Digital Britan stumbles at first fence

The UK Governments attempts to breath some life into the countries pretty puny broadband infrastructure looks likely to fall at the first fence as new Digital Britain supremo Stephen Timms looks ready to drop the £6 a year tax" on fixed lines. Timid Timms isn't alone in chickening out of backing a project that would extend highspeed broadband down every village, and rurual community in the country, as the conservatives also worry about voter backlash.

Power of the Pipes

The folks at E&Y have delivered a very good report "The Power of the Pipe" which tells the wider world what we in the industry have known for years - i.e. the companies that own the infrastructure are better long term value than networkless AltNet operators. The UK operation of C&W got a lot of pipes when they brought THUS...

Anyway, pop over to Telecom TV and watch Power of the Pipes Video

The report can be ordered via: GlobalTelecommunicationsCenter@uk.ey.com

In the USA and other countries where the incumbent PTTs have been able to cling to power they will be able to leverage their infrastructure to deliver intelligent value added applications. In the UK pressure from the regulators is likely to handycap BT. This is because after pressure from OFCOM BT Group has spun out ownership of the infrastructure to BT Openreach, BTs services businesses now have to buy dumb pipes at the same price as their AltNet competitors, which might be good for competition but is yet another kick in the teeth for BTs services businesses.

Matt Bross to leave BT - Big Bear heads home

BT's CTO and CEO of Ignite is to leave BT at the end of July to return to the US and follow other interests. Bross is a popular figure around the industry and is one of those rare things these days - a tech' enthusiast, a champion of the 21CN and more importantantly someone at the heart of BT who is known to have wanted to build bridges, both with BTs peers and other 'new technology' companies. Rumour is that Bross has been increasingly unhappy with the lack of investment in innovation since Verwaayen departed, and the accountants have taken over.

That whole scenario reminds me of the last time BT lost a great CTO, Peter Cochrane; an engineer to his soul and evangelical about the coming explosion in communications, left in 2000. Many felt Peter was sidelined by the Valance/King/Bonfield team as they crashed a previously majestic BT into a pile of debt and confusion. The £30bn($50bn) debt mountain resulted in BT having to sell off assets including BT Cellnet (now O2) and the resulting restructures set the scene for the collapse of Global Services in 2008.

Bross' departure is loss to BT not because he was a great business driver, but because of what he represents; BT has a big old hill to climb as it tries to reposition itself from a traditional telecoms company to a provider of converged networked services, it needs people like Bross to stand up the front and shout "We believe!!!" If BT truly believe, their customers will believe as well.

Industries need their cheer leaders and I'm sure Bross, like Cochrane, will continue to entertain and inform us for years to come it's just a shame BT lets these guys go just when they needed them the most.

CW to spin-out DEMON Internet

In acquiring THUS, CW got it's hands on a mighty NextGEN network, major MPLS infrastructure and associated high value customer-base, datacentres, a sticky product set, skilled engineering team etc. Essential elements in taking on BT & Verizon in the modern enterprise.

As with any house sale they also got some bits they don't want; where as most of us would have put those on eBay or dropped them off at the tip - reports are coming in that CW management have appointed Rothchild to help them clear out the cupboards. Which almost certainly means Broadband ISP Demon Internet is up for sale. Suggestions of a £75-£80m asking are being floated - a nice 'find' as the daytime presenters would say.

But if history is anything to go by I expect CW to find a lot more value than just the sale price. Those of you with half decent memory will remember Bulldog the CW subsidiary voted as 'Britains worst broadband provider'. After Pluthero and the Energisers got hold of it they sold off Bulldogs customers in a deal that ensured the acquiring company had to lease network from CW in order to serve them.

So, I expect more of the same. Double's all round!

Rackspace Customers in Bristol

We have been improving the mapping in our Market Intelligence product. Here's a screenshot showing a selection of Rackspace customers in the Gloucester area.
In the software you can drill down and see details on both the customer and the services they buy.

CW Wins £207m National Grid Deal

While BT Global Services is finding it increasingly hard to win major corporate business, CW continue to show that if your focus is outbound, nimble and forward looking  there is still plenty of major projects still out there to be had.  

