Telstra clears way for ADSL2 rollout

COMMUNICATIONS Minister Stephen Conroy has had a major victory, clearing the path for Telstra to roll-out ADSL2+ broadband services to an additional 900 exchanges across Australia.

In a joint announcement with Prime Minister Kevin Rudd, Senator Conroy said the roll-out would give an additional 2.4 million households access to next-generation high-speed broadband.

Telstra chief executive Sol Trujillo said the speed of the carrier's ADSL service would lift from 8Mbps to 20Mbps in 900 exchanges around Australia over the next eight months.

The Telstra announcement is great news for broadband in Australia. The company said it would proceed with the roll-out following assurances from Senator Conroy about the regulatory treatment of the initiative.

Telstra had previously baulked at rolling out ADSL2+ to exchanges because it said it did not have regulatory certainty about whether it would be forced to open up the investment to other carriers.

Until now, the company has only offered ADSL2+ at exchanges where other carriers had already installed their own ADSL2+ infrastructure.

The Telstra ADSL2+ investment means fast broadband with download speeds of up to 20 Mbps will now be available in more cities and towns throughout Australia.

“The Chairman of the ACCC, Mr Graeme Samuel, advised me that the ACCC has made a number of consistent public statements relating to the regulation of wholesale access to ADSL services,” Senator Conroy said.

“As a result of this advice, I concluded that there is a high degree of regulatory certainty in relation to the ACCC's approach to wholesale ADSL2+ services,” he said.

“I am delighted that I could provide this assurance to Telstra and that, as a result, a large number of Australian homes and businesses will have access to improved broadband services.”

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Broadcom targets open source VoIP

COMMUNICATIONS chip-maker Broadcom and open source developer Trolltech have entered a partnership that aims to create a multimedia VoIP development platform based on Linux.

The companies say they will create a platform for original equipment manufacturers wanting to produce next-generation multimedia VoIP products.

The partnership will combine Broadcom’s VoIP technology with Trolltech’s upcoming Qtopia software, which lets broadband devices offer a “feature-rich” graphical user experience with exceptional voice and video quality.

The companies said the VoIP platform gives OEMs integrated software that will allow for faster time-to-market for next generation IP phones.

Broadcom and Trolltech say the partnership will provide the technology platform that will ultimately support tens of millions of phone users.

“Our Qtopia software is the foundation for 10 million plus consumer electronic devices worldwide so this partnership with Broadcom will enable their customers to build customised next generation IP and mobile devices with robust voice, video, web and multimedia features,” Trolltech chief executive Haavard Nord said.

Qtopia is a software application platform and user interface for embedded Linux devices that has been optimised for Broadcom’s BCM1103 VoIP processors and its VideoCore II multimedia co-processor.

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Internet capacity problems by 2010: Study

CONSUMER and corporate internet usage demands could outstrip global network capacity by 2010 if billions are not invested now, a new report reveals.

The findings of the Nemertes Research study indicate that by 2010, the Internet’s capacity will not likely accommodate user demand and users could increasingly encounter internet “brownouts” or interruptions to the applications they’ve become accustomed to using. It may take more than one attempt to confirm an online purchase or it longer to download the latest video from YouTube.

“The immediate impact of the inadequate infrastructure will be to slow the pace of innovation, Nemertes warned. The next Amazon, Google or YouTube might not arise – not from a lack of user demand, but because of insufficient infrastructure preventing applications and companies from emerging,” the report said.

The investment required to bridge the gap between growing demand and capacity was between US$42 billion (A$48 billion) and US$55 billion for the US market alone. And this required investment is above and beyond the US$72 billion that service providers are already planning to invest.

The new study, from Nemertes Research, found the required investment globally was estimated at US$137 billion. The research, titled to “The Internet Singularity, Delayed: Why Limits in Internet Capacity Will Stifle Innovation on the Web” indicates that Internet access infrastructure, specifically in North America, will cease to be adequate for supporting demand within the next three to five years.

“This groundbreaking analysis identifies a critical issue facing the Internet – that we must take the necessary steps to build out network capacity or potentially face Internet gridlock that could wreak havoc on Internet services,” said Internet Innovation Alliance co-chairman Larry Irving.

“It’s important to note that even if we make the investment necessary between now and 2010, we still might not be prepared for the next killer application or new internet-dependent business like Google or YouTube,” Mr Irving said.

Nemertes Research president and senior founding partner Johna Till Johnson said: “This is the first study to independently model both Internet capacity and demand.”

