Exclusive: Will Page, the MCPS PRS Alliance Chief Economist, will be presenting at the Telco 2.0 event next week for the first time new research that all is not what it seems with the original Long Tail theory - and questions whether the future of business really is selling ‘less of more’.

The theory as developed by Chris Anderson back in 2004, and which has since become a widely accepted buzzword, doesn’t stand up to robust statistical analysis he says.

On stage next week, to support his argument, he will share analysis of digital music sales data gathered over 12 months from a catalogue of 13m songs. This is part of pioneering work with Harvard Business School and Andrew Bud of MBlox. At the event we will explore this analysis with the 250 senior execs gathered and try to decide what it means for investment strategy in markets disrupted by the long tail effect. Ultimately, should you bet large, small or not bet at all?

In the meantime, as an introduction, this Harvard Business Review article is strongly recommended.

Watch this space for more on this topic…

Posted at 11:08 AM | Link to this article | 2 comments

Over the last six weeks on this blog we’ve been examining why telcos, in the current climate of uncertainty, are perceived as ‘defensive’ by investors - namely low financial leverage and robust cash flow generation (see here). This trend appears to be continuing, but telcos shouldn’t grow complacent about their popularity - this will wane as the market eventually normalizes.

At that point, investors will return to their relentless reassessment of the long-term potential for sustainable shareholder value creation, and the historical record is not encouraging. Our discussions with investors this week strongly suggest that they share many views with the Telco 2.0 initiative - a need to identify and sweat core assets, develop creative approaches for areas of weakness, define a clearer vision, embrace partners, and focus on the wholesale platform.

In the article below we provide evidence suggesting that the interests of telcos and investors may actually be closely aligned in embracing a two-sided business model approach to redefining the future of the telecom sector. (We’ll be presenting a summary of this and the previous analysis at the Telco 2.0 event next week as stimulus for the debate on how to work with the investment community):

The almost unprecedented financial carnage of recent months is not, as many have argued, a shock, but rather the natural consequence of years of poor corporate governance and regulation, unbridled optimism underpinned by voodoo economics, and good old-fashioned arrogance and greed. Whatever the excesses and failings of the financial world, that chapter is fading, and, as we have discussed previously, the next chapter - economic downturn - is upon us.

Telcos, of course, have been on the receiving end of precisely this dynamic before, during the post Web 1.0 bubble market collapse of 2000 - 2002, when share prices in the European telco segment fell by more than 30% per annum for three consecutive years, the vastly overcapitalized altnet space all but disappeared, and five incumbents came very close to financial oblivion.

With the memory of this period still fresh in the mind of many, it perhaps seems counterintuitive that, against the background of the current turmoil and anxiety, telcos should now be viewed as a defensive sector by investors. However, that is precisely the message coming from recent market performance, shown in the chart below.

We discussed reasons why this might be so in our previous two posts on the subject, and if anything the market recently seems to be validating our views with greater conviction (note that telco finds itself in the company of hardcore defensive sectors like food, healthcare and personal goods), but to recap, the main points to stress are as follows.

Cash generation and levels of financial leverage

Having lost discipline on both fronts during the late ’90s boom, telcos have recovered admirably, with many of the worst offenders from that era now moving towards leverage levels (defined as net debt/EBITDA) of around 2x, and in some cases dramatically less.

Meanwhile cash flow remains enviably strong. A good case in point is the recently released third quarter results from KPN, in which this relatively small company confirmed its 2010 target of free cash flow of at least €2.4bn, i.e., a level consistent with its performance in recent years. Historically, the company has used almost all free cash flow for shareholder returns, typically evenly split between dividends and share buybacks.

Therefore, barring a catastrophe or total loss of management focus, an investor looking at the scarred financial landscape would naturally gravitate to such a company, and unsurprisingly KPN is the third best performer in the European sector year-to-date (and number 51 out of the STOXX 600).

From a longer term perspective, KPN’s cash flow is also attractive for the future option value it delivers: it can be opportunistically deployed by the company to attack, defend, transform, or acquire as needed - the number of companies with such a range of options declines by the day.

Refinancing risk

As the chart below shows, the amounts in question are not trivial, and a loosening of the credit market notwithstanding, refinancing will almost certainly be more expensive. However, it is important to note that in each case, the amounts in question are within the free cash flow envelopes of the companies, so refinancing should rightly be viewed as, at worst, an incremental source of pressure, rather than as a terminal event.

In contrast, many of the private equity-backed companies in the cable and alternative operator space are carrying 4x - 7x leverage, and will face serious challenges in refinancing - a view reflected in the fact that the debt of some currently trades at less than half of its face value.

The message is further underlined by Virgin Media’s recent request for senior debt holders’ consent to defer maturities to 2012, and also by Spanish cable giant ONO’s reported intentions to lay off 30% of its workforce.

While telcos may be attractive to investors in the current climate of uncertainty, this is in a sense a deeply unflattering compliment, akin to “Please hold my hand, you’re the least ugly girl at the dance.” Apart from the aberration of the late 90’s boom, when explosive growth in mobile subscribers and enthusiasm over 3G prospects lent telcos an almost “dotcom” level of glamour, telcos as a group have rarely ever delivered consistently impressive long-term returns to shareholders.

In fact, an examination of annualized total returns for a selection of telcos since IPO demonstrates that the long-term, “buy and hold” investor would in many cases have been better off buying “boring” government debt, or even simply putting cash in a savings account. (In the specific case of the European telcos, Bloomberg data shows that average annual returns over the past 20 years have been 5.47% - bond-like, albeit with an awful lot of volatility along the way.)

“Telcos, particularly in Europe and Japan, need to either gain competence as investors or learn to give 100% of free cash flow back to their share owners. Many telecoms executives see themselves primarily as operations staff (they know how to run networks/businesses) and are not financial investors, but many of these same executives think it is a horrible idea to return 100% of free cash to shareholders, and instead want to do M&A for growth. Logically speaking, these are mutually exclusive perspectives.”

“A) Anticipate the future and then formulate a vision of how to get there. These guys miss everything, it seems. B) Learn how to make nice with partners and not try to squeeze every ounce of blood from them.”

“1). Good-faith structural separation.  NOT to keep the regulators happy, but to clarify their own internal cost/return structures.  2). Good faith wholesale service on flexible access terms (especially in wireless).  A simple, clearly-defined/specified, no-human-permission-required means to access a wireless network to achieve whatever ends the end device seeks (rather than having to sit down and negotiate customer terms with the carrier).
3). Auction structures for selling network capacity or some similar way a way to sell currently un-sold network time at say 3 AM (again, especially in wireless).  By definition, this needs to be low cost and low friction. ”

Perhaps most telling in our discussions with institutional investors was the prevalence (among 60% of respondents) of a view that what telcos do best is, in fact, lobbying and engineering regulatory barriers to entry.

