February 2006
volume x, number 2
telecomdb.com

Headlines

-Two Major Wireless Companies Set Records

-Verizon Business Introduces New Offerings

-BellSouth and Birch Telecom Sign Agreement

-Apple and the Mobile Market

-Tello - New Ideas - Veteran Backers

-CallVision Becomes VeriSign Subsidiary

-Michigan Governor Seeks Criminal Laws for Unauthorized Sale of Phone Records

-New Telecom Bill Recommends Five Percent Flat Tax

-Indiana Telecom Law Gets Proposed Overhaul

 

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Two Major Wireless Companies Set Records


Wireless carriers have invested billions in wireless convergence to bring convenience and an endless array of choices to customers. What started as a luxury of taking calls without being tied to a landline is now practically a necessity that puts music and video at our fingertips and soon may even be able to track our kids. Record fourth quarter subscriber numbers from two major wireless carriers indicate those investments are getting subscribers' attention.

Cingular Wireless, the largest wireless carrier in the United States, claimed a record 1.8 million net subscribers in the fourth quarter of 2005, more than doubling the number reported in the third quarter. The company ended the year with 54.1 million subscribers, about five million more than it had at the end of 2004. More than 800 high-end enterprise service contracts were reported in the quarter. And, the company dropped its churn rate by 23 percent this year from last year, the highest reduction among carriers, (www.techweb.com/wire/ebiz/174403064) turning out its best ever 2.1 percent for overall churn.

Verizon Wireless reported a record 2 million net subscribers, up 20.5 percent from its 2004 fourth quarter. The company ended the year with 51.3 million total customers, up 17.2 percent from 2004 and a record-low quarterly churn of 1.2 percent and 1.3 percent for the year.

For the first-time ever, US businesses of all sizes will spend more on wireless voice services than on wireline according to a report by In-Stat.  This would mark an important milestone in the telecom industry.  "The transformation of telecom spending continues unabated," says Bryan Van Dussen, In-Stat analyst.  "The relentless march toward IP-based networks, the unequivocal adoption of mobile solutions, and the pervasiveness of broadband have changed the face of business networks forever."

Mid-sized firms accounted for 12.4% or $24 billion of total US business telecom spending in 2005 and are expected to reach $33 billion by 2009.  Small business spending on Internet access was $4.4 billion in 2005 and forecast to grow to $8.2 billion by 2009.

 

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Verizon Business Introduces New Offerings
Verizon Business recently unveiled new integrated wireless and wireline offerings.  The new offerings combine the power of the Verizon Business IP network with the Verizon Wireless network. 
 

The Enterprise Mobility solutions suite, based on the former MCI remote access suite, enables business and government customers to utilize Verizon Wireless' Broadband service throughout 181 major US metropolitan areas.  Verizon Business customers are able to connect to company networks without the use of a phone jack, modem or designated hotspot.  Customers insert the Wireless Broadband Access/National Access PC card into their laptop and via the Enterprise Mobility platform are assured end-to-end security protection for corporate data.

Verizon is also offering broadband wireless access for business continuity and disaster recovery with its IP VPN Broadband and Secure Gateway -- Retail & Remote Office Wireless Backup Services. The Verizon Wireless network incorporates extensive redundancies and backup systems providing customers with additional protection against last mile-related outages by bypassing local landline facilities. The Secure Gateway Services allow customers to securely connect private and public IP networks ensuring delivery of customer traffic from origination to termination. With broadband wireless backup options, customers can leverage a wireless approach to business continuity should their primary landline connection become unavailable.

The Enterprise Mobility suite is currently available to Verizon Business customers while the new backup solutions are expected to debut in February 2006.

 

BellSouth and Birch Telecom Sign Agreement
BellSouth recently signed a long-term commercial agreement with Birch Telecom for the provisioning of wholesale local phone services throughout BellSouth's nine-state region.  BellSouth has successfully completed 28 long-term commercial agreements with its wholesale customers.