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eBay cuts strike price for Skype deal

ONLINE auction site eBay has cut as much as A$1.36 billion off the potential A$4.9 billion it agreed to pay for VoIP phenomenon Skype when it acquired the company in 2005 because of under performance of the unit.

The write-down in the Skype sale prices came as the company restructured senior management at the VoIP unit, with Skype co-founder Niklas Zennstrom stepping down as CEO of the eBay Skype unit.

The management changes and cost write-downs are seen as an admission of the lackluster performance of the Skype acquisition.

eBay announced that it had paid about US$530 million (A$600 million) to settle all of its future obligations under the earn-out agreement signed with certain Skype shareholders when eBay acquired Skype in 2005.

The earn-out agreement provided for payments of up to approximately US$1,700 million (A$1,925 million) based upon specific active user, revenue and gross profit targets that were to be achieved in 2008 and the first half of 2009.

“eBay believes that the (A$600 million) payment is reasonable given the progress and anticipated rapid growth of Skype's active user base,” the company said in a statement.

Having stepped down as Skype CEO, Mr Zennstrom will become non-executive chairman of the Skype board of directors, while eBay chief strategy officer Michael van Swaaij will become Skype’s acting CEO until a permanent successor is found.

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Google phones a VoIP friend

GOOGLE has signalled its VoIP intentions loud and clear through the acquisition of innovative Californian internet phone provider GrandCentral Communications.

Announced via the Google blog on Tuesday, the acquisition is definitivequisition is definitive, with the service already now branded GrandCentral from Google Beta on its web site.

No price tag was attached to the announcement.

Google product manager Wesley Chan said in the blog posting said the company had been impressed with Grand Central’s technology, particularly that which lets users integrate all their existing phone numbers and voice mailboxes into a single account.

“We think GrandCentral's technology fits well into Google's efforts to provide services that enhance the collaborative exchange of information between our users,” Mr Chan wrote.

“GrandCentral is an innovative service that lets users integrate all of their existing phone numbers and voice mailboxes into one account, which can be accessed from the web.

“If you have multiple phone numbers (e.g., home, work, cell), you get one phone number that you can set to ring all, some, or none of your phones, based on who's calling. This way, your phone number is tied to you, and not your location or job

Grand Central is based in Fremont and was founded in late 2005 by Craig Walker and Vincent Paquet, who had previously run DialPad, an internet phone company acquired by Yahoo, also in 2005.

GrandCentral operations are being shifted to Google headquarters in Silicon Valley.

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Broadband land-grab slowing - report

THE broadband land-grab among internet service providers has slowed dramatically in the US, with the market’s “low-hanging fruit” already picked.

A report from the Pew Internet & American Life Project says 47 per cent of all adults in the US now have access to broadband internet in the home, compared to just 30 per cent in late 2005.

From mid 2005 to mid-2006, the broadband market grew by 40 per cent as middle-income earners and older age groups acquired home broadband connections.

But from mid-2006 to mid-2007, the growth rate was just 12 per cent. While middle-income and older age groups continued to show increases in home broadband usage rates, growth was much slower than in the past.

“The moderate growth in home high-speed adoption from 2006 to 2007 is partly a reflection of strong prior-year growth; the low-hanging fruit was picked in 2005,” said Pew Internet & American Life project associate director of research and author of the report, John Horrigan.

“Luring remaining hard-to-get adults to home broadband is likely to involve showing them the relevance of online content,” Mr Horrigan said.
The Pew Internet Project is a non-profit, non-partisan initiative of the Pew Research Center that produces reports exploring the impact of the internet on children, families, communities, the work place, schools, health care, and civic/political life.

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Deutsche Telekom buys into Jajah VoIP

THE dominant German phone company Deutsche Telekom has invested in web-phone start-up JaJah that develops technology that could ultimately cannibalise the telco giant’s own revenues.

Deutsche Telekom said its T-Online Venture Fund unit was an equity participant in a US$20 million investment in Jajah as part of a venture round co-led by Intel Capital.

The investment marks the first time a dominant telecommunications player with a POTS heritage has so readily backed a firm that is building disruptive services that dramatically undercut the company’s own services.

Jajah recently announced it has acquired more than two million users from 55 countries in their first year of business by providing next-generation calling solutions, as well as ultra-low cost phone connections to the most called places on earth.

Unlike traditional VoIP (voice over IP) solutions, Jajah uses regular phones and does not require software or special equipment. A user simply initiates the call from www.jajah.com and Jajah connects the call to either landline or mobile phones, for a fraction of traditional cost.