Given the apparent investor skepticism around telco capabilities, it is important to maintain a sense of perspective and not become complacent with the current popularity of the sector (nor with the prospect of a number of competitors going to the wall), because as one financial analyst was recently overheard to say, “The secular issues facing this industry make the cyclical challenges look almost trivial.”

It may be safely assumed that, once the market stabilizes, investors will return to a greater focus on long-term strategic issues affecting telcos’ ability to generate sustainable shareholder value, and here the jury is very definitely still out.

Moreover, though we may speak in terms of relative financial strength as a telco virtue currently in vogue, it is sobering to consider the possible long-term implications of the financial positions of a group of companies which we identify, for various reasons, as “encroachers” in various aspects of telco activities. This is presented again in terms of financial leverage (net debt/EBITDA), where a negative number indicates a net POSITIVE cash balance relative to annual EBITDA.

Viewed in this light, telco financial flexibility looks somewhat less enviable, especially as we can expect that many of these truly global (a claim no telco can legitimately make with regard to more than one part of its business portfolio) “encroachers” will continue to innovate and invest through the downturn, emerging stronger in the end.

The challenge, and opportunity, for telcos is to do the same. The real window of opportunity is probably only as long as the looming recession itself, estimates of which seem to grow deeper and grimmer by the day. However, there’s no time like the present to begin the process of repositioning for the eventual turnaround. We believe this process should be guided by the pursuit of two-sided business model opportunities, and consequently, the chance to force a fundamental re-evaluation by investors of long-term telco prospects. Why do we come to that conclusion, and what do we mean in concrete terms?

Lets go back to our fund manager friends for some guidance - after all, their views of “telcos of the future” will have a lot to do with what telcos can do, what they are worth, and what sort of capital they can raise.

“Telcos need to either gain competence as investors or learn to give 100% of free cash flow back to their share owners.”

In practice, the years ahead will probably call for walking a tightrope between the two extremes, but investor response will be determined by how the message is communicated and executed upon. If cash needs to be redeployed in investments for transformation, reinvention, or asset optimization, that’s a saleable message, if it is presented credibly.

What matters most is that it be backed by a well thought out plan, and that will initially require an honest audit of the company - what it’s really good at, what it should and realistically can improve, and most importantly, what it needs to find another solution for.

“Anticipate the future and then formulate a vision of how to get there. These guys miss everything, it seems.”

Reading the tea leaves has never been easy, particularly in a period of unprecedented economic turmoil. However, a few things we seem to know from history. Cross-border incursions and M&A strategies based on footprint have delivered very mixed results - a handful of successes as well as many humiliating retreats. Homegrown innovation has long-ceased to be an area where telcos can really play.

Neither is consumer experience an area in which telcos have covered themselves in glory. Optimization (product tailoring/segmentation/personalization, customer care and churn reduction), on the other hand, is hardly ever a bad thing, particularly when market growth falters. Ditto for a more robust approach to wholesale - not only in terms of the existing range of services, but more importantly, those services which you haven’t created yet.

“Learn how to make nice with partners and not try to squeeze every ounce of blood from them.”

The term “partner,” by definition, suggests someone aligned with one’s own interests, and by implication is someone with complementary attributes - if we were all fully-formed and complete, there would be no need for partners. Leaving aside the accusation of “blood-squeezing”, the salient points for us are:

1. Having the agility and flexibility to be able to partner with small and innovative companies in an equitable manner, to enable the wholesale platform services which you haven’t created or thought of yet;
2. Remembering the Peter Principle - “everyone rises to his own level of incompetence.” Partners may also need to include those to whom you outsource (or even sell) elements of your business, if an honest review of your business suggests that they could run it better than you.
3. Making friends with scary people - The “encroachers” mentioned above have a lot of cash, ability to innovate, and truly global scale, it’s true. They may even have relationships of some sort with many millions of your customers - but what they lack is the level of insight into your customer base that you have. How might you be able to parlay that advantage into a viable partnership or a wholesale service that multiple encroachers would pay to access?

“Good-faith structural separation.  NOT to keep the regulators happy, but to clarify their own internal cost/return structures…  Good faith wholesale service on flexible access terms…” These soundbites from “Investor #3” really bring all the above points to a head, and demonstrate an imminent need to grab the bull (or, perhaps more appropriately in the current financial environment, the bear) by the horns (or ears).

In an era of constrained finance, everyone, from national finance ministers to individual consumers, has to adopt a Darwinist approach to how capital and effort are expended, and to what end. Telecom, like many other industries, is vulnerable to challenges as to how it is organized, and as to whether the status quo actually represents the optimal financial efficiency for the future.

Investor #3’s opinions seem to point to the fact that there may be a confluence of interests between telcos (clarification of divisional financial performance metrics and capital efficiency) and investors in pursuing the broader opportunity to develop new markets around wholesale platform opportunities.

We look forward to engaging with you on practical steps to bring about the changes required to capture the two-sided market opportunity at our upcoming event.

Posted at 03:59 PM | Link to this article | Add a comment

One of our Telco 2.0 themes is how telcos need to become better retailers. At a client workshop last week with a major mobile operator we were pointedly asked how to go about achieving true customer intimacy. We believe that one key element is to tie analytics to business processes. This topic is covered in our current bedtime reading which explains how data warehouses and CRM systems typically live in different universes. We are not alone in thinking this. In this guest post Mark Johnson, Global Marketing Director at SAP, explains his view on how we will see a shift from reactively managing interactions with customers towards proactively seeking value to bring to customers - something called ‘Customer Value Enhancement’. (Ed - Mark will be stimulus presenter at the Telco 2.0 executive brainstorm next week).

“Hi Miles, coming up - Finals Frenzy - live coverage of FA Cup Final, Heineken European Rugby Finals and the Final deciding Test Match between Australia & India from Delhi - see them all live via IPTV this month for £14.95”.

“Hey Miles, you’re booked on a flight to San Francisco which clashes with the Heineken Cup Final - would you like to receive live updates on your mobile and timeshift the full game to watch on-line from your hotel the following morning?”

