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Cisco vs. The Nuns

At a time when corporate governance is in the spotlight, you have to love the efforts of the Sisters of the Holy Names of Jesus and Mary, who want Cisco Systems' to reviews its executive compensation policy. The Sisters, who own 10,000 Cisco shares and had their proposal turned down last year, want Cisco to produce a report by January 1 that evaluates whether its executive pay should be modified. They also want an explanation as to whether layoffs or the level of pay of the lowest paid workers should cause any adjustment to executive pay. The proposal comes at a time when Cisco CEO John Chambers received a raise to US$350,000 from US$1. Mind you, Chambers' modest salary (pre-raise) didn't mean he was forced to look for loose change under the cushions when you look at his healthy stock option package.

Vonage Wants Street Cred

In an attempt to drive deeper into the consumer market, Vonage is holding a press conference tomorrow with Intrado and the State of Rhode Island to talk about E911 service. Now, I'm not sure how much clout Intrado and Rhode Island sport in the world of telecom, but you can't blame Vonage for trying to get over the 911 hurdle. For whatever reason, consumers get hung up (no pun intended) on VOIP about two issues: 911 and back-up power. Vonage and other service providers are trying to tackle the concerns about 911 by unveiling new technology, so that should fade into the background soon. As for back-up power, I'm sure it will be dealt with as well in the near future. In some respects, consumer reluctance about VOIP reminds me about how many consumers were cautious, if not opposed, about using their credit cards to make e-commerce purchases a few years ago. Today, no one thinks twice about it. Give Vonage credit for making some noise about 911 service – it's a smarter message than yet another price reduction.

Bell's VDSL Threat to Rogers?

It looks like the folks at UBS Warburg don't think that much of Bell Canada's VDSL push into the apartment building and condo market in Toronto. In a new research report, UBS estimates that Rogers will lose just 6,000 customers to Bell by the end of this year, and only 76,000 by 2010. That represents 0.3% of Rogers' 570,000 multi-unit dwelling, or MDU, customers this year, and 3.4% in 2010. With all the talk about convergence and the triple-threat battle between carriers and cable companies, UBS' forecasts for the Rogers-Bell tete-a-tete are surprisingly modest. It will be interesting to see how UBS and other analysts look at Rogers' push into Internet telephony, which is slated to happen some time next year. Don't be surprised to see Rogers enters into an agreement with Allstream Inc./Manitoba Telecom to give its Internet telephony plans some momentum.

China's Telecom Market

CIBC World Markets analyst Steve Kamman got some insight into China's telecom market after meeting with Jia-Bin Duh, the head of Cisco China. Apparently, Cisco's feeling pretty bullish about China and looking for faster-than-market growth. Mind you, Nortel Networks was looking to surpass the market's growth earlier this year – only to change its mind a couple months later. Duh also said Cisco sees “healthy local and foreign compeition”. Given all the talk recently about Chinese rivals such as Huawei Technologies, it would have been interesting to get some deeper perspective on the threat posed by Asian suppliers.

Telecom's Downward Spiral

I may be wrong but it seems increasingly apparent that the telecommunications industry is poised to go through another painful and destructive evolution. All the hype about Internet telephony – otherwise known as VOIP – has conveniently obscured the fact that prices for local and long-distance telephone service are crumbling at an alarming rate. For whatever reason, VOIP has been seen as the telecom sector's panacea but it could be its Waterloo. While equipment makers such as Cisco Systems and Nortel Networks reap the benefits in the short-term, VOIP could be a disaster for carriers. Look at the high-profile price war between AT&T and Vonage. You lower your prices, then I'll lower mine. Pretty soon, everyone is playing chicken to see how low competitors are willing to go.
At the end of the day, consumers could be paying next to nothing for telephone service while carriers will be left wondering where all their revenue went. If things keep going in the same direction, major carriers in North America such as SBC, Bell Canada, Telus and Verizon could be reduced to nothing more than “big pipe” providers to Internet telephony providers. While the carriers will see their high-speed Internet businesses thrive, their core voice units could shrink dramatically. Of course, the carriers will probably tell you they will do well by offering value-added IP services to residential and corporate customers. But how much money will they make from these services? Probably less than they envision.
Earlier this week, the National Post ran a story about how mutual fund manager Richard Howson had sold his BCE Inc. shares due to concerns that VOIP will have a major impact on Bell's domestic telephone business. While Howson boughtTelus shares because of its strong wireless profile, it has to be troubling when a large investor decides to shy away from a large carrier because of VOIP's growth.
Perhaps the biggest threat to the telecom industry could be the growing army of Internet telephony cheerleaders (analysts, conference organizers, equipment vendors, etc.) who would have everyone believe VOIP will bring telecom back to its glory days. I would argue it will be great for consumers, who will have easier access to dozens of IP services, but terrible for carriers.