Additionally, users can make the same calls from many mobile phones and from web enabled smart phones.

“The agreement is unprecedented. Jajah is the first Voice 2.0 company to receive this level of industry validation and support. The long-term implications can’t be understated,” said Jajah co-founder Roman Scharf.

T-Online Venture Fund, already well known for service and technology innovation investments, is expecting attractive synergies for Deutsche Telekom business units by bringing Jajah web embedded solutions to consumer and business customers.

“Jajah brings together the best of the Internet with the best of telephony,” said Jajah chief executive Trevor Healy. “It is great to receive this validation from the telecommunications industry, whom we have always considered the key partner in bringing world-class solutions to consumers.”

“T-Online Venture Fund links us to Deutsche Telekom, one of the clear leaders in global communications and brings to JAJAH unprecedented strength, validation of our proposition, and confirmation of our leadership in voice communication solutions,” Mr Healy said.

Deutsche Telekom is best known in the US for its mobile arm, T-Mobile, and is one of the worldwide leading telecommunication companies with over Euros61 billion revenue (A$100 billion) in 2006.

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Vonage lives to fight another day, just

ONE of the most closely watched David and Goliath patent battles underway in the international voice of IP (VoIP) market – between Vonage and Verizon – has taken another turn.

VoIP service provider Vonage has been accused by telco giant Verizon Communications of patent infringement, and has been fighting for its survival after a court last month found against Vonage and ordered it to pay Verizon US$58 million (A$71.12 million) in damages.

The ruling also ordered Vonage to pay Verizon 5.5 per cent of all its future sales in payment for use of its patents.

A later ruling also barred Vonage from signing up new customers from April 12, putting the company’s very survival at risk.

But hours before the Easter Break, Vonage said it had secured a temporary stay from the US Court of Appeals in Washington DC.

“The stay enables Vonage to continue to sign up new customers until the appellate court can hear Vonage's request for a permanent stay,” the company said in a statement.

“The Court's ruling allows Vonage to continue to provide phone service to existing customers,” the company said.

However, Vonage is still in a fight for its life, in an action that sends a note of caution to the burgeoning value-added VoIP services market all over the world.

Verizon said there were no surprises in the court ruling for Vonage, saying it was just the logical procedural next-step in what is an on-going fight.

Vonage is one of the pioneering VoIP providers in the US, with more than 2.2 million subscriber lines. The company says its technology lets anyone make phone calls with a touch tone telephone from almost anywhere a broadband internet connection is available.

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Bundled services a must for ISP survival

INTERNET service providers risk dealing themselves out of business if they fail to broaden their relationship with small business customers to include a value bundles of managed services.

European research outfit Analysys says the total spend by small and medium sized enterprises – companies with 10 to 500 employees – was nearing its peak among developed economies.

In a study of economies in Western Europe found that after 2009, the number of new SME broadband customers would be small, with broadband penetration of businesses exceeding 90 per cent in most countries.

“Growth in demand for broadband managed services in the SME market is creating a new potential source of revenue for suppliers of broadband access services,” the Analysys report said.

“Billions of (dollars) in additional annual revenue are ready to be shared among suppliers that can provide SMEs with the right service packages to complement basic Internet access,” it said.

Analysys said that in the developed economies of Western Europe, demand for among SME’s broadband managed services would grow at a compound annual rate of more than 11 per cent – representing a huge opportunity for ISPs to extend their customer relationships.
Broadband providers are in a position to exploit this growth if they can find cost-effective ways to deliver a wide range of managed services, such as VoIP, managed IT services, hosted data and software as a service, the report said.
In the Australian market, local consultant Paul Budde from BuddeCom has long argued that ISP’s that want to survive should be looking to sell value-added services.

“It was (and is) my argument that access and basic services are commodity products that will always be under pressure, and very vulnerable to the whims of the network provider,” Mr Budde says in in his latest BuddeBlog newsletter.

“On several occasions Telstra has changed the rules, with the stroke of a pen, sending many telcos and ISPs to the wall as a result,” he said.

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Cisco takes aim at small business

AFTER years focused on almost exclusively on big business and big government sites, networking giant Cisco Systems has turned its attention to the fast growing small and medium sized business market.

At its annual channel conference in Las Vegas this week the company launched a suite of new products targeting SMBs, and revamped its channel program to allow for a new entry level certification for channel partners with a primary focus on small business.