“Miles, other members of your family calling plan have downloaded sports coverage from us in the last 3 months. Why not upgrade your calling plan to include “sports special” - £12.00 per month additional for live scores & updates from all featured events direct to up to 3 mobile numbers and half price pay-per-view offers on all premiership football matches - click to run a billing simulation”.

“you could save £35 this year if you upgrade now - click here to upgrade & renew for a 12 month period”.

“James is on-line now, would you like to send him a personalized text message to give him the good news?”

“Miles, before you go, since there are 30 minutes of delays on your route home tonight why not download the new “soothing classics Vol 3” album from our music store, direct to your mobile to listen to in the car? One-time download & play for only £3.99”.

“Volvo Cars would like to offer this download for free - just take their short interactive voice survey whilst in the car-park - click here to participate”

“it’s nice to know that my service provider knows what I want and keeps me updated with special offers to save me money…..Beep Beep, you have one new message “thanks Dad!”

Miles’ Service Provider has pioneered the concept of Customer Value Enhancement (CVE) - a predictive, adaptive approach to linking front and back office functions through advanced business intelligence and analytics. CVE provides a customer’s-eye view of the world, powering the development of new offers that can be served up in anticipation of customer needs, and in ways that promise to delight the customer, promote loyalty, and improve margins.

That may all sound like years away from reality but today’s analytics platforms offer sophisticated capabilities which, if deployed in the context of customer-driven, closed loop business processes can deliver CVE as a natural evolution of systems & processes already running today - in fact outside of the Telecommunications arena many Retail & Consumer Products companies already utilize these capabilities to great effect.

Customer Value Enhancement (CVE) is the end point along an evolutionary scale begun nearly 20 years ago with Customer Relationship Management (CRM) and fostered by more recent developments in Customer Experience Management (CEM) as shown in figure 1 below. It has as its goal long-term, profitable business relationships that are valued by both customer and supplier.

In a CVE environment, business functions are proactively initiated by the Service Provider based on who the customer is; the products and offers to which they subscribe; the performance of those products and services; the customer’s usage levels; and other attributes and behaviors. CVE also employs demographic and psychographic insight from sources outside the Service Provider world, often provided by third-party data sources. Lastly, CVE gives the ability to predict future behaviors, facilitating the recommendation of the best combinations of services, features, content, and equipment for that consumer.

To further understand CVE, consider the historical context: During the 1980s, telecom operators embraced CRM (Customer Relationship Management) systems to mechanize order taking, and later multiple processes were added to the scope. More recently Service Providers have begun to consider Customer Experience Management (CEM) as the next step beyond CRM. CEM seeks to facilitate better overall understanding of the customer’s end-to-end experience by gathering data from multiple touchpoints, including CRM, billing, and marketing systems and correlating that with fulfillment, inventory and service assurance systems1 to ensure up-to-the-minute status of the complete customer-affecting environment. This is still a bit new, but it holds the promise of making providers better “listeners” to the needs of their customers, and presumably, better suppliers as a result.

CRM and CEM both add to the communications service provider environment in a positive way. The orientation, however, is largely supply-driven (“Here’s what we have to sell today”) and focused on prevention of loss (“If I have data on how well we do, I can understand your behaviors better and compensate you if we fail.”). Instead, CVE is oriented toward anticipating customer demand and building a relationship with the customer to satisfy that demand for the long-term.

Delivering Customer Value Enhancement

In a recent report published by leading Industry Analyst firm Stratecast, a division of Frost & Sullivan, they define five critical ingredients for CVE success:

1. CVE Mindset - Provider recognition that they are in the business of retailing, not technology. With a retailer’s point of view, the Service Provider will organize business functions according to well-researched customer needs and behaviors.
2. Executive Commitment - This is a well-documented phenomenon in project success and a critical factor in moving companies to more fact-based decision making cultures.
3. Back-office/Front-office Operational Integration - Back office operational systems (e.g. ERP, inventory, fulfillment, service assurance and billing) need to communicate to front office (CRM, CEM) systems in a manner that is as near real-time as possible, based on updates that affect customer touch-points.
4. Robust Business Intelligence (BI) & Analytics Environment - An important part of CVE is the ability to sift through large volumes of operational data, to identify patterns that may reveal business opportunities. Enterprise-caliber business intelligence platforms will be required to deliver the capabilities considered essential to CVE.
5. Strategy - Operations Linkage - This is the key, the essential ingredient to moving into the realm of CVE. Theoretically, all organizations process customer feedback as a critical input to offer improvement, so what is new here? The differences for a CVE-driven company are many: the decisioning process is fact-based and analytically sophisticated; these decisions are powered by input from all points of the customer experience; and they result in proactive (and in some cases real-time) outreach to customers resulting in a closed-loop process.

Conclusion

Today’s consumers demand more than the standard supply-driven service bundles based solely on their service provider’s internal perspectives. They expect their provider to interact with them in real time to offer highly targeted & relevant products & promotions, based on a deep understanding of each individual customer taking into account the timing, context & format of each individual transaction.

Those Service Providers that can utilise the goldmine of analytical intelligence available in back office & front office systems, as well as 3rd party sources to close the loop between strategy & execution in order to proactively reach out to individual consumers in real time will lead in the field of Customer Value Enhancement and, in turn, reap the rewards of increased loyalty, reduced churn and increased margins.

[Note: the concepts discussed in this article are further explored in a recent report “Customer Value Enhancement: Linking Strategy & Operations for Better Loyalty and Margins” published by Stratecast, a division of Frost & Sullivan]

Posted at 12:03 PM | Link to this article | Add a comment

So, Mobilkom Austria has signed up mobile SIP developers Fring to create their new voice & messaging service. This is an exciting development; Mobilkom reckons it’s the first time a carrier has taken such a step, and we’re fairly sure they’re right. The nearest example would be BT and Ribbit, and there’s still plenty of uncertainty about how that will pan out. Fring is a mobile VoIP startup we covered in our Voice & Messaging 2.0 report.

The first point to consider here is that Mobilkom is starting right in the middle; although they have networks right across the Balkans and south-eastern Europe, this is happening at headquarters in Austria, under their core A1 brand. In the past, they’ve often tried out new service offerings elsewhere in the group, as they did with their impressive converged carrier VoIP offering and their WiMAX broadband deployment.

Arguably, this shows that they’ve internalised an important point about Telco 2.0; change will require the support of the organisation. BT, for example, launched its Web21C developer environment without answering the questions “Who is in charge of this?” or “Which bit of the company promotes this?” In fact, a reorganisation early in the program actually broke up the organisational unit that had originally been responsible for Web21C and Project Firebird and shifted the executive in charge elsewhere; and the rest is history, as is the project itself.

