Hey y’all, I’m back. So anyway. We all know that wireless is dragging on wireline revenue, but Anton Wahlman and Eric Kainer over at ThinkPanmure believe that the Medusa-like head of Skype might be another, maybe bigger threat to incumbents. In fact, they think that as we speak — err, type — a global consortium of incumbents is conspiring to launch a Skype competitor. It will be a Perseus to fight competition, I suppose.

Wow, really? It’s all very secret society. That said, before we discount that such an Illuminati-like group exists, consider that ThinkPanmure tends to get some pretty juicy information (like the rumor that AT&T Inc. has signed a deal with ip.access for millions of femtocells. Hot gossip!). So, let’s look further:

“We believe that AT&T, in conjunction with perhaps 10 to 15 other incumbent operators such as British Telecom, Deutsche Telekom and NTT, is preparing to launch, in 2009, a competitor of sorts to Skype,” the dynamic duo write. “We believe that the motivation to do this would be to keep subscribers from completely disappearing, reducing win-back marketing costs.”

Hmm, well, yes, there’s a point there. If you can’t beat them, join them?

They go on to note that incumbents are supplanting the lost wireless revenue with other services, but: “The loss of the long-time telephone number often means that the incumbent phone operator loses the relationship with the customer entirely. Why? Because the consumer can buy access for his VoIP service such as Skype from another source, such as a cable modem, 3G cellular, WiMAX, or a competitive DSL/fiber carrier. If this happens, the cost to win back this subscriber can be disproportionately high, if it does ever occur.”

Ohhhhhhhh. I get it now: this is coming from dumb pipe fears, plus the inability to leverage the customer relationship to sell in other services.

They go on to elaborate on how it would work: “The service would be free when calling any other subscriber of the consortium, consisting of perhaps 10 to 15 incumbent carriers around the world. We believe the likely hook for the consumer would be that you have to buy your access service, such as DSL, fiber or, for that matter, 3G, from the incumbent. That way, the incumbent, while losing some telephone revenue, can use the power of the DSL line to upgrade the customer to IPTV or to add one or more cellular subscriptions down the road.”

I’m sure they know something (many things — who is their Deep Throat??) that TaraBytes is not knowing of. But my initial analysis of this yields two questions. First of all, considering that the open access drumbeat is getting louder and louder (with AT&T and Verizon Communications Inc. both on board), and with WiMAX on the way thanks to the Sprint spinoff of Xohm, we’re transitioning to a third-party application plus non-carrier-locked consumer electronics model anyway. Might take a while, but we’ll get there. So the value proposition for the carrier will lie in leveraging the information it holds in its network — what was accessed when and where and by whom and where did they go from there? — in order to enable other people’s applications to be more effective. It will lie in providing targeted advertising based on that same network information, creating new revenue from that. It will lie in providing reliability and call quality in the transport layer. And also the differentiation lies in enabling fixed-mobile convergence and the ability to tie services to a person, not a device — porting apps and content around to several different screens (and hey, isn’t that an AT&T thing?). Skype can’t do that without the cooperation of the carrier. So ... in that scenario, launching one’s own free talk service seems like a nice thing to do, but not a necessary one.

The second question I have is, an incumbent version of Skype wouldn’t be a BYO access offering, obviously, would it? Does that mean the call quality would be better? Or could be better? Just akin to digital voice from Comcast? In that scenario, the free calling to other countries thing is niiiiice — all the cheap, none of the echoes. And wouldn’t that cannibalize, become the death wish of, what landline voice they have left (not to mention eroding wireless service revenue too). In other words, why would they want to develop a talk-for-free app if revenue is already suffering? Maybe I have that figured wrong, or maybe I’m just a Chicken Little type, but it seems risky.

What do you think? And do you have any information about this (or any other juicy topics? Come, on, throw me a bone)? If so, e-mail me at tseals@vpico.com.

Yes, folks, I’m back after a week’s hiatus. You know you missed me.

So we’re all familiar with the hype curve and the trail of lifeless bodies it’s left in its wake over the years, yes? Think muni wireless, MVNOs, hosted VoIP, betamax, the Atkins diet …

Well, femtocells might just be the next casualty of hype’s dreaded glance. These small personal base stations sit within the home and use existing broadband connections to backhaul wireless voice with some kind of a VoIP special sauce. To be very technical about it. Well, I suppose I could go into UMA and exactly how it all happens, but that’s not really what’s important, now, is it? No. What matters is that the carrier gets increased indoor wireless quality and a way to take on the wireline competitor in the battle for the building. It’s analogous to dual-mode Wi-Fi/cellular approaches, only a whole lot easier to deploy.

