC Paying Off Already!

Hey, spending nearly half a billion dollars on mid-tier systems integrator wasn't such a bad idea after all. Nortel PEC Solutions (formerly PEC Solutions Inc. before it was bought by Nortel for US$448-million) has signed to a deal with NASA's Mission Command and Telemetry Network to upgrade its networks so critical data can be shared between the Space Shuttle Discovery, the International Space Station, and NASA operations centers. Almost as important, Nortel PEC will install a “mobility solution” - how come they just don't say wireless network? - at the Kennedy Space Center so journalists attending launches can secure access the Web while moving throughout the six-acre site. Now if Nortel would only provide wireless Web access during tomorrow's AGM, that would be a very good thing.

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Rogers' VOIP Plans

The big question in the Canadian VOIP market these days is when Rogers will launch its cable telephony service. CEO Ted Rogers has talked about July 1, which is the 20th anniversary of Rogers Wireless, but Rogers' PR folks are sticking a “mid-summer” timeframe. UBS Securities met with Rogers COO Nadir Mohamed yesterday, who heads up the company's cable and wireless divisions. UBS believes Rogers will roll out telephony in a few weeks, and push digital cable and phone service as a way to maximize each truck roll. UBS also expects Rogers will price its telephone service at an “attractive discount” between (Shaw $55 a month and Videotron ($15.95 to $30 a month). I've got Rogers high-speed and cable so it will be interesting to see what kind of deal Ted's going to offer me. Something in the $30 a month range with Web-based features (voice-mail to e-mail, easy ways to configure services such as call-answer and call-forwarding) and a healthy amount of LD would probably lure me away from Sprint.

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Blog Search - A New Tool

In response to my blog on the frustrations of blog search, Randy Charles Morin let me know about a new search tool he recently created called kbSearch. It's a meta search engine that “queries many other search engines by using their RSS interface and presents the results from these search engines in one common interface”. It is a solid first step by offering an easy way to check a variety of sources without having to waste time navigating through the Web. You can also add new feeds to a number of RSS readers - NewsGator, Yahoo, Pluck, My MSN, etc. - with one mouse click. The next suggested step in kbSearch's evolution would be upgrading the interface, which is pretty basic. Nevertheless, kbSearch is definitely worth checking out. With another upgrade or two, Randy, my blog search conundrum may be solved. Then, I'd want a search engine that can weed out all the blog crap out there, and present most interesting and relevant results.

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Nortel AGM Nears

In about 24 hours, Nortel Networks CEO Bill Owens is apparently going to provide the rest of us with his strategic vision. This will make the trek to the Toronto Congress Centre in suburban Toronto worth the $70 return taxi fare ( I hope!). Nortel spokesman Anne Fuller told Reuters that “He's going to talk about some progress on the strategic plan, but also talk about priorities and strategy moving forward.” Given Owens has been on the job for 14 months, it will interesting to see what Owens has to say about Nortel's technology portfolio, which is getting a bit old in the tooth despite US$2-billion of R&D a year. For all the talk about India, China, security and the U.S. government, the fundamental challenge facing Nortel is its technology portfolio. With all the distractions of the accounting scandal and the inability to match M&A moves by rivals such as Alcatel, Cisco and Juniper, Nortel has fallen behind in some key growth areas. Sure, it's a major player in wireless but Nortel is not a robust competitor in the access, router and optical markets. This is what I'd like Owens to talk about tomorrow.

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The P2P Backlash on MP3 Sales?

Now that the U.S. Supreme Court has ruled P2P services such as Grokster are liable for the actions of their users, a big will be the impact will be on MP3 players. Whether anyone wants to admit it, MP3 players such as iPods have become popular because people can load them up with free hundreds, if not thousands, of free songs downloaded using P2P services. Anyone who thinks all that music has been dutifully ripped off CDs or bought legally is delusional. If the “pipeline” to free music disappears or shrinks will this make MP3 players less compelling? If this happens, will the iPod suddenly become yesterday's story? I'm willing to bet Apple will attempt to downplay this scenario as far-fetched while talking up the success of iTunes. Maybe the legal downloading music business will receive a much-needed boost from the court decision. I suspect it may cause some people to think twice about using a P2P service. Then again, the concept of music for free is still very much alive and well - especially within the key 15 to 24 year-old demographic - if you look at the number of users and songs available on Kazaa, Limewire, BitTorrent, et al. You may be able to wound the P2P beast but killing it is going to be extremely difficult - even with highest court in the U.S. weighing in.
Addendum: Michael Geist, who has become a go-to P2P legal expert, believes the court ruling has no impact on P2P users because there are already laws that address downloading. Instead, he said the decision makes it clear P2P service providers are now legally vulnerable. For people still intent on downloading, the challenge may be finding a service if Grokster, Limewire, etc. decide it's not worth the legal hassle. Then again, I'm sure someone could easily set up a P2P service in a country not adhering to WIPO, and snub their nose at the U.S. Supreme Court.