Confessions of an Internet Junkie

As almost four months of parental leave come to a bittersweet end, it is probably time to come clean about something quite troubling: I'm an Internet junkie.
It has been obvious for years that something was terribly wrong. The symptoms included checking several e-mail accounts before showering in the morning; taking my BlackBerry to the gym; and looking longingly at Internet cafes while on vacation.
Then, my parental leave started where, in theory, I would be totally focused on the needs of my two daughters. Instead of interviewing high-tech CEOs, it would be arts and crafts, visits to the park, and long, slow walks to the library and perhaps Starbucks.
Most of this stuff happened but I also spent a lot of quality time — and probably, quantity — on the Internet. In my defence, I would argue the Internet offered a much-needed intellectual outlet.
When you spend all day at home with children, you need something more exciting and stimulating than Dora the Explorer and changing yet another diaper.
As for what I was doing on the Internet, there was, of course, e-mail to keep in touch with friends and family. Sad as it is to admit, this included work e-mail to avoid coming back to a mountain of unread correspondence.
Then, there was my new and obsessive love for eBay. For years, I have written about the company's stock performance and strategy but I had never become part of the eBay nation. For anyone who likes the Internet and shopping, the fun never ends.
Whenever I had some free time — young children tend to take naps if you're lucky — I was happily buying and selling. Running shoes, cordless phones, rolling pins, books, CDs. If I need to buy or sell it, eBay is there to help me.
A key part of my parental leave “deal” with my wife, Pamela, was that I agreed to make sure the children were clean and happy at the end of the day, and to have dinner ready. We have been married six years and, until this summer, she has happily done most of the cooking, which is not a bad thing given my culinary skills.
Faced with the daunting challenge of making something healthier than Kraft Dinner and Shake N' Bake, I naturally turned to my friend and constant companion, the Internet. In no time, I had bookmarked Epicurious.com, Cooking.com and Jamieoliver.com for much-needed advice.
Mind you, there is absolutely no possibility I will become a Susur Lee or, for that matter, a Sara Lee, but my cooking ain't too bad.
When you're cooking, you need music for inspiration. Unfortunately, commercial radio is awful — making the case for satellite radio even more compelling.
Thankfully, there is the Internet where you can find thousands of streaming radio stations that meet all kinds of tastes. In particular, I listen to Yahoo's Launch.com.
While my wife has been very content with my parental duties, the Achilles heel has been the Internet. There is little doubt she would be happier with a Web-free house — a stance that threatens to make her as a Luddite.
(In the early 1800s, Luddites were a group of English workers who protested against the changes produced by the Industrial Revolution, and often destroyed machinery.)
That said, I was delighted to discover recently I am not alone in my fascination with the Internet. According to a study done by Yahoo! Inc. and research firm OMD, people who went without the Internet experienced withdrawal symptoms within two weeks.
For these people, the Internet has become “the ultimate symbol of modernity to the point that study participants feel hobbled without access to routine information like maps and telephone numbers”.
Another survey by Conifer Research found that one-half its 28 participants suggested they could not go without the Internet for more than two weeks, while the average time respondents could go without being online is five days.
These studies cheerfully suggest I'm far from alone. In fact, there are millions of people out there just like me who refuse to hit the “disconnect” button. Of course, I could give up the Internet — as well as cable television and beer — cold turkey in a heartbeat.
Now, let me tell you about my fascination with the BlackBerry and my Web blog and how you can do all your banking online and pay your bills and order tickets and … … …