At the heart of the launch is the Cisco Smart Business Communications System, a simple, complete and highly secure platform for enabling anytime anywhere access to information.

“Cisco's success is built on listening to customers and partners to capitalize on market transitions. Three years ago they asked us to transform our SMB strategy in order to better address their specialised needs,” Cisco chairman and chief executive John Chambers said.

“Today we are the network leader in the SMB market. As we continue to raise the bar in terms of our investments in and offerings to SMBs, we believe we are uniquely positioned to deliver the total communications experience they require,” he said.

The system employs new hardware products, integrated unified communications applications and system-management tools designed to complement each other and provide communication building blocks for small businesses, the company said.

The new products include the Cisco Unified Communications 500 Series, a platform that includes IP telephony software features for VoIP, internet conmnectivity with firewall protection, virtual private networks (VPNs) and wireless LAN access.

In addition to announcing it first new certification in more than 10 years, Cisco also unveiled its first market segment specialisation – SMB Specialisation. These program enhancements will help accelerate growth and foster differentiation in the channel, by providing the tools, training and incentives that meet the needs of today's SMB-focused partners.

The Cisco Smart Business Communications System will be available through worldwide channels in June 2007. The US list price for the system will start at US$699 (A$860) per seat, which includes the network with complete Cisco Unified Communications system capabilities and a Cisco Unified IP Phone.

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Skype links to Paypal to offer money tranfers

INTERNET telephone leader Skype will soon offer a money transfer service through the online payment service PayPal that lets users send money to other Skype users, cofounder Niklas Zennstrom said.

The Skype chief executive told a technology conference in Silicon Valley the company was working with PayPal on the design of the new service, which will effectively make Skype a competitor to companies like Western Union.

Many of the 171 million Skype users use the system to reduce costs in keeping contact with overseas friends and family, a group seen as strong potential users of international money transfer, Mr Zennstrom said.

The payment service, which is called Send Money, is expected to be formally unveiled in about a month. The tie-up makes sense – both Skype and PayPal are subsidiary units of online auction goliath eBay.

PayPal is already the most common way Skype users pay for premium services (like making calls to traditional phones).

Overseas observers are saying the money transfer service is likely to be one of a growing number of applications to be offered through Skype.

Third-party software developers are understood to have been encourage to look at Skype as a platform where voice is just one service. The company wants developers to build other services on top of the system, and has already announced a series of premium business services to be offered.

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Microsoft prepares VoIP beta for Office

MICROSOFT is preparing to dip a toe in the water of voice over IP telephony with the launch of beta VoIP server and client software based on the company’s dominant Office franchise.

The rest of the VoIP industry is now preparing for the waves that a Microsoft toe can cause.

Microsoft business division president Jeff Raikes said the company expects that within three years 100 million – twice the number of VoIP users in the world today – will have the ability to make phone calls from Office applications.

In three years, the cost to businesses of voice over IP solutions would be half of what it is today as VOIP systems moved from hardware to software, Mr Raikes said.

The company would later this month release beta versions of its Office Communications Server 2007 – Microsoft’s VoIP server – and Office Communicator 2007 client product for public testing, he said.

Millions of users are expected to become involved in the beta process.

“Software is set to transform business phone systems as profoundly as it has transformed virtually every other form of workplace communication,” he said.

“Over time, the software-based VoIP technology built into Microsoft Office Communications Server and Microsoft Office Communicator will offer so much value and cost savings that it will make the standard telephone look like that old typewriter that’s gathering dust in the stockroom.”

Microsoft says its VOIP server and client technology represents the most important new communications technology since Outlook – the company’s email client – was launch in 1997.

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VOIP to ‘rob’ telcos of $20 billion by 2011

NEW communications players like Skype and Google are set to ‘rob’ traditional carriers of US$18.2 billion (A$23.2 billion) in revenue by 2011, according to new research from UK-based Analysys.
Companies like Skype and Google were successfully fostering novel forms of communication among online communities and potentially posed a major threat to core communications revenue, the report said.

Skype and similar voice over IP services could account for 5.4 per cent of the global fixed line telephony market in 2011.

Though growth among these VoIP providers had been seen as incremental, they would increasingly substitute for traditional communications services, the “Opportunities for Non-traditional Players in Communications Markets” report said.

“Online communities and portals create a market for communications that occupy a middle ground between one-to-one and one-to-many interactions,” the report’s author Stephen Sale said in a statement.

“The success of many of these services calls into question established ideas of user behaviour and suggests alternative means of addressing the communications market,” he said.