"The new BellSouth-Birch agreement is a major milestone for the future of the telecommunications industry", said Rex Adams, president of BellSouth Interconnection Services.  "Entering into an agreement with a major national telecom provider the likes of Birch Telecom demonstrates the significant progress we as an industry are making toward building market-based relationships."

Mike Cassity, Birch president and CEO said, "We are excited about completing negotiations with BellSouth and strengthening our future in the Southeast. This agreement further exemplifies Birch's long-term commitment to its customers and the delivery of world-class customer service to small and medium-sized businesses throughout the region."

 

Apple and the Mobile Market
Apple Computer's (AAPL:Nasdaq) recent trademark applications have fueled speculation that the company will launch its own mobile phone, or perhaps even its own mobile phone service. In January, the company filed a series of applications to trademark the phrase "Mobile Me" to encompass the sending and receiving of  "data, images, audio, video and documents...over local or global communications networks."

While Apple has made no comment on its plans, the American Technology Research analysts Shaw Wu and Albert Lin have offered their thoughts. "We believe this is further indication of AAPL's strategic direction to extend its iPod + iTunes and Mac franchises into new business areas including smart phones, value-added mobile content services, and the broader consumer electronics space."

The trademark applications disclose little information as to whether or not Apple will enter the mobile market; but they do mention mobile phone service and the ability to download music over mobile phone networks.  However, Wu and Lin say, "We believe 'Mobile Me' could also be related to location profiles that could be stored in dongle-type keychain devices or perhaps a future iPod or cell phone that would carry user profiles, including bookmarks, cookies and preferences that would allow people to carry their personalized computing experience wherever they go. We believe this information could be transferred through USB and/or Bluetooth to the host client."

To learn more on Apple entering the mobile market please read "Apple Goin' Mobile?" By Troy Wolverton at  http://www.thestreet.com/_email/tech/gamesandgadgets/10261641.html

 

Tello - New Ideas - Veteran Backers
On January 23, Tello Corporation officially launched a software and service bundle designed to connect business users regardless of their location or connection.  By combining wired, wireless and VoIP phones with handhelds and instant messaging services, the new products will enable users to consolidate the multiple platforms they use to communicate and connect multiple contacts by selecting icons on a toolbar. The system also monitors whether the other party is available on the phone, email, IM, or in cell range.

The communications package will be offered in two versions: Tello Basic, for individuals, and Tello Enterprise, designed for businesses.  Tello Basic is a free service that allows users to create contact lists and then connect with others also on the service, sending instant messages across different networks.  Tello Enterprise is designed to assist businesses in connecting partners' and customers' internal and external IM systems, voice networks and collaboration software. 

Windows PCs and RIM Blackberrys are serviced by Tello Connect.  Tello Connect works as a mediator for different communications networks and provides the ability for users to contact each other despite subscribing to different services.

The company founders combine high profile veterans of the telecom and computer industries.  Jeff Pulver, Pulver.com founder and Vonage Co-Founder, John Scully, former CEO of Apple and Pepsi, Craig McCaw, cellular pioneer who founded the company that later became AT&T Wireless, and Michael Price, telecom investment banker whose worked on deals such as the sale of  AT&T Wireless to Cingular and  the sale of AT&T's remaining business to former SBC. The company's Chief Executive, Doug Renert, spent eight years at Oracle and was Vice President of Applications Development.

 

CallVision Becomes VeriSign Subsidiary
VeriSign announced an agreement has been made to purchase CallVision, a leading provider of online analysis applications, for $30 million. This purchase will enable Verisign to assist its clients by simplifying their billing process, reducing operational costs and increasing customer retention.

It is expected that VeriSign will integrate the applications from CallVision with its Commerce Suite, which offers payment and billing services for wireless and wireline carriers. CallVision clients such as T-Mobile, Bell Canada, TelstraClear and AAPT (Australia) use its applications to transform billing data into vital sources of business intelligence to increase satisfaction and retention. This is done by consolidating billing data from multiple systems, products, geographies, languages and currencies into a single electronic analysis and bill payment view and creating one view of multiple accounts. The company distributes and markets its services through direct sales and channel partners such as global system integrators and major BSS/OSS vendors.