Another important point about Telco 2.0 this makes clear is that you shouldn’t be religious about any particular technology. Fring, like so many other V&M2.0 startups, launched itself from the work done by the IETF to develop and standardise SIP. Specifically, they’ve always worked exclusively in the IETF’s version of it; Mobilkom, however, has been quite enthusiastic for IMS, and has deployed IMS technology, having started off by developing its own SDP. So long as you’re being well-behaved, though, and not using any nonstandard or nonopen “extensions”, it shouldn’t be that difficult to integrate a third-party SIP client with an IMS SIP network.

It will be interesting to know if the new service will actually use IMS, in the sense of routing its SIP traffic through Mobilkom’s CSCF rather than either simply working as normal, getting only connectivity from the network, or using Fring servers within Mobilkom’s SDP. All this also means that the service could ride on Mobilkom’s Balkan WiMAX networks as well as it does on its Austrian UMTS net.

Thirdly, this is an example of something we come back to over and over again. You’re unlikely to come up with a killer application inside your marketing department; you’re marginally more likely to do so in your R&D department (if you have one), but it’s still not that likely. And the very idea of a killer application is flawed. Instead, people in closer touch with user needs and changing technology are likely to do better, so you need to create the network APIs, community infrastructure, and terms of business they require.

It looks like Mobilkom is going to drop the carrier VoIP service we mentioned, essentially replacing its client with Fring’s, and then start deploying Fring for its mobile customers; A1 over IP was a fairly impressive offering, integrating as it did their PSTN, PC VoIP and mobile services, but no-one will be surprised to learn that a telco wasn’t ideally placed to design a great user interface or user experience. Bringing Fring on board means not only that the feedback cycle for changes to the user experience gets a hell of a lot quicker, but also that Fring’s own developer ecosystem comes along too. So you’re going from major systems integration to widgetry in one deal.

Finally, disintermediation is inevitable; if Mobilkom is going to provide its users with the full Fring feature set, this means that they can choose whatever source of SIP termination they like, or even use SkypeOut instead; wholesale competition will be right there on the handset. But this is the heart of Telco 2.0; it’s about accepting that competition and responding by creating fantastic new products.

Update: We were able to conduct a Q&A with Fring’s VP of marketing, Roy Timor Rousso, and network architect, Boaz Zilberman, and here it is!

The fring API program is open for all and for all partners, meaning that any add-on developed by the fring community is available for users from A1 just like any other users

Not at this stage, we will discuss these capabilities in the near future

Value to users, branding , marketing and leadership positioning is leading the relationship. In the future we may discuss potential revenue share.

As I mentioned above any Add-on developed  for the fring community will be also available to the A1 users,

Yes.

Fring is integrating into A1’s IMS core via the SIP/SIMPLE protocol

Posted at 04:44 PM | Link to this article | Add a comment

In Today’s Issue: 30% discount on broadband; AT&T iPhone overdose; Vodafear; Mauretanian WiMAX; Africa teems with Opera Mini users, apparently; Live Messenger on the SIM; Indian speccy auction slides right; criminal mobile payments; dancing nonsense from Intel, Vodafone, Orange, RIM; horror predictions; Android backlash; BT sues Germany, info wants to be free apparently; Infinera ships units; cracking new voice & messaging app for RIM; Mobilkom ties up with Fring; Blyk in Belgium; Ovi works best as part of iGoogle; Telephony Online’s search for a star

“Industry” economists blast EU net neutrality; they would say that wouldn’t they? More interestingly, they reckon it might increase the end-user price of broadband by about €10 in Sweden and Germany; as nobody is doing un-neutrality now, this suggests that broadband is currently being sold about 30% below an economic price. Which wouldn’t be altogether surprising.

After all, the industry has a way of doing these things; AT&T announces a profit warning due to selling too many iPhones. You read it here first; we blogged some time back that a major difference between the 2G iPhone and the 3G iPhone was that as well as taking a revenue share, Apple has managed to wring an impressive slug of handset subsidy out of AT&T. They are literally paying to shift them, and it’s no surprise this has turned ugly for Ma Bell. $900 million slashed off profits entirely due to iPhones; wouldn’t that effectively be $900 million straight into Apple’s revenues?

Meanwhile, fear stalks the land. After poor results at Millicom, Vodafone shares tanked on the principle that its emerging market interests might be hit by the same problems. Not surprising, really; Mauretania’s getting WiMAX now. A country where the main political news was recently that a former slave was standing for president has wireless broadband — we’re living in the future. The vendor is ZTE, of course.

MTN is pushing Opera Mini to its customers in Africa. Did you know there are 175,000 mobile Internet users in Uganda? Meanwhile, Oi’s Brazilian customers get MSN Live Messenger on the SIM.

Indian 3G and WiMAX auctions have been put off due to trouble with the military over spectrum. The vendor death squad returns to its holding pattern to await further instructions.

More emerging market innovation: some chip and PIN merchant terminals are shipping from Chinese factories with secret and very much undesirable GSM modules that send card details to people in Pakistan.

In other Vodafone news, they get spotted engaging in a spot of dodgy tricks towards Orange UK and certain Blackberrys; as does Intel with some boasting about x86 vs. ARM technology. But then, everyone’s whistling past the graveyard these days: dire predictions for vendors abound.

The Android backlash is underway. The Guardian tech blog thinks the applications on it are dire, and Dan Hesse, CEO of Sprint Nextel thinks it’s not good enough.

It’s been rumoured that there is internal dissension at BT about the Phorm ad platform, setting the BT Retail people against BT Global Services’ security group. Here’s a possible data point: BT Global Services in Germany is suing the German government over its proposals for telecoms data retention. We’ll be thrashing out the controversy at next week’s Telco 2.0 event.

Raging demand for bandwidth suggests that high-performance optical networks are likely to be a business with crunch resistance. So it proves at Infinera, according to Telephony Online.

New voice & messaging application of the week: BlackBerry users can now log, tag, search and otherwise munge their call history. More at Wireless Week. We think that user data is going to be a goldmine of new apps and business processes. The question is who will find their way to the goldfield first.

Better than that; Mobilkom Austria has basically tapped Voice 2.0 developers Fring to make their new voice service based on SIP. The existing A1 over IP service will be rolled into it; then the client will hit the mobile handset. Watch out for it rolling out on Mobilkom’s Balkan WiMAX properties. And don’t forget that Voice & Messaging 2.0 will be a top priority at Telco 2.0 next week as we explore how to apply 2-sided market principles.