Hot on the heals of several recent major bid wins; CW today announced that they have been awarded a £207m,  15 year deal to run National Grids core telecommunications infrastructure.  As well as taking over operational management of the existing network CW will undertake design & build the National Grids new NGN based system for the control of electricity distribution.

It's not so long ago that CWs mould breaking (mangling, more like) CEO John Pluthero was being lambasted by all comers for radically downsizing and reorganising the UKs oldest telco, and sending it off on a more energetic modernising agenda - but he has been proved right.  Can BT follow suit? given the size of the problem and economic climate it will be more difficult than if they had done it 3-4 years ago when it really needed addressing.

I've visited the sales floors of both companies lately and whilst one has an air of nervous tension where quarterly job appraisals and voluntary redundancy are the main topic of water-cooler conversation, the other is vibrant, directed and full of people with a sense of purpose.   

And yes, I do know CW are still cutting staff.

BT Global Services to be broken up

BT is restructuring its struggling Global Services business to focus on three separate areas after its "unacceptable performance" led to the group losing more than £1.3bn.

BT Global Services recorded an operating loss of £134m. It lost £1.2bn due to cost overruns on big contracts with the NHS and Reuters and another £100m on other smaller contracts.

read Karl Flinders Original article...

 

Further BT Job Cuts 15,000, this year and more in 2010

Things continue to look gloomy for BT. This mornings announcement seems to have been a bigger surprise than had been expected.

BT suffered a 40% slump in pre-tax profit during the fourth quarter, forcing the firm to slash its dividend and announce plans to axe another 15,000 jobs. Fourth quarter pre-tax profit plunged to £429m from £714m a year ago and by 21% for the full year to £2.08bn.

The firm also reminded us that it had cut 15,000 posts in the last 12 months, 5,000 more than they said they would. This morning they joined Banks & Miners amongst the FTSE's largest fallers.

BT's stated aim is to cut the jobs through natural wastage, non replacement and voluntary redundancy and had no plans for compulsory lay-offs. With some suggestion that it'll be even more agency staff going.

Next Generation Communications platforms, Ethernet-based solutions, unified communications applications, and International Private Leased Circuit (IPLC) are key are to BTs ability to compete at home and abroad. BT cannot afford to fall behind the innovation curve

It seems to me that the right thing to do no matter how painful is to follow C&Ws lead - look at the skills they absolutely must have in their company and organise their people accordingly.

Abovenet Customer Distribution

Following on from my earlier post today here is a nice article on fibre rings and whether the OK Government should invest directly in laying fibre. They mention US based Abovenet's success in the greater London Area after it invested in multi-gig' fibre in he late 90's. I thought I would have a quick look at 1,500 random Abovenet customers. See below...


And whilst they do have a good regional spread the investment has certainly paid off.

THUS Customerbase: Geographic Distribution

THUS Telecom (whose recent acquisition by C&W went almost un-noticed) were famous for having a strong base of customers in Scotland and the North-West. So here is a picture of our GUI showing their customers in London area plotted on a Google Map.

Nokia N97: Upsetting the Apple Cart.

Nokia have apparently upset a few of their carrier partners by shipping a native Skype client on the new N97 mobile computer, well what did they expect? that Nokia's flagship mobile communications platform was going to leave out a key communications component. People are finding a way to get VoIP on iPhone, I use Fring, it's great, I can chat to people in the message window and if I really need to I can speak/crackle at them free; great for me I have a software developer in Brisbane.

Operators cannot turn back the tide, or squeeze the Genie back into the bottle. Nokia are right to offer it because if they don;t they will lose share to someone who will. If service provider doesn;t want to carry the N95, it's a free country... But one of their competitors will, that's a free market...

I switched to iPhone because my old Communicator lacked features the N97 now has. Though Mac compatibility may remain an issue, I don;t know yet.

Commercially the service providers are right to resist, and try to limit the leakage of voice minutes; they have shareholders and jobs to protect. But, in the longer term they must find a model that accommodates all aspects of ubiquitous and free Wireless Internet.

Maybe it's to charge a small fee for providing high quality long-distance backhaul for mobile VoIP users. Now, I'd pay for that.