So far, so good, and I for one have been thinking that given increasing cellco backhaul issues, femtocells could really take off in a big way …well, after more than two vendors start offering them and they get cheaper and consumer education ramps up (paging Sprint) and on and on. Judging by what’s been flooding my inbox though, I’m starting to get nervous, because that THING is starting to happen. You know what I’m talking about…that at first subtle refrain reverberating through the industry “femto femto femto,” to be followed by a deluge of breathless endorsements of how femto technology is the Second Coming of Alexander Graham Bell. To be followed a bit later by collective disappointment and the leaving of the technology behind by all but the diehards, who will then spend the next 18 months convincing everyone that femtos do, really, make sense. And finally, if the industry’s lucky, the technology will start to be deployed and we’ll be back to where we would have been two years earlier if the hype-sters had just left well enough alone.

Back to my concerns. Femtos are great, really they are, but let’s take this slowly, can we? We want this to work, of course. But here’s an example from a typical femto-related pitch I’ve been getting:

“There are only two companies with CDMA femtocells currently available, and one of them, AirWalk Communications, will debut a significant new access product at CTIA. They’ll also be talking about their customers, their strategy, and the trends they see in this young but rapidly advancing market.”

Rapidly advancing market? Didn’t you just say there are only two companies with CDMA femtocells? That’s more like a trickle. And besides, with CDMA regulated mostly to our dear United States, that doesn’t do much for Moore’s Law, does it? Yes, TaraBytes is in a cynical mood, I’ll admit.

All of that said, operators could be the key to staving off the overhype by actually deploying it. Dan Hesse is keynoting CTIA, too, and let’s face it, what else is he going to talk about? Sure, he could tackle WiMAX — again — but Sprint usually trots out Barry West for that. So maybe he’ll chat about femtocells. In light of recent events I’m pretty sure Sprint’s shocking profit losses, increasing subscriber churn and lack of competitive devices aren’t on the docket, so …

Bottom line? Run, femtocells, run. Hype is coming for you.

P.S.: Fittingly, the first intelligible phone call was placed — “Come here, Watson, I want you” — this week in history back in 1876. Happy birthday, communications industry. Thanks for the gainful employment.

By Peter Radizeski, President of RAD-INFO

I was reading the PHONE+ article, The Problem with VoIP, and wanted to focus on a few points:

"The typical SMB is not going to make a change to the business unless there is a compelling reason," says [John ] Macario, [president of Savatar]. "So they need to understand what VoIP can do for them, and understand enough of the VoIP feature set to understand which ones will help the business. The service providers aren't doing a very good job at communicating any of that."

A channel partner can fill the gap. "SMBs feel a VAR or an SI is more likely to be local, and will come in and sit down to talk about the business and propose a solution that makes sense," Macario says. For instance, productivity enhancement, the support of teleworkers, the cost-savings inherent in going with a hosted solution - all of these are potential talking points.

I have to agree with Macario here. No one wants to know how a hybrid car works. They are buying it because of the story, for what it says about them to their friends and themselves. It’s the same with VoIP. Why even sell VoIP? You are selling a communications solution that has some cost savings (either capex or opex); some productivity gains; or some added value.

"Then there are skill set issues. There is a requirement with many VoIP solutions to wrap in hardware and endpoints, along with integration and professional services."

Hence, the article states, the reason why XO made a distribution deal with Tech Data. But I see the XO-Tech Data partnership as yet one more move by a company that has no clear vision of what it sells and to who it sells it -- and neither does the marketplace. XO has been added to the one million items in the catalog available to Tech Data resellers. It is going to be about as effective as Radio Shack selling Sprint cellular services. (In other words, not much).

Further complicating matters is the fact that many SMBs don't care about the whiz-bang features, making it challenging to position VoIP vis a vis what the customer may already have in place. So, [PlanetOne CEO Ted] Schuman says a conversation first must start with a realistic view of the SMB's core needs. "For most SMBs, in many cases it's a business owner, and he doesn't understand the hosted PBX nor does he ever want to," he says. "It's a funny thing, but what people want in a phone service hasn't changed much - you want dial tone, and you want to turn on your PC and be able to hit the Internet. Do they understand the depth of the solutions and the applications and the distributed workforce model? No."