Blyk, meanwhile, rolls its ad-funded telco into Belgium with another NSN-managed core network.

The best way to use Nokia’s Ovi services: through iGoogle! This nicely illustrates a bigger point of empowering users to combine and modify services. Sadly, most telco products are completely stuck in “take what you’re given” mode. Don’t like your carrier’s voicemail system? Tough.

And finally, which telecom exec could be America’s CTO?

Posted at 03:16 PM | Link to this article | Add a comment

Earlier this month we had the pleasure of presenting and facilitating at the user conference of Martin Dawes Systems (Martin Dawes Systems), a provider of integrated billing and CRM systems, as well as analytics via their business unit Lavastorm, now rebranded as Martin Dawes Analytics.

Martin Dawes Systems’ history is in supplying both large and small operators who want an integrated BSS back office solution. These operators want to avoid the cost and integration headache of the “best of breed” approach. The integrated solution also brings its own benefits, such as enhancing the ability to manage business processes end-to-end. We’ve picked up in this article some highlights of their products, and some new ideas about how to run billing, CRM and analytics systems based on the debate with the senior execs who attended - from AOL, Vodafone, GSMA, Carphone Warehouse, BT, KPN, Orange, Telefonica O2, T-Mobile, DTAG, Thus…

You can view our keynote presentation on two-sided markets here. Ian Pannell, Chief Architect of the GSM Association, covered the purpose of the organisation, and their key initiatives. You can find details of these on their web site, and the newly announced Mobile Broadband marketing program here.

Dewi Thomas, Managing Director, Martin Dawes Systems

In his opening address, Dewi reminded attendees of the four pillars on which their BSS systems are built:

• Single point of contact
• Single view of customer
• Single point of reporting
• Single view of product

We are inclined to agree with the company’s stratgy. These are the foundation for today’s one-sided market model (selling bundled voice, video and data to end users). Furthermore, without these you have no basis on which to construct a two-sided market, facilitating business processes between users and merchants, such as billing or customer care. The key assets of an operator is not its network, but the customer relationship and the data that represents that.

Cato Rasmussen, Head of Solution Strategy, Martin Dawes Systems

Cato had one central, important idea to share, and it’s worth close attention.

Traditionally, telco networks and services were vertically integrated. That meant one provisioning and billing system per network. When services are combined to cross networks, you have an explosion of complexity due to the many-to-many relationships. A product that bundles WiFi with DSL and 3G data requires multiple sets of interfaces, data repositories, and business rules, all of which need to be kept in sync. It also creates enormous cost. In the course of his career, Cato has seen telcos with as few as eight billing systems — and as many as 110.

Furthermore, customers, payment methods and products were (and continue to be) tightly coupled. This is why, for example, we don’t see prepaid fixed broadband products, despite their obvious applicability to those with poor credit, or low usage.

This contrasts with banks, who have cleanly separated customers from products. It’s perfectly normal to have a savings, current (checking) and mortgage account — and still expect the bank to have some concept of you personally as a customer. Telcos, therefore, correspondingly need to be able to separate payment method from product. That means creating a pick-and-mix of prepaid, postpaid and “pay now” billing methods, and have these span the entire product set. A single product could have a mix of prepaid and postpaid usage, and that prepaid balance could be drawn down by any of the products.

This frees data from process, and is a key competitive weapon of anyone with an integrated billing and CRM system such as the one from Martin Dawes Systems. As telcos evolve more towards general retail with a “long tail” of niche offerings — fitting products to customers, rather than the other way round — these capabilities will rapidly grow in importance.

Gary Steen, Technology Director, Martin Dawes Systems

Gary demonstrated the user interface of several of the company’s products. We’d like to pick up on two themes.

Firstly, customer self-care interfaces need to be a lot smarter and sophisticated. For any users of services like Google Mail, responsive “Web 2.0”-type user interfaces will be a familiar norm. For users of telco self-service portals, long waits and fractured user experiences are the norm. Martin Dawes Systems demonstrated their customer self-care interfaces, including features such as interactive chat with support personnel.

The second theme, also on the topic of usability, was based on making it simple for business operations people to configure and use BSS systems directly, rather than having to rely on IT personnel to write cryptic codes in configuration files that are harder to decipher than Linear B. One example demonstrated was their tariff builder.

This focus on usability and user experience continued through the call centre operator’s dashboard, as well as using Rich Internet Application technologies to offer Web retail shoppers a 3D “carousel” of phones to browse. Whilst other vendors may have the longest tick lists of features, Martin Dawes Systems appears focused on making what it does offer usable and user-friendly.

Drew Rockwell, CEO, Martin Dawes Analytics

Lavastorm was acquired by Martin Dawes Systems in 2005, and the conference announced the company rebranding as Martin Dawes Analytics. Their focus is process analytics in order-to-cash operations, something of extreme interest in credit crunched times.

The CEO of Martin Dawes Analytics, Drew Rockwell, is as American as the Statue of Liberty. OK, more American that the Statue of Liberty, as that’s a bit French. Still, punning on the Obama campaign slogan, he busily distributed “Martin Dawes ‘08 — Analytics you can believe in” badges (“buttons” to our American cousins).

His message — or should we say ‘stump speech’ — was simple. Improved analytics let you create cash, preserve cash and enhance business transparency. To prove the point, he went through case studies. Examples included:

• Near real time monitoring of credit limits through alarms, preventing fraud.
• Reconciliation of events along the revenue value-chain to reduce billing errors
• Detecting the one operator in the call centre making the same mistake hundreds of times over.
• Eliminating fraud from account applications from relatives of delinquent customers.

In discussions afterwards, the secret sauce of Martin Dawes Analytics is that it helps to capture institutional or tacit knowledge. Traditionally someone skilled in SQL (the database query language) will write each business query. This is unlikely to be the same person who understands the business process. It adds cost, time lag, and potentially introduces undetected errors.

With Martin Dawes Analytics, the components of each query are visually modelled and easily combined and re-used. Thus it becomes easy for business analysts, as opposed to IT specialists, to construct analytic queries. Furthermore, those insights into what kinds of queries are important aren’t lost inside some SQL script, never to be remembered, and totally forgotten once that employee moves on. Again, the message is that the cost of a BSS system isn’t just the purchase and support costs, but the cost of the people who operate it, and the effectiveness of their product.