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Ethnic Marketing of Telecom Services

In-Stat has a report suggesting carriers are taking a more aggressive marketing approach to ethnic groups. The company cites Qwest's low-cost LD calling plans for Mexico, and Sprint's launch of Movida Communications, which also targets the large Hispanic community. The report is intriguing as carriers try to penetrate new niches while protecting their existing customer base from cablecos. I'm a firm believer VOIP is the ideal service to be sold into ethnic and special interest groups. This can be done by large service providers such as Vonage or Cablevision, as well as small niche players looking to establish a viable and profitable market foothold. The big challenge facing large companies is ethnic marketing requires particular focus and may not be worth it if the audience isn't big enough. This, in theory, leaves room for small and nimble rivals to jump into unserved or under-served markets.

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D-Link Woes

I don't usually use this forum to complain about technology but I have little choice after two weeks of frustration trying to get a D-Link range expander to work with my wireless network. They sell the product as essentially plug n' play. You take it out of the box, go to a Web site to configure it, and it is supposed to work. Well, it didn't work despite many calls to customer service. I even purchased a new wireless router after a second D-Link customer rep happened to mention my existing D-Link router was not compatible. (Strange, it didn't say anything about that on the range expander box). Finally, another customer rep suggested the expander was defective, and I should return it, which will likely take several weeks. Arghhh! There, that feels much better.

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Meriton Networks Raises US$54M

Ottawa-based Meriton Networks, which scored a huge coup last month when it won part of BT's US $19-billion next-generation network contract, has raised US$54 million in private equity. This the biggest VC deal done by a Canadian company this year. It also suggests VC money is starting flow back into the Canadian telecom sector in a big way. In April, Solace Systems, which develops multiservice message router technology provides intelligent routing of application traffic, raised some serious cash from a group of investors that includes Terry Matthews.
Meriton was originally targeting about US$30-million but strong demand from investors and growing interest in the metro-optical market persuaded Meriton that adopting a more aggressive approach was a better route. The company, which plans to double its workforce over the next 12 to 18 months, develops technology that helps carriers make their fiber-optic networks more efficient - a key issue as demand for broadband services increases traffic. Meriton's “secret sauce” is software that lets carrier tweak their networks from a central location rather than having to do a truck roll. This gives carriers more control while reducing costs. The BT deal was major breakthrough from Meriton, which had mostly done deals with second and third-tier carriers. The latest financing round was led by two new investors - VantagePoint and Nomura. If Nortel is looking to make a technology-related acquisition, it should loook close to home at Meriton. Nortel also plays in the metro optical market but Meriton clearly ha something carriers want. Two key questions, however, are whether Nortel has the cash and the strategic appetite to get into the acquisition of start-ups again given its terrible track record during the telecom boom.

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Nortel's Woes: Pissed off Investors/Employees

If you a chance, read James Bagnell's story on the two Nortel investors who have played key roles in the submission of 11 proposals to be considered at Nortel 2003 and 2004 AGM's this week. Sucha Mann and Dr. Edward Napke have apparently touched a nerve to the point that four senior Nortel executives, including CFO Peter Currie, make the trek to Ottawa to sit down and hear what they have to say. Nortel has recommended shareholders vote against the proposals, which range from pushing back salaries to 1998 levels to rules that would restrict travel to economy class. Mann said his activism was inspired by Robert Verdun who was onto Nortel's accounting troubles long before they became a major scandal. For more on Nortel's AGMs, which take place Wednesday in suburban Toronto (far away from the analysts on Bay St. and close the airport so all the U.S. senior executives can easily fly and fly out), check out my story in Monday's Financial Post.

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