Move Networks is streaming the programming for ABC. They are testing but not yet using P2P technologies. Also, a calculation of costs for Comcast node splitting I made did not account for additional nodes that might have to be split after the first year. By then, DOCSIS 3.0 should be in place and a much better obvious solution.
Quotes
"We must continue to reduce our staff by five to seven per cent a year, as we have already been doing for quite a number of years." —TDC Denmark
Briefs
Christian Wolff at Infineon may be smiling these days. Rumors abound Infineon won the chip contract for the 3G iPhone, coming soon.
Deutsche Telekom is an immensely capable outfit but has many attitudes unchanged since monopoly days. They just requested that Engadget Mobile, a popular and respected blog, remove the color magenta from their logo. DT claims they have "trademark protection for the use of this color." The ridiculous letter from their lawyer is here. More on Google.
U.S. Wireless prices are mostly up, so it's time for Martin and others to stop saying they are going down. Dave Barden at B of A writes, "Comparing Y/Y data, excluding the impact of the Unlimited plans on the largest legacy bucket minute plans, pricing remained flat to up Y/Y among national carriers. ... Assuming new Unlimited plans attract users averaging 2,500 anytime minutes per month, average minute pricing is actually up 8.5 percent Y/Y. Incorporating new unlimited plans into our analysis presents challenges to comparing pricing vs. legacy large minute bucket pricing. ... Assuming new Unlimited plans are a direct replacement for legacy large bucket plans, industry average minute pricing is down 4 percent Y/Y.... Less than 2 percent of the market can actually save money as a result of Unlimited plan availability, but family plan churn will fall and upselling is emerging. Verizon has noted gross adds at $100 and over have tripled since the Unlimited plan introduction."
Chunghwa in Taiwan has complied with a government order and reduced line fees from 5 percent to 18 percent. Interesting to note they have a fee for low income customers that amounts to about $6 per month.
Verizon is continuing to invest in their backhaul network. Sam Greenholtz reports they are planning, "10 broadband (optical) cross-connects per quarter going forward in its domestic network." Depending on the model, that should be enough to handle all the net traffic of several million FIOS customers.
For the record: I'm speaking at the Wisconsin State Telecommunications Association 2008 Annual Convention next month, and hope to see you there. They are paying my expenses and a moderate fee.
Press
John Batelle's Searchblog has a policy of posting unedited a statement from anyone he discussed on his blog or in his book. Sounds like a good idea to me, and I'll try the same, with one caveat: the comment shouldn't be more than twice the length of the original reference.
Total Telecom has some of the world's most up to date telecom reporting. Despite a small staff, they typically enterprise many unique stories every week. You can now confirm that for yourself, as they have decided to make 7 days of news available with free registration.
Om Malik on his blog asked, "any readers who are experts in satellite communications, and want to read the report, we would love to hear from you and what you make of this whole issue." This is one of the differences between online and print reporters. The style of the web is collaborative, and reporters freely ask readers for help. The WSJ and NY Times typically don't. This is dumb; DSL Prime readers again and again have helped me with the information I'm looking for. That's one reason I often list the stories I'm looking at; information welcome, privacy protected.
Brian Santo pulled no punches when two Sprint board members resigned. "The departures delighted analysts, who are looking to purge everyone involved with Sprint's 2005 acquisition of Nextel for about $35 billion."
People
Al Gore appeared with Cisco CEO John Chambers showing off their teleprescence gear and discussing climate change. This is a remarkable turnaround for Chambers, personally one of the most right wing of CEOs. A decade ago, Chambers refused to meet with Gore, the sitting Vice-President, according to a well-informed source. He didn't want to give Gore potential credibility in technology circles.
Nicholas Sarkozy's brother Oliver just took a multimillion dollar job with Carlyle. Carlyle afterwards paid a billion euro for 37 percent of troubled French cableco Numericable. Numericable has just applied for France's fourth wireless license. It could cost the French public billions if they pry the franchise away from the low cost leader.
Jaynie Studenmund has Microsoft's endorsement for the board of Yahoo, pending a takeover. She also has been nominated for the board of CNET by dissident shareholders. She has a business career with short but senior stints at Fannie Mae and several net companies. The most controversial was eHarmony, where she only lasted two months although she remained on the Board. eHarmony is often criticized for prejudice.
Vindu Goel is leaving the San Jose Merc to become deputy technology editor here at the NY Times. A mountain climber, he didn't hesitate to blog his opinions about cutting down California's redwood forests. He used his Vindu's Voice blog to allow readers, "to influence the official position of the Mercury News BEFORE an editorial gets written. I'll discuss ideas that we're still kicking around and ask you to give us your input." His journalism fits the web style of a conversation with readers and he posts his e-mail. One of his last Vindu's View posts included a very useful address, an e-mail for Comcast's head of customer service.
Craig Matsumoto visited the old TI interoperability labs, where Agnes Toan snapped a picture of one of the early DSL modems, a single board computer from Amati. Amati was taken over by TI, whose DSL operations were recently sold to Infineon. Imran Hajimusa looks forward to using TI's interoperability lab, probably the world's largest with racks and racks of DSLAMs. Picture here.
Wall Street
Kohlberg Kravis Roberts, the pioneering private equity house, failed to raise the $18 billion target for their latest fund, and have closed slightly below that figure. Private equity is about leverage, and that strategy is collapsing. James Greene at KKR leads their telecom investments, including Avago Technologies, Intermedia Communications, NuVox (NewSouth Communications). AT TDC Denmark, they have eliminated the R&D structure. Their largest deal was Reynolds Tobacco, which provides perspectives on their ethics. They are the Barbarians at the Gate.
Interesting how Wall Street's current obsession with buybacks, dividends, and cashflow affects real world investment and policy. The best analysts know this has gone too far, forcing companies to cut too much to keep the Street happy. But the same analysts believe their job is to predict stock moves, not search for underlying value. As long as the market is following this particular crowd madness, picking winners requires going with the flow. This bubble will one day burst. Balance sheets will matter, and so will long term prospects. Be careful to not to reverse your strategy too late.
The price of Bell Canada implies the Street thinks the deal won't close, quite plausible in these times. As I've looked at Bell decisions for the last two or three years, and they have underinvested and overpriced. That raises short run profits, but doing better needs to be part of the Ontario Teachers plans for the future. They would be fooling themselves if they projected based on the last two years alone.
Motorola is splitting the company in half because Carl Icahn and some on Wall Street think that will "add to shareholder value." Why should it? What is the magic that makes a $20 billion company more profitable if split into two $10 billion companies? Mark Sue of RBC was to the point, writing, "We're not convinced splitting the organization ultimately enhances the shareholder." He lowered his price target. Mergers and splits create huge investment banking fees, newspapers get stories, and arbs may make money on the deal. The shareholder payoff is less obvious. Scott Moritz at Fortune had the best headline, Motorola: It's the phones, suggesting that shift deck chairs is not the solution.
Good to notice that Conexant was up 15.56 percent one day.
The price of Sprint is now so much lower than the other U.S. wireless networks that someone should buy it. The enterprise value may be less than the value of the spectrum alone.
Copyright 2008 Dave Burstein.
The DSL Prime Newsletter is reprinted with permission.
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