Customer presentations

Phil Jordan, CIO of Vodafone UK, reviewed the state of the UK mobile market. Vodafone’s UK operation is under more strain than opcos in other markets due to saturation and high competition. Meanwhile, Vodafone UK’s business plans broadly reflect Telco 2.0 themes — growth through stimulation of core voice and messaging revenues, new advertising revenues, and growth through improved wholesale products and market share. This means meeting growing demands on the back office whilst also reducing expenses.

On the cost side, his capex budget is shrinking to reflect the realities of the market. That means consolidating and de-commissioning systems. The ultimate goal is one billing system, one CRM system, one rating system, and one provisioning system. The means is through partnerships with suppliers, and the bulk of his presentation was given to describing the principles that they follow, and how that differs from traditional vendor relationships.

Jeff Wollen, Director of the Carphone Warehouse Group, has clearly been reading the right books on business theory. Each company can excel at only one of three core means of differentiation: operational excellence, customer intimacy, and product leadership. The job of a (retail) telco is to get customers. That’s a customer relationship business. Therefore activities such as building and integrating IT systems are not aligned with that goal, and must be outsourced as a managed service.

Continuing this theme, he told the story of how by using Martin Dawes Systems he had slashed the implementation time and costs of building his business. His internal IT function was focused on those things that created true value to the business, rather than replicating standardised industry components.

As with Phil Jordan, he emphasised the nature of the give-and-take relationship with suppliers. He appealed for two things: for suppliers to help remove bureaucracy from their processes around product changes, and for suppliers to be willing to take risks and trial capabilities with customers. In other words, become lean and agile.

Attendee interactive feedback

We gathered feedback from attendees on the keynote talks. The first question was (as before) how people viewed the industry’s future in terms of revenue, and the strong consensus is of slow decline. This is due to internal and external competition, regulatory pressure, and increasingly utility-like market structures.

When asked to rate the three two-sided market structures (retail platform, wholesale platform and B2B2C VAS platform), all three were rates as being either “strongly” or “very strongly” important to future growth. Again, the VAS platform was highest rated, with a spread of opinion on the importance of new growth via wholesale markets.

Finally, when asked to name the top three BSS initiatives operators need to undertake, there are two clear winners: improved self-care for end users, and an integrated view of the customer.

This links in with what Cato Rasmussen, a Director at Martin Dawes Systems, had to say: “with these enablers, you can start to act like the kind of packager and retailer that telcos need to become, free of billing, provisioning and care systems tied to specific networks or products. If I buy a television, towels and tea from Tesco, I don’t need to go through three different checkouts. You win by having the best customer experience, which is far more than just the product in the user’s hand.”

[Ed - you can meet Cato and the Martin Dawes Systems team in the Innovators Zone at the Telco 2.0 event next week].

Posted at 12:41 PM | Link to this article | Add a comment

Technology evangelism can be a dangerous thing; new technologies rarely directly displace incumbent technologies. Each incumbent technology has a surrounding ecosystem that gives it network effect, cost and distribution advantages that the upstart initially cannot match. Rather, new technologies spread by finding new applications, and have properties that the older technologies see as unimportant. They can also acting as a complement to existing technologies. This process was famously documented by Clayton Christensen in The Innovator’s Dilemma.

So, what about mobile WiMAX? We asked Liat Ben-Menashe, Director of Strategic Marketing, Broadband Mobility, at Alvarion, a pioneer in this space with 200 commercial deployments worldwide now:

At Alvarion we passionately believe that mobile WiMAX is going to have a positive, global impact on operators and consumers alike. Not only does this technology fit in with historical patterns of adoption, but also the full range of technological benefits are available right now, and suitable spectrum is also widely available. We therefore anticipate an open mobile WiMAX ecosystem to grow rapidly. The question is: what applications mobile WiMAX will be uniquely suited for?

The answer, we believe, is that operators must adopt a range of access technologies and combine them intelligently to solve delivery problems to a wide range of devices. Increasingly intelligent bearer-aware software will adapt the user experience to the appropriate bearer technology. This fits with the Telco 2.0 team’s “data logistics” metaphor. In the world of physical logistics, delivery is made by combining road, rail, sea and air freight.

This process optimises a complex trade-off between cost, delivery time, and quantity delivered. Likewise in the world of digital logistics, telcos will need to combine multiple access technologies to support a wide range of consumer needs.

What’s the problem?

Customers are changing their communications habits. They are adopting a broader range of devices, and behaviours that were not forecast when 3G networks were developed. For example, over 90% of mobile data traffic can come from laptops.

Consumer electronics devices were historically developed to serve a single market need. Now we see a transition to integrated (‘converged’) devices, supporting multiple markets, and taking previously fixed experiences mobile.

Operators are being compelled to seek new service models, while at the same time minimize costs in upgrading their core networks to deliver these new mobile broadband services. Somehow there remains a belief that one 1990s wireless architecture and technology can support all of this. It can’t.

The emergence and rapid uptake of “always on” mobile broadband is propelled by new applications such as live video news, YouTube-like video sharing, and social media services. These mix a variety of traffic types, each requiring different priorities and air interface profiles. Some applications are very “chatty” presence-driven services, others are more like file transfers, and some are latency-sensitive voice and video streams.

Existing networks may be optimised for only one or two of these, and tend to be inefficient at managing all traffic types. Bringing up and tearing down the air interface to transfer just a few bytes can be very poor use of spectral capacity. The overall effect is unfavourable capacity utilisation and high cost structures. This is causing a capacity crunch in leading 3G markets, where data networks are largely optimised for short mobile phone web browsing sessions.

Operators now seek an effective, unified, technological solution capable of eliminating the capacity crunch caused by increased consumer 3G services demand. At the same time, adopting new technologies must address the issues of lowering CAPEX and OPEX. You’d hardly be surprised to learn that we think mobile WiMAX is the right tool for the job. Just as it costs five times as much to move a container by land as it does by sea, you need to pick the right mode of transport for the job of delivering complex mobile broadband services.

Why mobile WiMAX?

Mobile WiMAX has five specific advantages:

1. Mobile WiMAX is capable of providing higher, cost-effective bandwidth in comparison to existing wireless services. For operators, this translates into the ability to meet increasing consumer demand for broadband-on-the-go.
2. It’s built from the ground-up to support Internet Protocol. As a “layer 2” only network technology it retains the proven simplicity, cost-effectiveness and adoption of dominant fixed technolgies such as Ethernet.
3. It offers an open ecosystem, with easier integration with various 3rd party equipment and consumer electronics compared to the often heavily-encumbered licensing schemes for 3G technology.
4. It fits with existing backhaul structures and points-of-presence via a single wireless infrastructure.
5. It’s easier and cheaper to manage.