Rain Cloud Computing

Having spent a long time in the business of information security I always get nervous when people talk about shared services; having seen poorly configured 'shared' firewalls allow one customer to find themselves on the intranet of another, sniffers installed on shared networks, and numerous less legitimate/benign activities.

The problems usually stem from programmatic errors, logic breakdowns, or misinterpretation of specifications by developers; this is likely to be the problem with Cloud computing for the next few years; it almost certainly what caused the problems experienced recently with GoogleApps.

Should this put you off Cloud computing? Probably not 10 years ago we had all the same problems with websites. It takes a while to learn how this new stuff works.

Cisco the latest to announce Dis-employments

The reduction in the build out of new networking infrastructure has led the worlds leading provider of telecommunications hardware,Cisco, to sort of announce a round of redundancies. Around 2,000 staff are to be "restructured out of employment" from the global workforce of about 70,000.

A great company, but perhaps as Scott Adams observes, one that could afford to thin the ranks just a little.

An iPhone Accessory that won;t sell anywhere it snows

I was pleased to see another clean tech (or electric) vehicle manufacturer loving the iPhone it's there in the interior shots just like the Chrysler Peapod. The oddly cute Aptera 2e looks like a Cessna with the wings lopped off and is due to ship later this year, .Maybe, if I lived in Silicon valley I might buy one; except of course the roads there are jammed with big cars and giant trucks, and drivers on PCP.

Back in the 80's I got a lift to work in an ancient Morgan 3 wheeler which spent the entire trip going sideways. with the rear wheel hopping from rut to rut at random intervals.Morgan; No iPhone adaptor, No Wimax, Not great in the Snow... but likely to be around longer than the 2e.

Oh good grief: Digital Britain - Digital Donuts

Per the norm; Despite having been one of the most innovative nations in the introduction of Internet, the Worldwide Web, and Digital Media. Britain's politicians and business leaders still cannot get their 1980's brains around the online world.

Lord Carters main hopes seem to be that consumers will behave online, that BT will roll out broadband to their remaining exchanges a bit faster. That the BBC might get together a small team to look into this digital media stuff. No mention of investing in or supporting the British high tech business sector, or ISPs, or the computer games industry which makes more for UK Plc than the Film industry.

Top marks chaps, a few more kids able to download music and housewives able to order groceries... Yep, that'll see us through!

Banking Crisis: May force Governments to invest in Telco infrastructure

I spend a lot of time with Telcos, ISPs and equipment vendors in the UK and EMEA and their is a constant stream of; Headcount cuts, projects put off, scaled back, '08/'09 capex suspended and no clear visibility into this years budgets.

Problem, inability to raise debt to fund infrastructure. Banks won't/can't lend for all the reasons we hear in the press. Confidence in a banks is linked to their stock price & their market capitalisation, they can't value their assets properly and that effects the amount they can lend, blah, blah, blah... and, that impacts on their attitude towards lending money to Telco, which lost it's low-risk utility status many years ago.

I wondered how bad was it for Banking last year? Well take a look at this...
Not a pretty picture, but interesting.

I wonder how European many countries will follow President Obama down the Keynesian route of the US government investing directly in telecommunications infrastructure, the same way they invested in physical infrastructure in the 1930's. we heard today that the Canadian government will start a programme of investment this year. The question is whether the European governments have the guts to ignore EU rules and directly subsidise the telecoms industry in their home countries - I doubt it, but we live in hope.

A quick guide to the 4G

TelecomTV have done this great intro to 4G. Had my eyes reeling from the three letter acronyms (mostly 4, sometimes 5)

I tried to embed it here but for some reason the blogger app' keeps blocking it so just follow the link

Don't worry you have at least 3 yrs before the standards start to roll out, in which to learn all the acronyms.

BackChannel Website down - Victim of Tiscali vs 186k spat

Not quite Russia vs Ukraine - but rather like those poor freezing souls out in Bulgaria, Tiscali's disagreement over payments and legals, has resulted in a load of innocents disappearing off the Network again with zero notice, and yes that includes us at BackChannel.

186k has a long and troubled relation ship with Tiscali and they have issued this public notice saying that they are migrating to a BT based infrastructure. About time!!!