“Non-traditional players can capitalise on their presence online and in end-user devices to make inroads into telecoms companies’ core revenues.”

The market for content aggregation of on-demand video by online retailers is likely to be about US$820 million by 2011.

It also found that online players would fend off competition from direct-to-consumer portals – and the mobile sector – to take more than 60 per cent of the music aggregation market worth US$4.3 billion by 2011.

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Feds relax VoIP customer service guarantee

THE Federal Communications department has released draft legislation that will remove most types of next-generation VoIP telephone services from the Customer Service Guarantee (CSG) regulatory regime.

The department is seeking public comment from the public and telecommunications companies on the proposed changes, which it says are designed to give maximum certainty to both the industry and to consumers.

The proposed legislative changes were drafted by the Communications after a 2005 report that recommended the CSG be limited to VOIP services supplied in fulfilment of the universal service obligation, or that were supplied as ‘primary services’ by a person who provides both the VOIP service and underlying carriage service.

The changes will be overseen by the Australian Communications and Media Authority (ACMA).

The department said it was not envisaged ACMA would be required to determine on a case-by-case basis which VoIP services were subject to the CSG and which were not. Rather, VoIP providers would interpret and apply the rules as they are relevant to their services and advise their customers accordingly in advance.

The aim of the changes is to provide certainty about how CSG rules apply to VOIP services. The main role the regulator will play is where customers enter a dispute with a VoIP provider about whether or not its service offering is exempt from the CSG.

With the increasing take-up of broadband services and improvements in VoIP technology, there has been increasing business and community interest in VoIP services.

Building on the Coalition’s 2004 election policy, Government undertook to review VoIP services within the existing regulatory framework, looking at issues related to VoIP in the broader context of emerging next generation networks.


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India set for ‘phone and fun’ growth

AS global giant Vodafone completed its stunning US$11.1 billion acquisition of India’s fourth largest mobile company, talk at 3GSM – the largest mobile conference in the world – turned to the subcontinent.

Vodafone’s purchase of a 67 per cent controlling stake in Hutchison Essar focused the Barcelona conference on the growth markets of emerging economies like India and China.

A recurring theme at 3GSM had been discussion about “the next billion” – that is, the next billion handsets that will be sold around the world. And it will be India and China that drive that growth.

For Vodafone, the Hutchison Essar deal gives the company headroom to grown, and reduces its reliance on the saturated mobile markets of Europe.

India’s 1.1 billion population currently boasts a mobile telephone penetration rate of just 13 per cent. But it is growing by more than six million subscribers every month, making it the fastest growing market in the world and the focus of the industry.

China’s mobile market is relatively mature with a mobile penetration of 40 per cent, while Europe’s is a replacement market only with 100 per cent penetration.

Hutchison Essar already has a customer base in India of 23 million. But Vodafone chief executive Arun Sarin expects that to grow to 100 million in three years.

That growth would give Vodafone 25 per cent of the total market, as the Indian government forecasts that there will be 500 million mobile phones in the country by 2010.

“The next billion” handsets would be offer very different services and would be sold much faster, the 3GSM conference was told.

Convergence continues to be a critical industry theme, with most expecting much close tie-ups between telecommunications companies and entertainment companies – the so-called phone and fun leaders.

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Cisco, Apple head to court over iPhone

NETWORKING giant Cisco Systems and Apple are taking their dispute over the ‘iPhone’ name into the eleventh hour with both companies agreeing to a deadline extension to later this week to avoid a court date.

Cisco lodged a trade mark infringement lawsuit with the US federal court in San Francisco last month to prevent Apple from using the iPhone name for its much-hyped music player/phone device.

Cisco’s Linksys division has been shipping a line of voice over IP (VoIP) devices branded iPhones since the early last year. The company has owned the iPhones since it acquired technology firm InfoGear in 2000, which had registered the name.

Apple has argued that it should be allowed to use the iPhone name because each company’s phone uses different networks and different technology – Apple’s is a cellular phone while Cisco’s is VoIP.

Cisco has previously said Apple could use the iPhone name, but had said it wanted both companies phones to be able to communicate with each other. It did not detail how the different technologies should communicate.

Cisco has now agreed to an Apple request to extend the deadline to respond to the lawsuit until February 21. Both companies say they aim to reach a “mutually beneficial” resolution outside of court.

Apple formally announced its iPhone product last month. It is due to ship in the US through the Cingular cell network in July with a staged roll-out across the globe scheduled over the next year and a half.

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