Proof that it works: Taiwan’s nation-wide WiMAX grid

There has been a recent successful deployment of a proof-of-concept network in Taiwan, which is a step towards creating a nation-wide WiMAX grid there. These real-world test scenarios, executed across two university campuses and a science park, produced excellent results, with trials running across eighteen sectors and stretching over 6 kilometers.

The full gamut of mobile WiMAX scenarios were implemented, including applications such as VoIP, video streaming, IPTV and document exchange during driving and walking. Clear handover reached up to 80 km/hour providing an enhanced user experience and paving the way for Taiwan to consider implementation of a national WiMAX network.

An equally important, but positive side-effect of the tests was that within a few days, tens of handset manufacturers connected themselves to the test network, creating a significant mobile WiMAX ecosystem. Demand for WiMAX is derived not only from the technology, but is driven from market players as well.

WiMAX and “The Net”

In many ways, Mobile WiMAX leverages a duplication of Internet business models. Operators must shift profitably from billable-event business models to more flexible revenue models based on sponsorships, advertising and many other different forms of services. By adopting an access technology more suited to the Facebook generation’s usage patterns, they can build this business on a firm foundation.

[Ed. - Liat and team from Alvarion will be exhibiting in the Innovators Zone at the Telco 2.0 Executive Brainstorm, 4-5 Nov, London]

Posted at 09:19 AM | Link to this article | 1 comment

Barbara Schmiedinger, Head of Residential Product Marketing at Telekom Austria, will be talking at the Telco 2.0 event on 4-5 Nov about how their quad play product offerings are using a sophisticated BSS platform from Infonova to help them in a very competitive market.

Infonova’s ‘order-to-cash’ platform has been specifically designed to support ‘Telco 2.0’ business models: whitelabeling, rich wholesale products, and innovative partner models. We particularly like the fact that the wholesale angle seems to have been baked in from the start, rather than bolted on as an afterthought.

At the same time, Infonova’s platform helps to optimise existing business models and allows flexible interchange between ‘legacy’ and ‘next gen’…all at remarkably low cost levels.

We asked Andrew Thomson, Director, Infonova Solutions to elaborate on the market opportunity for agile systems like this:

Indisputable facts

Most telcos’ front and back office systems are “hard wired” for the original business proposition and are unable to support new functionality without significant investment. For example, many operators have made significant investment to support additional functionality for complex enterprise customers or triple and quad play bundling.

Disappointingly, much of these additional investments which have often included efforts at systems consolidation, have not delivered the necessary results. And it is going to get worse, as the future will require telcos to orchestrate a wide range of propositions from many suppliers for their customers.

The majority of telco business cases to date have been based on the margin achievable by packaging and selling products and services. This is why most front and back office systems are designed to support traditional one-sided business relationships where services are sold either direct to the end customer or as wholesale to another operator for them to re-package and on-sell.

What has changed?

The problem is that multiple overlapping factors are dramatically impacting the traditional telco business model: deregulation, competition, margin erosion, network services commoditization and particularly IP convergence. It is becoming clear that survival will require that telcos operate both Telco 1.0 and Telco 2.0 business models simultaneously. So what does this mean for most telcos’ front & back office systems?

Most telcos have already commenced expensive programs to integrate and consolidate their front and back office systems. Most have also discovered that upgrading these systems to support Telco 1.0 triple and quad play services is very expensive and often results in significant complexity and higher cost of operations. When the consolidation is “complete” most telcos still need to use some smoke and mirrors and a lot of hard work to deliver and support the functionality desired.

Two-sided business models fundamentally call for a capability to manage a multi-layered business model. On the one side to aggregate multiple suppliers into wholesale and retail offers, where those offers for example include NextGen, legacy and other products and services including all types of devices.

On the other side, multiple retail operators and channels will brand those offers and bundle them with their own services. Each of these virtual operators may require different charging and revenue sharing models simultaneously. This needs a complete re-think as current front and back office systems design are designed to support single sided business models.

For example, new channels like supermarkets and equipment manufacturers (ie Apple) are also seeking order-to-cash propositions which they can brand as their own - but most operators do not have the front and back office systems to support this whitelabeling functionality. Simply put, most legacy systems only support a “one brand” functionality and cannot support multi-whitelabel branding scenarios.

The changing world described above is a challenge for 90% of the world’s telcos! With the lack of front and back office systems capabilities, telcos are not in a position to even trial these ideas. This is why IDC commented: “It’s likely that Telco 2.0 will be the engine to drive the industry’s growth over the next several years, but without the right BSS (front and back office systems) to support these initiatives, service providers may stall right out of the gate.”

So, given that Heads of Strategy and Marketing are increasingly expecting to pursue radical new Telco2.0 business models just as the Heads of Operations and the CFO are struggling with the complexity and the mounting costs of re-structuring IT systems to support of Telco 1.0 business models…is there a silver bullet solution that can provide the business capabilities and functionality to deliver both business models simultaneously?

Infonova’s Next Generation BSS is a technology neutral front and back office business platform that has been designed to support multi layer business models. It supports white-label order-to-cash operations at wholesale and retail levels simultaneously, providing highly automated real time order fulfilment for suppliers, customers, channels and end users. Both the wholesaler aggregator and the virtual operators get their own product management configuration, customer management, fulfilment, billing and collections capabilities.

From one perspective it provides the service layer to manage and aggregate application services (eg IP Telephony), next gen (Broadband), legacy (Mobile, PSTN) and products (eg devices such as handsets etc) as well as commoditized network services (eg wholesale traffic) from multiple parties. Its multi-layer functionality enables a telco to choose what services, products and pricing are made available to each retail operator. In turn the retailer can define what products and offers can be sold by a channel.

The platform partitioning enables each retailer to operate their own brand of product bundles at their own pricing - and of course they can also add in their own products into the mix (which for example would enable Apple to define, launch, and market their own branded products and services and bundle them with other products and services on the telco’s multi whitelabeling platform).

Infonova’s product management also enables the operators to individually define their own pricing and revenue / loyalty sharing definitions so that the user of a service can be a beneficiary from payments by another entity. It can also be used as a non-intrusive overlay to telco’s hardwired systems to deliver Telco 1.0 and Telco 2.0 business models simultaneously.