Nortel Networks Files For Chapter 11

More bad new as yet another major telco supplier bites the fiscal dust. Infrastructure equipment vendor Nortel Networks has today moved for Chapter 11 Protection.

Nortel Networks, which faces a $107 million bond interest payment this week, filed for Chapter 11 protection in U.S. liquidation Court in Wilmington, Del., dragged down by a sudden drop in demand for its formerly lucrative voice-only telecom network.

In 2000 Nortel was worth an estimated $250bn.

What more can you say, with Alcatel-Lucent in the deep sticky,. Nokia selling off non-core businesses, and as I type this rumours have just that Chinese "Cisco alike" Huawei may be intersted in buying Nortel , whilst Nortel is a nominally a Canadian company I can't see the American Government smiling on that one. Expect Cisco to enter the fray...

As Baltimore goes live, Sprint's Head of 4G talks WiMAX Strategy

Today Sprint's new subsidiary Clearwire went live with their first commercial WiMAX service in the US city of Baltimore, MD. As you know we're big fans of WiMAX here at BackChannel, so it is great to see the technology being rolled out in large metropolitan.

Sprint is the telco part of a consortium which includes Intel and Google that is making a total $12bn invest in WiMAX pioneers Clearwire.

In this podcast Sprint's Vice President of 4G / WiMAX Todd Rowley says that they expect the new service to cover most of the US by the end of 2010. It's a bit cheesy, but once you get past that there is some worthwhile news and views on a technology that will really impact the lives of mobile Internet users.

At the end of December Sprint launched the first Dual 3G/4G modem which will allow mobile users to flip to the new 4G services as they move into areas that are covered by the Clearwire Network. Should I wait a while before getting BT to send me that wireless broadband dongle?

Phorm Management leave sinking ship

Debate continues to rage about spyware vendor Phorm.

This week sees there management team run for the door with their hair on fire... Phorms indominatable CEO Hugo Drayton and CFO Lynne Millar both resigned this week, saying that it had all been very rewarding - I hope they meant in terms of pay, because I doubt it's done their careers any good.


Just last week Hugo Drayton recently put up this spirited defence of Phorm and it's business model. While talking to the folks at TelecomTV


It's about time for BT, Virgin, EasyNet et al, to follow Hugo and Lynne over the side of the boat; So folks, if you're listening, . Stop it now! It poisons everyone who goes near it. It's a PR disaster, even the people who work their know it

Also, stop trying to steal each others marketshares by cutting the prices it just leads to churn which is incredibly expensive let the little guys have the small price sensitive customers like my mum who uses it to shop at Tesco online and email recipes to her friends in the WI, and get back to selling people a good product that homeworkers, businesses and people who want streaming media; they will be prepared to pay a fair monthly fee.

Obamafication of the Internet: We will renew Information SuperHighway

In his weekly address to the US President Elect Barack Obama staed that it was unacceptable for the US to be ranked 15th out of 30 developed nations in the adoption of Broadband.

Your Weekly Address from the President-Elect @ Yahoo! Video

In his regular Saturday broadcast, Obama has promised that he would make the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s. A high-tech new deal if you like, though he does suggest that his administration will move to bring all schools and hospitals on line so that they can communicate and share data across the Internet; I can hear Richard Granger and his NHS National Program for IT team dusting off their CV's as I type. But seriously in a month when over 1/2 a million Americans were released form their jobs and a further 1/4 million contractors sent home the proposals to revitalise the economy by investing tax $ in infrastructure and training is a lead that other countries should be following, giving people who have been laid off the opportunity to earn, learn and contribute to the future of their nation, perhaps for a short while it might remind people that creation of real things is what carries civilisation forward; not, pretend trading in made up things that benefit the very few.

Sprint and Google show Wimax has legs with $3.2Bn Clearwire investment

Google, Comcast, Time Warner, Intel & Bright House have coughed up $3.2bn (about £2.1bn) and Sprint has 'donated' their country wide Wimax license to a new company Clearwire.

As a connectivity nut I've been waiting for this since I first saw Wimax demo'ed at Intel back in 2003, it was low powered and pretty ropey but it worked. How things have changed take a look at this Clearwire Demo 7mb up 3mb down when your driving around, ok it's a demo: then again a $3.2Bn investment in the middle of the worst recession in 70+ yrs, tells me that they're sure it's going to work.