"By developing highly regarded customer self-care and consolidated e-billing and analysis applications for Tier 1 and global carriers, CallVision has realized solid growth and established itself as a world-class provider of customer-centric solutions. We are pleased to be joining VeriSign to help one of the industry's most trusted brands deliver new services to a broader, diversified audience," said Derek Edwards, CEO of CallVision.

The deal is set to close by April 1, 2006.

 

Michigan Governor Seeks Criminal Laws for Unauthorized Sale of Phone Records
Michigan Governor, Jennifer Granholm, wants new criminal laws passed prohibiting the unauthorized sale or release of telephone records and other personal information by telecommunications service providers and information brokers.  In addition to her request to the legislature she asked the PUC to investigate whether providers in Michigan have permitted the release of telephone records and how records are being obtained for sale on the Internet.

Granholm is not the only one concerned with the sale and release of phone records.  In early January the FCC and several state attorneys general called for action against the selling of private records and have initiated investigations into several websites offering to sell phone records for around $100.  The Electronic Privacy Information Center has filed a list of 40 websites that offer phone records for sale with the FCC.

"Unauthorized use of phone records violates a person's privacy and creates serious threats to public safety," Granholm said. "The state of Michigan must send a clear message that the private, personal information of Michigan consumers is not a commodity and is not for sale."

Granholm's proposal would:

  • prohibit a telecommunications service provider from releasing or selling customer information without the consent of the customer;

  • make it a crime to obtain customer information from a telecommunications service provider by providing false information or false pretenses;

  • criminalize the unauthorized sale or release by brokers of telecommunications service account records, identifying information, or personal data relating to Michigan residents or businesses; and

  • require telecommunications service providers to maintain appropriate measures to safeguard consumer privacy and notify consumers of any security breaches or unauthorized release of information.

The proposal has been submitted to the Michigan Legislative Service Bureau for review.

 

 

 

New Telecom Bill Recommends Five Percent Flat Tax
Proposed legislation in Virginia recommends replacing a myriad of state and local telecommunications taxes with a 5% flat levy.  The bill would apply the uniform flat tax to local and long distance phone service as well as wireless communications, and cable service.  In addition, the levy would also be applied to services like satellite television and radio, and VoIP, which currently are not subject to taxing. 

The state would collect the taxed funds and then reimburse the cities and counties for their shares of revenue -- about $425 million -- lost by the elimination of the local taxes. 

Customers would see a reduction in taxes on landline and wireless phone services in most Roanoke and New River valley localities, according to data collected by the Virginia Telecommunications Industry Association.  However, satellite television subscribers in these areas would see a slight increase in their overall tax bill if the levy were passed into law.

There is some opposition on the bill from several rural legislators concerned that their satellite subscribing constituents would bare the burden, and especially from the satellite TV industry, but for the most part it has passed preliminary voting with flying colors.  A final vote on the bill is expected shortly.

 

 

Indiana Telecom Law Gets Proposed Overhaul
In early January, State Senator Brandt Hershman proposed sweeping reform for the Indiana telecommunications bill, which has not been updated since the 80's.  "Indiana's telecommunications laws were last updated in 1985, when a Blackberry was just a fruit and Google was just a very large number," Hershman said. "It's time to modify our laws so that the free market can drive down prices for consumers."

The proposal for reform includes sections borrowed from legislative actions in other states and consists of eight major components including pricing flexibility, infrastructure incentives and franchising. If the bill is accepted it is estimated that it will create 20,000 jobs and $7 billion in new spending for the state, as well as an increase in tax revenue. 

To learn more about Indiana's Proposed Telecom Reform please visit Senator Brandt Hershman website at http://www.in.gov/s7/newsroom.html or Inside Indiana Business with Gerry Dick at http://www.insideindianabusiness.com

 

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Contact Kim Russo now to learn more about important features for wireless providers and call accounting firms that can improve revenue and reduce costs at krusso@telecomdb.com or 800-433-6181.

 

 

 

 

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