Schuman adds, "Selling a service like this is far more complicated than selling LD or dedicated Internet. And if you sell it, you'd better hope the carrier will be able to implement the technology. Agents know that this is probably where the industry is headed, but it's a little intimidating. They need to understand the solution and the application better."

Ted, I have to disagree with you wholeheartedly. It's not that people want VoIP. (And, Ted, Why would you start the conversation with "This is VoIP?") What small business owners want is more time, more productivity, more sales, and less time worrying about the technology (so they have more time to work on their own business).

Your job as a master agent is to help your agents with the skills you say they don't have. We are in a talent war in a fast changing industry. If you want to be relevant in the next two years, you either better find agents with the skills needed to sell SIP trunks and hosted PBX, or you better start thinking about training your current agents in SPIN Selling (or similar).

Besides isn't the master agency supposed to vet the provider for the subagent? I know it is difficult to find a viable VoIP provider today. SunRocket, VoIP Inc., and Vonage don't exactly give the sector a glowing review, but there are viable regional VoIP providers around. Realistically, $20 for a line is not going to be a feasible model. And regional providers should be able to provide the local loop to handle quality-of-service issues. Cbeyond, M5 Networks, and others are doing this in their markets.

Tom Peters chants “Reinvent,” but our industry bucks and fights it with arbitrage play after arbitrage play. You wonder why SMB is afraid of companies like Covad? Let's see: Bankruptcy. Implementation problems.

Our industry has created its own black eyes. And it does not want to reinvent itself. "Hey, we are making money now, right? Why worry?!" You should worry because the next generation of entrepreneurs is WAY different than what we are used to. And they communicate very differently: Twitter, Facebook, Meembo, TalkPlus. They won't be using a landline much, nor many minutes.

To re-invent, the industry has to get away from selling on price. Jeffrey Gitomer, sales trainer and author, writes to me, "Telecom has created its own demise. By focusing on price for the past 25 years, you've painted yourself into a corner. And the turnover of salespeople in your industry is rampant because of it." [Sales Caffeine, issue 322, Jan. 8, 2008].

The sales process involves open-ended questions to paint a picture of triggers. We will be discussing triggers during our panel on Virtual Office at the Channel Partners Conference & Expo.

More from the PHONE+ Article: "I've yet to meet a SMB decision-maker interested in buying VoIP (hosted, premise or trunks) just because it's VoIP," says Dan Baldwin, an agent and consultant with ATEL Carrier Consulting. Customers won't switch to VoIP in order to get their voice mail messages in their e-mail inbox, or have their desk phone, cell phone and home office phone all ring at the same time, he adds"

Dan, most small businesses love the UC features. I talk to many people selling hosted VoIP, you would be amazed at what the customers find as the hot button. (But then to do that you have to actually get out and do consultative sales, not the "I'll-save-you-10-percent-let-me-see-your-bill” pitch).

This sale won't be made with fancy PowerPoint presentations or talking about "more than 20 productivity-improving applications." It will be made by talking with current users and relating their stories (and testimonials) to your prospects.

The kicker is that this makes the sales process longer and, ultimately, more expensive that the bid-by-numbers approach we have today. And the commission on VoIP isn't enough to force that transition just yet.

Overall, I think agents have to start ramping up to sell VoIP. If not, they will be pushed out by Tech Data VARs, Cisco and Microsoft resellers, interconnects (key system/PBX resellers) and telco account execs.

..............................................................

How Can You Vet the VoIP Provider?

• One point is to make sure that the provider has its feet firmly planted in one strategy - not wholesale AND retail. One or the other, not both. Too many started with retail and went wholesale to bring in revenue. It is difficult to do both well -- XO, Level 3. And you don't want your provider to be creating more competition in the marketplace directly against you. (There are more than 1,000 VoIP provider; no need to create any more).

• Make sure they have a billing platform -- a good one -- or they can't bill per minute. If they sell flat-rate, it is likely the business plan will topple over.

• What is the plan for scale? How do you scale tech support and customer care as you add hundreds of users?

• How do they handle QoS? How many session border controllers are there in the network? Where are they?

• Explain the redundancy -- both hardware and bandwidth.

• Who handles level 1 tech support?