The reality of a truely mobile wireless high speed "broadband" internet is interesting (exciting) enough, but when it finally becomes ubiquitous as it will, forget personal Internet access for a moment think of the huge array options for in car entertainment, roadsafety, traffic management; streaming audio, video, headup displays, location based services and advertsing etc... I for one can't wait to see what opportunities this will eventually deliver.

In the realm of personal communications you can shove a lot down 7mbs; most of us will no longer need land-lines for home broadband, or telephony; most former PTTs can wave goodbye to their cash cows. You can see why the mobile service providers who have been poo-poo'ing Wimax for years, and who spent all those billions in overhyped auctions are certain to keep the Andrex puppy in dog biscuits for the next few years.

Remember as late as 2000 BT and Co were denying DSL Broadband would ever be widely available and that ISDN, X-25 and Dial-up was here to stay.

AT&T Cut even more staff

After cutting 7,000 staff in October, Randall Stephenson CEO of AT&T (pictured) announced that another 12,000 are to go in 2009. The cuts represent 4% of the total workforce and is the largest single staff cut since the 1998 when it axed 15,000 in a bid to cut costs.

What is interesting is the difference in the cuts as a percentage of the overall headcount. In '98 AT&T had 130,000 staff and the redundancies in that round made up 12% of headcount. With the US economic situation far worse AT&T's current headcount at over 300,000 is likely to carry on shrinking.

Let's hope they don;t make the same mistake as BT did, and allow their top IP engineers to take the very generous redundancy option; leaving Global Services short handed and costing the CEO is job.

Don;t pay for 0870 to contact Government helplines: Robbed by the DVLA

I've come over all Martin Lewis today! I've just spent £3.50 on a 20 second conversation with the DVLA, @49p/min.

I wasn't aware that public service help lines had become a government profit centre; but apparently they are.

According to Hansard: The Driver and Vehicle Licensing Agency has received the following amounts from its use of revenue sharing phone numbers for each of the last five years.

		£
2007-08		3,381,649
2006-07		2,894,284
2005-06		2,423,517
2004-05		1,945,131
2003-04		874,965

What a great scam! Apparently premium rate numbers were introduced in 1999 to "Not there to raise money but to flatten out discrepancies in the amount paid to call Swansea from different parts of the UK"

Well as a reader of On the BackChannel I'd like to introduce you to SayNoto0870 and if you ever need to phone DVLA here is the number you should call to get around the rip off 01792 782341.

BSkyB to raise $600m bond to pay for Tiscali

That's about £240 per customer. To be honest it would be cheaper to run a decent TV marketing campaign and a special offer "First 3 months free to Tiscali customers". I wonder how much Tiscali's TV campaign cost them. Surely the Sky broadcast network could be employed.

I suspect BSkyB won;t be to bad a home for the poor users, but buying another companies unhappy customer base is a quick fix; and quick fixes always come back to bite you, as Tiscali has already found out.

The reality of consumer broadband; Only BT can win

Excellent week for consumer broadband again; Talktalk breaking apart, BSkyB to rescue Tiscali, and Virgin Media losing 15% of it's staff.

We don;t normally talk about Consumer Broadband; primarily because we believe that unless you own the network you will eventually go bust. But the last few days have gone so far to prove our theory, that we just had to cover the latest developments.

Back in 2006 the launch of a free Broadband service from everyone's favorite mobile phone store was hailed as the way forward. Despite losing Carphone warehouse £45m($70m) in the first 6 months, industry analysts claimed it was the future, and Ofcom said this was proof that they were taking a tough regulatory line: "Look at these 700 shiny, independent ISPs, we're doing a fine job". The elephant in the room was of course that virtually all of them relied on BTs infrastructure.

Since then a good number of these Standalone ISPs have failed; the prefered term I believe is "were acquired by Tiscali", and loads of little providers have been lost, failed to flourish, or just given up .

In the same period NTL was sold to Virgin Media for 4 pence, just before it went upside down, EasyNet was hoovered up by BSkyB. Now the same analysts who said Free Broadband was the future are urging Carphone Warehouse to split out (dump) Talktalk in the delusional hope that someone like Vodaphone might pay £1bn for its customer list, Virgin are cutting staff, and it looks like Tiscali is going to vanish.