[Ed. - The Infonova team will be demonstrating their capabilities at the Telco 2.0 event]

Posted at 05:12 PM | Link to this article | Add a comment

HTK is a specialist supplier of ‘voice 2.0’ services. They’re one of the interesting group of companies who’ll be participating in the ‘Innovators Zone’ at the Telco 2.0 event. We’ll be presenting some of our new analysis on the (significant) market opportunity for telcos to provide services to enterprise contact centres on Day One of the event. In the meantime, we asked Marlon Bowser, HTK’s Managing Director, for his thoughts on this topic:

Chasing the Rainbow

The telecom industry is going through a time of arguably unprecedented change, with more opportunity for “service innovation” than ever before. With change comes the need to adapt and many Telecom Service Providers are opening up their networks to enable integration of third-party application services. The question is whether fostering such a culture and community of innovation is a business model that makes sense, and how it can be harnessed to generate significant financial growth.

Companies like BT and Microsoft are catalysing the market for innovation, with service delivery platform vendors waiting in the wings to prove that they’re the best bet to host the next big thing. The problem is that innovators and early adopters of new technology are often driven by an agenda of “cool” rather than one of “cash” - it may create excitement, but it rarely creates significant revenue growth.

Solving a Big Problem

One obvious area where network services could make a difference is in the management of communications between organisations and their customers. Most organisations have their own or outsourced Contact Centres to provide customer support; to answer questions and help people get where they want to go. The faster and more efficient the process and the better the emotional response the more successful that operation will be.

Empowering customers to make informed decisions about how they want to communicate with organisations is becoming a key factor for Contact Centres especially where customer retention and satisfaction are critical success factors. Providing customers with personalised services and the ability for customers to “self-serve” also requires an increase in the level of integration between business process applications and communication services.

To be successful these services need to be able to adapt to changing customer requirements. Constantly changing in-house service platforms can be disruptive and expensive, making network centric hosted services an attractive option.

Presence and availability information are two of the key features of next-generation telecom network architecture. If we couple both features with the increasing availability of rapid service innovation through access to third party applications we have the perfect environment for the development of intelligent, personalised self-service capabilities. Flexibility and cost could be the main drivers for growth in the adoption of network based services in the Contact Centre market. There is certainly plenty of scope for growth as shown in Fig 1.

Fig 1. Potential for provision of hosted services.

Taking this concept of intelligent routing a stage further there may also be an opportunity to extend into the consumer market providing intelligent routing services integrating telephone and data services. Thus providing the ability for individuals to manage the routing of incoming calls depending upon their relationship with the calling party.

Some calls they may want to receive regardless of their physical location so be routed to mobile or another landline. Other calls they may want to route to messaging services that provide intelligent features such as links to diaries for automatic appointment entry.

Whether it is organisation to individual communication or individual to individual communication, the potential exists for intelligent, decision based routing services to be a key enabler for new revenue growth in the telecom sector.

The Practicality of Going to Market

So how does a Tier-1 telecom service provider enter the market quickly, with a value-added service portfolio that will provide a significant uplift in both revenue and margin? Moreover, how can a Telco manage its own financial risk of investment in a service delivery platform and portfolio of next-generation applications that may be slow to take-off? What if there is no pot of gold at the end of the rainbow (or more likely, what if another service provider finds it first)?

One answer can be to work with a partner who will not only provide innovative new services, but who will take shared responsibility - on a financial risk and reward basis - for the operational infrastructure, hosting, management and market success of those network services. I.e. A vested interest. Out-sourcing has become increasingly popular for reasons of cost reduction, business agility and lean-operation, but in the context of application delivery it can also help to drive new sources of revenue. Combined, that can make it a highly effective and low-risk strategy.

It may come of no surprise to you to discover “that’s what we do” here at HTK. In fact many of the service features discussed earlier form part of our Virtual Contact Centre vision and portfolio for the Telco 2.0 marketplace.

[Ed. - do look out for Marlon and HTK at the Telco 2.0 event on 4-5 Nov, London].

Posted at 12:34 PM | Link to this article | Add a comment

As a preview to the Telco 2.0 event in a few week’s time and a follow up on our analysis of the credit crunch, we were delighted to take part in a panel on TelecomTV last week:

This is how they billed it: The troubles affecting the world’s financial markets is having a knock-on effect on just about every industrial and business sector on the planet. However, the good news is that telecoms is suffering much less now than it did when it experienced its own recession between 2000 and 2005. Today, mobile operators facing a potential slowdown in developed and saturated markets are able to move quickly to exploit growth opportunities in emerging economies whilst the big incumbent fixed line carriers suddenly find themselves back in the limelight and investor’s good books. Watch the panel to find out why the Telco market could just survive the current economic storm and act as the lubricant to the digital economy.

Posted at 06:29 PM | Link to this article | Add a comment

Just when I thought I was out, they drag me back in: Siemens shows a concept phone using the “big touchscreen” iPhone design meme to include a large solar panel in the device. Nice; but hasn’t Siemens given up making phones?

Ah, another week in the snakepit. No-one can get away from shiny gadgets. After last week’s collective orgasm over the first Android device (if you missed - it’s a bit like one of HTC’s big ugly Windows devices from two years ago), here’s the disappointment; Google may have taken powers to zap apps it doesn’t like. We’ll see how this develops, but it’s desperately ironic that Google of all companies would re-implement both Apple’s notorious iPhone NDA and Microsoft’s remote forced reboots.

Microsoft, eh? There’s concern about what will happen to their new ads’n’websites strategy in a recession; ad spending is famously an exaggerating indicator of the underlying economy. And even Google is facing a nasty antitrust problem., even if improved ad-buying products boosted their Q3 numbers. We told them but they wouldn’t listen; a company whose main product is called “Office” has no business being a consumer media player.

However, it looks like the long-predicted push e-mail bust is on; maybe a Microsoft/Salesforce or RIM tie-up could still be a goer.

Back down at Layer Zero, Handelsblatt reports that Deutsche Telekom is at long last coming around to the structurally separated future. The troubled monstercarrier has declared a willingness to deploy high-speed infrastructure - fibre in the access network - to “as many areas of Germany as possible”, and to cooperate with other networks in doing so, which implies sharing the wealth.

Apparently, talks have opened with Netcologne, Cologne’s munifibre project, about the terms on which the two parties could share the use and costs of a fibre network there. The next step will be an approach to the regulators. Speaking of whom; there’s a revision of US intercarrier termination coming. More detail at Telephony Online. Whilst we’re there, check out this AT&T provisioning horror story; for an industry whose business model historically been based on huge billing databases, we’re still not very good at it.