BSkyB and NTL are only short term winners; yes they own network, but not enough to cover the country, they too rely on BT to reach their "off-network " customers and in the current economic climate there is no chance of finding the money needed to expand the networks; even these groups TV assets cannot be relied on to fund network coverage as people switch to freeview (you can get the BBC and Dave; what more do you need?!).

So it comes to this: Accelerated by the recession, the dream of a diverse, vibrant, multiplaying broadband led consumer teletopia has come down to three big players, none of which can deliver the whole convergence dream and eventually there will just be BT; just like back in the last big recession.

BT to shed 10,000 jobs

Less than 24 hrs after Virgin Media announced they would be shedding a 2000+ jobs. BT have announced further 10,000 job cuts with contractors out the door first.

I say further because anyone who follows BT will be aware that they have already reduced their global workforce by 1/3rd, down from nearly 250,000 in 2006. In October 2007 a representative of the Now Connect Union, which represents BT middle management, suggested that only the generosity of the voluntary redundancy packages avoided a strike. Unfortunately the result of that generousity is that some highly experienced engineers and network designers took the deal and left BT Global Services, the division now pulling BTs numbers down.

A BT insider recently said to me "...it's like 2001 again, lots of people in the office looking busy; waiting for the storm to hit!"

THUS it came to pass, that CW finally squared up to BT...

For a couple of years we've felt Cable & Wireless has been heading in 'sort of' the right direction; focusing on profitable customers, core product lines, win-able business, etc. along with some pretty radical structural and staffing changes.

However, patience seemed to be wearing a bit thin after a business update for City analysts back in March this year, comments were made along the lines of "... this is all good stuff; but on this business plan, we don;t think you can turn it around fast enough!" Here's the presentation, and what you won't see in there, is any reference to plans to grow the customer base in SMB, mid-market, business broadband, or increased infrastructure investment in the UK.

I guess the city feedback must have focused minds on shorter term revenue generation. For just 6 weeks later, in a stunning volte-face CW announced plans to acquire THUS Telecom; possibly the most successful mid-market ISP in the country, Bringing with it customers in each of those categories, as well as £450m in new revenues, some tasty data centres, a mass of IP services expertise and a country wide NextGen IP network.

The change in the market place is profound. BackChannels own research data shows that over the last two years the "re-Energised" C&W has turned the corner; increasingly good at serving the larger corporate market, with significant project wins and a marked decrease in customer churn, they are starting to give Verizon and Sprint a run for their money. In the UK market the merged company forms the only broad-spectrum competitor to BT.

The ability of C&Ws management to listen to its shareholders and then to turn the whole company on a dime, must be keeping a few people awake over at BT Centre.

Hmm... Wonder what they'll do with Demons broadband customers :0)

Bill Throttled

The Campaign to stop an amendment to the European Telecoms Bill appears to have been successful, although the European parliament has left the door open for President Sarkozy come back with a modified proposal.

Those of you who've have been following this will be aware that the Hollywood funded Digital Rights (Anti-Piracy) lobby has been pushing for ISPs in the EU to be made responsible for infringing EU Citizens civil rights i.e. freedom of speech, association and communications by cutting them off from the Internet permanently if they believe (don;t have to prove) that they or a member of their family has downloaded copyrighted material from the web.

The first self regulated attempts have been a fiasco with errors in billing records leaving ISPs open to legal action, and we've seen ambulance chasing companies tracking down suspected miscreants and selling their details to the DR folks - what ISPs legal team is going to stand for that?

Things you might find in an O2 Shop

In response to my ravings, so common of a new iPhone owner, a friend sent me this today.

The Chrysler Peapod.
Is it the ultimate iPhone accessory? Will we be seeing it in the O2 shop in Cambridge any time soon? I hope not, it's pug ugly.

Integrating a mobile 3G device directly into the vehicles onboard systems, is going to add a whole new dimension and opportunity in mobile content. You thought SatNav was big... mix it with location based services and maybe even guide books.

Thanks to our friends at The Register for the original post.